As Parents Struggle to Repay College Loans for Their Children, Taxpayers Also Stand to Lose

[marmar]

This piece originally ran on ProPublica.

Parents are increasingly struggling to repay federal loans they’ve taken out to help cover their children’s college costs, according to newly released federal data.

The Parent Plus program allows parents to take out essentially uncapped amounts to cover college costs, regardless of the borrower’s income or ability to repay the loan. As the cost of college has risen, the program has become an increasingly critical workaround for families that max out on federal student loans and can’t pay the rest out of pocket.

Education Department officials have long said that they simply don’t have figures on how many of the loans were in default. But the agency has finally run some numbers. The data shows that default rates, while still modest, have nearly tripled over the last four years. About five percent of loans originated in fiscal year 2010 were in default three years later. The default rate at for-profit colleges is much higher, at 13 percent.

Overall, there is about $62 billion in outstanding debt from Parent Plus, according to the new data. The average Parent Plus loan borrower owes about $20,300. The Education Department compiled the numbers at the request of a government committee that is working on new rules for the program. ..........................(more)

The complete piece is at: http://www.truthdig.com/report/item/parents_struggle_repay_college_loans_for_children_taxpayers_lose_20140408

[liberal N proud]

1. It keeps parents from putting that money into other parts of the economy

Last edited Tue Apr 8, 2014, 08:29 AM - Edit history (1)

Things like home improvement or sometimes even repairs.
Parents are not able to buy new cars, take vacations or other things they might do with disposable income if the students loans were not weighing heavy.

Parents do this so the student can get a start in life.

[xchrom]

2. du rec.

[BeyondGeography]

3. College is the biggest ripoff in America

And it's not even close.