Parent Plus/Student Loans

orangegoggles · July 2014

If your parents took out Parent Plus loans for your college tuition, do you make payments on them (in addition to your own student loans if you have them?).

I have no problem giving my parents money for my college loans that they needed to take out, especially as my parents are not in a good financial place. However, I recently found that payments I've made to them haven't been paid towards the loan (about 6,000) and the interest is outrageous as they haven't made any payments since I've graduated

It is a huge cluster f*ck and our relationship has really suffered. I could explain more but thought I'd keep it brief for now. I'm just curious if you only pay the ones in your name or if you help out your parents if they have any since it was your college loans.

orangegoggles · July 2014

diapersnwipes said:

My mom is terrible with money, but wanted to contribute to my college. She took out loans, I'm not even sure how much. When I got out of school she hit a bad spot financially so I took over the payments for about 1 year. When she got back on her feet she started paying again. She's struggling financially again right now, but hasn't asked me to take on the payments. I've offered and she said she can handle it (for now).

I'm sorry that it's a sore spot for you guys. Money issues can be extremely challenging.

Yes my parents are the same. The thing is that they are really optimistic about things and always truly believe their luck will change. They also don't like to talk about money and are really in denial about how bad their financials are. They have always been awful with money but as an adult I am shocked and saddened to realize how bad its gotten and all of the areas it encompasses.

They still will not apologize for the "missing" payments that I discovered and will not flat out say they used it for other things. When I press them for answers or pull up the statements online they get defensive (out of embarrassment I'm sure) and just keep saying, "well just take the 6,000 off what you owe". "I don't know why its not showing up".

I would love them to just be honest and have a conversation but whenever I do my mom ends up crying and pissed and my dad plays the innocent and clueless to the situation type.

I am currently making payments of over 500 for them (plus my own loan of 200) and they have others from my brother and sister. They don't make my brother pay it because "he can't afford it". Ughhh its so frustrating because besides this we have always had a great relationship. I have taken the log in information about make the payments instead of writing them a check like I used but I am so hurt and our relationship is a mess over it.

lexusolsen · July 2014

I'm sorry @orangegoggles‌. That sounds awful! ILs took out loans for dh and made interest payments while he was in school. He took at loans as well and also worked during school to pay what was left to avoid private loans. They told him that the loans they took out were their contributions and his payment every semester was his.

Then, after we were married and I was out of work (and dh was working two jobs to make ends meet) they decided they didn't want to pay them anymore and handed them to us....

We were lucky and it was only $180. I can't imagine if it had been $500! My parents couldn't afford to help but consigned on my private loans. I'm glad they were so upfront with me. I hope you can eventually repair your relationship.

orangegoggles · July 2014

lexusolsen said:

I'm sorry @orangegoggles‌. That sounds awful! ILs took out loans for dh and made interest payments while he was in school. He took at loans as well and also worked during school to pay what was left to avoid private loans. They told him that the loans they took out were their contributions and his payment every semester was his. Then, after we were married and I was out of work (and dh was working two jobs to make ends meet) they decided they didn't want to pay them anymore and handed them to us.... We were lucky and it was only $180. I can't imagine if it had been $500! My parents couldn't afford to help but consigned on my private loans. I'm glad they were so upfront with me. I hope you can eventually repair your relationship.

Thank you. I have payed a lot of my loans off by doubling the payments but still have about 10,000. I just don't know what to do, I don't want my parent's credit to be effected as I know they can't make the payment and I can, but they really are handling the whole thing badly. I really wish my parents just were upfront and had me take all the loans out in my own name. Theres no way I would have let them get this out of control. My DH is pissed obv because of how it was handled. Especially because I went part time for next school year and we just built a house! We will be ok but a part of me is so angry about the "missing" amounts I've already spent and how they take no blame for any of it.

MesmrEwe · July 2014

That is a HORRID position to be in OP!!!

