Chef is finishing up culinary school; like many, he does have student loans. His loan totals are small and modest compare to others. He has $5500 total in student loans, which is just under half of the total cost of schooling. The other half was paid with scholarships, grants, and out of pocket by us.
This morning I was reading a news article about Federal Parent PLUS loans. The couple featured owes nearly $500,000 in loans. This happened because of deferments, forbearances, and high-interest rates. The couple has even filed for bankruptcy and lost their home. It's mind-boggling how quickly that can happen. -- however, even with bankruptcy they still owe on the parent plus loans. (Not all debt goes away with bankruptcy.)
Parent PLUS loans are slightly different than regular student loans. Mainly the loan is in the parent's name, credit really doesn't matter, nor the ability to pay it back. Basically, as long as you need it you get it. Where student loans are in the student name and generally there is a limit on what you can get. As I said Chef only got about 1/2 of the school tuition and fees covered with student loans the other half was covered by grants, scholarships, and us paying out of pocket. As I said yesterday he has 1 credit hour left and that hour will be paid out of pocket.
We are waiting to see what his loan repayment and monthly payments will be. We will not know until the end of summer, what is payments will be. A few months ago I said he landed a full-time job, but the job turned out to be part-time. Covid restrictions, slow business, and not being able to open up the new restaurant is the reason the job did not end up being full-time. As summer moves on and covid rule changes hopefully it will pick up. Hopefully, the loan payments will be small enough that he can easily pay them back on part-time work, but if not hubby and I are setting up ourselves to help him out some. For us, it's important to pay back the loans and all other debts.
Even though work is not as many hours as we would like for him, right now for this week we are happy that it's not. Our car broke down again -- and is in the shop. Thankfully, family, friends, and neighbors are lending us a hand.
Anyways -- my main thought here is I can't believe how easy it is for parents and students to get into debt that they can't even begin to pay back. It's mind blogging how it's just dished out with no regard if it can be paid back. Other loan types like mortgages and car loans, for example, your credit scores, other debt, etc are taken into consideration, but when it comes to parent plus/student loans it's considered "social norm" and thus they just hand it out to all with no consideration of anything.
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