The parents PLUS loan has been allowing parents to take out large amounts of money in loans in order to fund their child’s college education. The loan approves almost everyone unless they have a history of overdue payments for longer than 90 days or have filed for bankruptcy numerous times. It usually comes with an outrageous interest rate and becomes a lifetime of payments for parents. However, millennials are now starting to help their parents pay for the parents PLUS loan that they have taken out. Alex Lykos is a 23-year-old software engineer in Boston making above the average annual income for his career. He is doing well financially and has a student loan debt of $27,000 of his own that he is paying for without a problem. Lykos decided to take on the responsibility of paying his parents’ loans which they had taken out to pay for his education and the total comes out to $92,000 for Lykos to pay.
The reason why millennials such as Alex Lykos are taking on their parents’ loans is because the loan is technically theirs since it was used to fund their education. Parents usually have many responsibilities such as mortgage payments and bills so many students are starting to feel a sense of guilt that they put their parents in debt. Missing payments ruins credit, which is why students who have found jobs are putting their money into maintaining their parents’ credit instead of saving or investing in themselves. It hurts many young individuals to not have savings but the guilt of leaving their parents alone to pay a loan that wasn’t for them is far worse for some.
Many parents simply forget or refuse to pay back the parents PLUS loan. Some former students are seeking anonymity from the loan because they have no way to pay off the loans. Students that went to school but never finished, and are working at low paying jobs are unable to make ends meet for themselves, let alone help their parents. For some, anonymity can be granted if a parent goes on disability and other valid factors but it isn’t easy. The parents PLUS loan puts a lot of families in debt for half their lives with high-interest rates that make it almost impossible to cut down the large balance. Students are now trying to maintain a healthy relationship with their parents and help pay off their loan to better their credit because, in the end, they were the reason it was taken out in the first place.