This is one of those "life lessons learned the hard way" type things... Fool me once, shame on you, fool me twice, shame on me... When helping someone out, if the money is intended for someplace specific, write the check out to that place, not the person... I've had this happen too many times to friends where they've given cash/check to someone with the intended purpose of it being used some place specific, and that person has gone on a shopping spree - in one case it caused the house to go into foreclosure! The friend was in the midst of separating from his wife who had a TBI, the money was to bring bills back to current as his name was also on the accounts. She blew the $7000 on crap instead of paying the mortgage so she/the kids would have a roof over their heads! As much as it sucks, you gave money to your parents, if they chose not to spend it where it was meant, that's on them, not you, and while it's a lot of money, store it in the back of your mind that you don't lend/give them cash, but it's not worth it for you to hold on to the grudge. For the future, if you want to make a payment on that loan, you do so to the loan company and put the account number on the check that you send to them, and never give the money to your parents with the intent that they're going to send it where it's suppose to go... It's also a good rule of thumb that if you lend money out to people, never expect to ever see it again. It makes the expectations a lot easier to manage when they flake out...

orangegoggles · July 2014

MesmrEwe said:

That is a HORRID position to be in OP!!!
This is one of those "life lessons learned the hard way" type things... Fool me once, shame on you, fool me twice, shame on me... When helping someone out, if the money is intended for someplace specific, write the check out to that place, not the person... I've had this happen too many times to friends where they've given cash/check to someone with the intended purpose of it being used some place specific, and that person has gone on a shopping spree - in one case it caused the house to go into foreclosure! The friend was in the midst of separating from his wife who had a TBI, the money was to bring bills back to current as his name was also on the accounts. She blew the $7000 on crap instead of paying the mortgage so she/the kids would have a roof over their heads! As much as it sucks, you gave money to your parents, if they chose not to spend it where it was meant, that's on them, not you, and while it's a lot of money, store it in the back of your mind that you don't lend/give them cash, but it's not worth it for you to hold on to the grudge. For the future, if you want to make a payment on that loan, you do so to the loan company and put the account number on the check that you send to them, and never give the money to your parents with the intent that they're going to send it where it's suppose to go... It's also a good rule of thumb that if you lend money out to people, never expect to ever see it again. It makes the expectations a lot easier to manage when they flake out...

Wow that is awful for your friend

Yes, I definitely learned my lesson but I still can't believe my PARENTS took money from me like that....I know they must have been desperate but I would have helped them out or understood if they were just honest. I never expected to be paid back but I did expect it to go towards the loan so that the loan interest wasn't going through the room. Good advice, thanks!

orangegoggles · July 2014

cjcouple said:

orangegoggles said:

MesmrEwe said:

That is a HORRID position to be in OP!!!
This is one of those "life lessons learned the hard way" type things... Fool me once, shame on you, fool me twice, shame on me... When helping someone out, if the money is intended for someplace specific, write the check out to that place, not the person... I've had this happen too many times to friends where they've given cash/check to someone with the intended purpose of it being used some place specific, and that person has gone on a shopping spree - in one case it caused the house to go into foreclosure! The friend was in the midst of separating from his wife who had a TBI, the money was to bring bills back to current as his name was also on the accounts. She blew the $7000 on crap instead of paying the mortgage so she/the kids would have a roof over their heads! As much as it sucks, you gave money to your parents, if they chose not to spend it where it was meant, that's on them, not you, and while it's a lot of money, store it in the back of your mind that you don't lend/give them cash, but it's not worth it for you to hold on to the grudge. For the future, if you want to make a payment on that loan, you do so to the loan company and put the account number on the check that you send to them, and never give the money to your parents with the intent that they're going to send it where it's suppose to go... It's also a good rule of thumb that if you lend money out to people, never expect to ever see it again. It makes the expectations a lot easier to manage when they flake out...

Wow that is awful for your friend
Yes, I definitely learned my lesson but I still can't believe my PARENTS took money from me like that....I know they must have been desperate but I would have helped them out or understood if they were just honest. I never expected to be paid back but I did expect it to go towards the loan so that the loan interest wasn't going through the room. Good advice, thanks!

