Parents with student debt want bypass | personal financing
“Everyone wants to do everything they can for their children; there is a natural tendency to give your children what they want,” says Nancy Goodman, founder and CEO of College Money Matters, a nonprofit organization that helps families make college decisions. They took the idea that a college degree is a golden ticket. While yes, historically this has certainly been true, it is not true for every child in every situation and in every discipline.”
Parents expect help from their children
When you compare interest rates and fees for student loans, it’s better for students to borrow federal college loans than for parents to incur additional debt, says Sandy Baum, nonresident senior fellow at the Urban Institute’s Education Policy and Data Center and emeritus professor of economics at Skidmore College in Saratoga. Springs, New York.
But experts say parents often see loans as the only way their children can afford college, and some parents expect their child to eventually take responsibility for the payments. According to the survey, 22% of PLUS borrowing parents said they believed their children would take over their loan payments, but they haven’t yet.
Legally, parents cannot hand over their debts to their children so easily. The only way to do this is by refinancing with a private lender and Transfer of ownership for their children, which some lenders allow. But if a child borrows the maximum amount available, Baum says, the idea that he’ll be able to pay off all that and more once he graduates “looks questionable.”