“The PLUS Loan Problem”


PLUS loans are a BIG problem for families.

At first, they appear to be the right thing to do. They're readily available. They're easy to get. And the payments are manageable... at first.

But then years 2, 3, or 4 roll around.

And that's when it becomes obvious that the payments are spiraling out of control.

This US News article nails this point...

"But parents need to think about a borrowing decision like this through to graduation and beyond, before signing off on that first loan. A $20,000 loan for freshman year may sound manageable, but multiply that by the number of years you expect your student to be in school and the number of college bound children in the household and suddenly you owe $160,000 in Parent Direct PLUS loans, assuming you only have two children.

That works out to be about a $1,800 monthly payment under a standard 10-year plan. Parent PLUS loans aren't eligible for most income-based repayment  options."

$1,800 per month in payments would crush most families. Not to mention it would seriously impede their ability to save for retirement as well. And yet, so many families end up with this problem.

This is where our SET for Life Solution™ comes in. And why our advice and service is so valuable. We help families avoid this parent PLUS loan land mine.

Full article here: U.S. News & World Report, Education

And detailed information on parent PLUS loans here: PLUS Loans / Federal Student Aid

P.S. I didn't even get to what might be the worst part, the "loan fee" for every dollar of PLUS loan's a family takes out.

I've highlighted below the current interest rate (6.84%) and the "loan disbursement fee" (4.272%), which is alarmingly high...

PLUS Loan

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