I agree with what @MesmrEwe said.
I also am not sure they just took your money, they most likely have sent to one of the other college loans or debt. I would not look at it that way. It is on them though, offer to help them find a financial adviser and just pay the remainder of what you owe (the balance after deducting 6k plus interest). and just make sure to tell them a couple months ahead that after X date, you are finished with your payments and they will have to find a way to resume paying on it effective XX/XX/XX.

Thanks, yes I assume they used it for bills. They didn't make any other payments on the other loans (they have all three of us under the same account and you can see the different loan types) My H and I discussed just paying the monthly payment and larger chunks a few time a year when we have extra money. That way I can wash my hands from it, though I doubt they will be able to make the payments after that (they still owe a bunch from my brother and sister). Luckily I let them know as they didn't know how much our parents took out and I'm hoping that the sooner they know the better off it will be as they can pay them down ASAP.

I also called my college and was able to see what was paid my Parent Plus loans each semester and the refund check they received each semester. Only 18,000 was paid actually towards my schooling but it looks like they took out/didn't return and addition 12,000. I am giving them the benefit of the doubt for the months I was off campus living in a house (maybe where some of the refund checks went to) but they never gave me "refund" check money any other semesters and I was always responsible to make my own spending money/books/etc.

orangegoggles · July 2014

diapersnwipes said:

I know they are in a bad spot but you know you don't have to pay the loans back. They are their loans. If you have the means, go for it but don't get yourself in a bad spot because you are paying their bills.

Yes, that is another reason why I am so angry. I feel as though they have the nerve to be short and dismissive with me when I'm helping them out (from a legal standpoint) They are in my father's name and cannot be changed into anyone else's name. I guess it is a way to protect the student from something happening like this in the future.

We won't be financially in a bad place though it definitely is a big chunk of change I'd like to be saving for my own child's future plans. I do feel like at the very least they should discuss their finances with me or be open to a financial advisor. I feel like they just have no plan and I know this is only the beginning of a lot of stuff to come.

Andrewsgal · July 2014

This royally sucks I am so sorry. I can only imagine how hurtful it would be for a parent to do this. I think I would back away and let them handle it for a few months.

notkateanymore · July 2014

I would personally let them deal with it, you've tried and they basically stole money from you. I'm really sorry.

smerka · July 2014

You didn't ask for this advice, but I really think you need to sit your parents down now and talk about their future. Approach it as the greatest gift you can give your kids is for them to not have to worry about their parents in retirement (not paying for kids college). Pay off the loan yourself if you can without hurting yourself financially. I know you are mad and hurt but try to see this as a wake up call to get your parents on track now

vlagrl29 · July 2014

I would also let them deal with paying it back since they were the ones that took on the loans in the first place. I graduated almost 10 years ago and have never heard of parents plus loans. That would be something my parents would never consider. They didn't even want to cosign for me, but I didn't need a cosigner anyways.

Is it even possible to take the loan from them and put it in your name? I mean if you really are set on paying it back. You would know it would go towards it anyways.

orangegoggles · July 2014

MrsMuq said:
orangegoggles - you aren't listed jointly on the loan are you?

No thank goodness. It is in my dad's name only and cannot be transferred so to protect students/children in case something like this happens. When he passes the loan is over.

orangegoggles · July 2014

smerka said:
You didn't ask for this advice, but I really think you need to sit your parents down now and talk about their future. Approach it as the greatest gift you can give your kids is for them to not have to worry about their parents in retirement (not paying for kids college). Pay off the loan yourself if you can without hurting yourself financially. I know you are mad and hurt but try to see this as a wake up call to get your parents on track now

Oh this is just the straw that broke the camels back. I've tried talking to them about the financials but they just get defensive and embarrassed. I offered to pay for someone to help them sort it all put and plan for the future but they actually got pissed at me.

orangegoggles · July 2014

vlagrl29 said:
I would also let them deal with paying it back since they were the ones that took on the loans in the first place. I graduated almost 10 years ago and have never heard of parents plus loans. That would be something my parents would never consider. They didn't even want to cosign for me, but I didn't need a cosigner anyways.

