WBEZ | parent plus loans http://www.wbez.org/tags/parent-plus-loans Latest from WBEZ Chicago Public Radio en Parents put off retirement to pay for kids' college http://www.wbez.org/news/parents-put-retirement-pay-kids-college-106079 <img typeof="foaf:Image" src="http://llnw.wbez.org//main-images/Patty.JPG" alt="" /><p><p>Patty Halajian is a seamstress in Lake Zurich, Ill. Mostly she sews costumes for local theater shows. She&rsquo;s never been rich, but always made ends meet.</p><p>Halajian has two daughters. Her husband died of a heart attack right before their oldest daughter graduated high school. When it came time to pick a college, her daughter was still mourning. So when she got in to Butler university, everyone was relieved to have some good news.</p><p>But her daughter&#39;s student loans couldn&rsquo;t cover the cost. So Halajian borrowed $14,000.</p><p>&ldquo;I mean you&rsquo;ve nurtured them their whole life,&quot; Halajian said. &quot;They get to the goal line it&rsquo;s finally they are going to graduate from H.S. and go to a great college. And you know if you do this for them they are going to have a great life. You do it. You just do it.&rdquo;</p><p>The loan Halajian took out is called a <a href="http://www.parentplusloan.com/">PLUS loan</a>.&nbsp; Nearly a million parents took out these loans last year. On average, they borrowed $12,000.</p><p>The loan is federally distributed, but has higher interest than a student loan: 7.9 percent.&nbsp;</p><p>Parents can borrow an enormous amount of money--up to the full amount of tuition--with no regard to for income or other debts. So it&rsquo;s easy to get in over your head.</p><p>Often these decisions are the last hoop to jump through to get to college. The decision is fast. And often no one is there to explain the consequences.</p><p>&ldquo;I didn&rsquo;t understand it all,&quot; Halajian said. &quot;I was adrift at sea.&rdquo;</p><p>Jason Delisle is the director of the Federal Education Budget Project, a non-partisan organization that provides research on education spending.</p><p>&ldquo;I call it predatory lending,&quot; Delisle said. &quot;You got someone in a vulnerable situation. They don&rsquo;t want to say no. You just sign on the dotted line&quot;</p><p>PLUS loans were put in place to help poor and working class kids go to college. Student aid advocates have pushed for a long time to make loans simpler and easier to get. But now advocates say these PLUS loans may be hurting the people they intended to help.</p><p>&ldquo;These are essentially sub prime loans,&quot; Delisle said. &quot;Only it&rsquo;s not the government that&rsquo;s being predatory, it&rsquo;s the institution of higher learning.&quot;</p><p>AARP recently examined data on people between age 50 and 65. They don&rsquo;t know exactly how many of them had PLUS loans, but one in 10 still had some sort of education debt. The average amount was just over $28,000.</p><p>That education debt is nearly impossible to erase through bankruptcy, and can be garnished from social security payments. PLUS loans can&#39;t be turned over to the student, making a parent responsible until it&#39;s paid off.</p><p>That&rsquo;s forcing some parents like Halijian to put off retirement. She is 60 and still working as a seamstress. She owes $8,000 dollars on a PLUS loan and will likely still be making payments into her 70s or 80s.</p><p>&ldquo;I am just going to sew until I can&rsquo;t sew anymore,&rdquo; she said.</p><p>She never expects to retire, but Halijian doesn&rsquo;t regret taking out the loan.</p><p>&ldquo;I&rsquo;d do it again,&quot; she said. &quot;If she needed college I would have walked through fire for her.&rdquo;</p><p><strong>Explore PLUS loans in Illinois</strong><br />(Data via <a href="http://chronicle.com/article/The-Parent-Plus-Trap/134844">Chronicle for Higher Education</a>)</p><script type="text/javascript" src="http://public.tableausoftware.com/javascripts/api/viz_v1.js"></script><div class="tableauPlaceholder" style="width:654px; height:489px;"><span id="cke_bm_406E" style="display: none;">&nbsp;</span><span id="cke_bm_405E" style="display: none;">&nbsp;</span><span id="cke_bm_404E" style="display: none;">&nbsp;</span><noscript><a href="#"><img alt="Dashboard 1 " src="http:&#47;&#47;public.tableausoftware.com&#47;static&#47;images&#47;Pa&#47;ParenteducationdebtIllinois&#47;Dashboard1&#47;1_rss.png" style="border: none" /></a></noscript><object class="tableauViz" height="489" style="display:none;" width="620"><param name="host_url" value="http%3A%2F%2Fpublic.tableausoftware.com%2F" /><param name="site_root" value="" /><param name="name" value="ParenteducationdebtIllinois/Dashboard1" /><param name="tabs" value="no" /><param name="toolbar" value="yes" /><param name="static_image" value="http://public.tableausoftware.com/static/images/Pa/ParenteducationdebtIllinois/Dashboard1/1.png" /><param name="animate_transition" value="yes" /><param name="display_static_image" value="yes" /><param name="display_spinner" value="yes" /><param name="display_overlay" value="yes" /><param name="display_count" value="yes" /></object></div><div style="width:620px;height:22px;padding:0px 10px 0px 0px;color:black;font:normal 8pt verdana,helvetica,arial,sans-serif;"><div style="float:right; padding-right:8px;"><a href="http://www.tableausoftware.com/public?ref=http://public.tableausoftware.com/views/ParenteducationdebtIllinois/Dashboard1" target="_blank">Powered by Tableau</a></div></div><p>&nbsp;</p></p> Wed, 13 Mar 2013 15:51:00 -0500 http://www.wbez.org/news/parents-put-retirement-pay-kids-college-106079