Consolidating parent plus loans to student

Direct consolidation loans are now the only type of federal student consolidation loan.

Under the Direct Loan Consolidation Program, you can consolidate Subsidized and Unsubsidized Stafford Loans, Supplemental Loans for Students (SLSs), Federally Insured Student Loans (FISLs), PLUS Loans, Direct Loans, Perkins Loans, Health Education Assistance Loans (HEALs), and just about any other type of federal student loan.

consolidating parent plus loans to student-52

Consolidating parent plus loans to student who is eric snow dating

But the Direct Consolidation Loan isn’t limited to PLUS loans.

You may also consolidate the following types of loans: The Direct Consolidation Loan rate is fixed by the government based on the interest rates of your existing loans.

Parents’ potential earnings are, of course, unchanged by the loan. Parent PLUS loan paradox #2 is a bit more troubling because it invokes predatory lending.

The decades-old Parent PLUS program allows parents to borrow federal student loans on behalf of their children in amounts up to whatever a school charges, including living expenses. With a fixed interest rate of about 7 percent and 4.3 percent origination fees, the loans are hardly a good deal—unless, of course, a parent has no other options.

In loan consolidation, your existing student loans are paid off and replaced by a new, large loan combining all those amounts.

You only have to track one monthly payment, and that payment may be lower if your repayment term is lengthened (the maximum in the Direct Consolidation Loan, discussed below, is 30 years).But those without other options are probably those least able to repay a PLUS loan.And because the program makes loans without regard to parents’ incomes, debt-to-income ratios, or assets, parents without other options are fully eligible for these high-cost, unlimited-balance loans.As you weigh the pros and cons, keep in mind that timing is critical.With just a few exceptions, you get only one chance to consolidate with the government loan programs.We look at data other lenders don’t, like savings, education, and earning potential.

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