Are Parent PLUS loans predatory?

Are Parent PLUS loans predatory?

Given the enormous collection powers of the federal government, the Parent PLUS loan is becoming predatory for Black PLUS borrowers who are more likely to be low-income and low-wealth, and who will likely struggle to repay.

What does Parent PLUS loan mean?

Parent Loan for Undergraduate Students
A PLUS loan, also known as a direct PLUS loan, is a federal loan for higher education available to the parents of undergraduate students, as well as to graduate or professional students. PLUS stands for Parent Loan for Undergraduate Students. The government itself is the lender, hence the name “direct” loans.

What is the average parent PLUS loan debt?

The average parent PLUS loan debt is $28,778. The average outstanding parent PLUS loan debt is $28,778, according to federal loan data. Parent PLUS loans are federal direct loans parents can use to pay for their dependent child’s education.

How many years do you have to pay off a parent PLUS loan?

You will be repaying the debt for 10-25 years regardless of the option you select. Choose a parent PLUS Loan repayment option that works for you and your family and stay the course. Parent PLUS loans do not have prepayment penalties, You can pay off the loans sooner than 10 years by making extra payments on the debt.

How to apply for federal direct parent PLUS loan?

Step 1: Complete the online Federal Direct Parent PLUS Loan Application. The US Department of Education will perform a credit check to determine your eligibility for the Federal Direct Parent PLUS loan. The credit decision will be displayed immediately after the application is completed.

What can a direct plus loan be used for?

Direct PLUS Loans are federal loans that graduate or professional students and parents of dependent undergraduate students can use to help pay for college or career school. PLUS loans can help pay for education expenses not covered by other financial aid.

Can a direct plus loan be transferred to a child?

No, a Direct PLUS Loan made to a parent cannot be transferred to the child. You, the parent borrower, are legally responsible for repaying the loan.

What can a Parent PLUS loan be used for?

The parent PLUS program allows parents to borrow money for dependent students to pay any costs not already covered by the student’s financial aid, such as Pell Grants, student loans, and paid…