Is it even possible to take the loan from them and put it in your name? I mean if you really are set on paying it back. You would know it would go towards it anyways.

Parent plus are basically the worst thing to do because the interest is high. Most financial planners suggest focusing on your retirement and having the child take out loans (which I do have some) not sure why I don't have then all? Maybe there was a limit I could take out based on my parents salary? No they cannot be transferred into my name but I have been making the payments for my portion online now.

AprilLVE · July 2014

orangegoggles said:

I would also let them deal with paying it back since they were the ones that took on the loans in the first place. I graduated almost 10 years ago and have never heard of parents plus loans. That would be something my parents would never consider. They didn't even want to cosign for me, but I didn't need a cosigner anyways.

Is it even possible to take the loan from them and put it in your name? I mean if you really are set on paying it back. You would know it would go towards it anyways.
Parent plus are basically the worst thing to do because the interest is high. Most financial planners suggest focusing on your retirement and having the child take out loans (which I do have some) not sure why I don't have then all? Maybe there was a limit I could take out based on my parents salary? No they cannot be transferred into my name but I have been making the payments for my portion online now.

If you are going to continue paying on the loan, can you refinance in some way to get the interest down? Pull money from somewhere else? Not that you have to! As other's said, your parents are the only ones on the legal hook. But, I can understand from a moral and family perspective why you would want to pay them. I'm really sorry they did this to you. I hate hearing stories like this.

vlagrl29 · July 2014

orangegoggles said:

I would also let them deal with paying it back since they were the ones that took on the loans in the first place. I graduated almost 10 years ago and have never heard of parents plus loans. That would be something my parents would never consider. They didn't even want to cosign for me, but I didn't need a cosigner anyways.

Is it even possible to take the loan from them and put it in your name? I mean if you really are set on paying it back. You would know it would go towards it anyways.
Parent plus are basically the worst thing to do because the interest is high. Most financial planners suggest focusing on your retirement and having the child take out loans (which I do have some) not sure why I don't have then all? Maybe there was a limit I could take out based on my parents salary? No they cannot be transferred into my name but I have been making the payments for my portion online now.

That would suck. We are focusing on retirement as well and wouldn't take out a loan for my kid to go to school. You are such a good daughter for helping them repay it.

2-Step · July 2014

My parents did not expect me to pay off the parent plus loan, which was for the most of the tuition. I had my own loan of about $15k that I paid. DH thought his dad was going to pay off his parent loan, because he also had two of his own, but right when he graduated he handed it over to him (eventually us) to pay. We have since paid it off. DH was a little unhappy because his dad never mentioned that he would be responsible for it until they day he graduated and his dad has more than enough money to pay it off himself. I think they just didn't communicate about it, but it did cause a little tension since his dad helped both of his brothers with cash throughout college.

2-Step · July 2014

I would pay the amount of the original loan and keep it documented and then stop paying. If they don't apply the payments then that is their choice to default or deal with it in the future. Sorry you have to deal with this. I know people who are amazing human beings, but just a financial train wreck. It's almost like an addiction, you have to practice some tough love in that department, but you can try to keep it separate from your relationship and just set some strong financial boundaries. If they bring up money, tell them right away that you don't want to be involved and they need to keep it separate from your relationship. It would be different if they had just fallen on hard times and simply needed a loan or gift to get through,but they have shown they are being dishonest and taking advantage. They may eventually be driven to bankruptcy or to get help, but you giving them money is only going to prolong it. It's tempting to help them out, but I've seen it in my extended family, when someone has proven they aren't financially responsible, it's like handing drugs to an addict rather than encouraging they go to rehab.

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