Patty Halajian is a seamstress in Lake Zurich, Ill. Mostly she sews costumes for local theater shows. She’s never been rich, but always made ends meet.

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.

But her daughter’s student loans couldn’t cover the cost. So Halajian borrowed $14,000.

“I mean you’ve nurtured them their whole life,” Halajian said. “They get to the goal line it’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.”

The loan Halajian took out is called a PLUS loan.  Nearly a million parents took out these loans last year. On average, they borrowed $12,000.

The loan is federally distributed, but has higher interest than a student loan: 7.9 percent. 

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’s easy to get in over your head.

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.

“I didn’t understand it all,” Halajian said. “I was adrift at sea.”

Jason Delisle is the director of the Federal Education Budget Project, a non-partisan organization that provides research on education spending.

“I call it predatory lending,” Delisle said. “You got someone in a vulnerable situation. They don’t want to say no. You just sign on the dotted line”

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.

“These are essentially sub prime loans,” Delisle said. “Only it’s not the government that’s being predatory, it’s the institution of higher learning.”

AARP recently examined data on people between age 50 and 65. They don’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.

That education debt is nearly impossible to erase through bankruptcy, and can be garnished from social security payments. PLUS loans can’t be turned over to the student, making a parent responsible until it’s paid off.

That’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.

“I am just going to sew until I can’t sew anymore,” she said.

She never expects to retire, but Halijian doesn’t regret taking out the loan.

“I’d do it again,” she said. “If she needed college I would have walked through fire for her.”

Explore PLUS loans in Illinois
(Data via Chronicle for Higher Education)