So my mother took out parent plus loans for all 5 of her children (myself included) with the expectation that we would be the ones to be making payments on the loans. That has led to a troubling situation through a couple of problems.
Problem 1: My eldest brother at some point went on Nelnet and initiated a loan consolidation. His mistake in this regard was including all existing loans in that consolidation. This led to 3 people having one huge loan that contains all their previous loans. Luckily none of my loans were included in this consolidation, but currently they are just making minimum payments and aren’t making any real progress
The loan is in my mother’s name only (can’t be easily transferred to any child) and minimum payments do almost nothing but offset the interest. I don’t know what the options are at this point but any advice on this matter would be appreciated.
Problem 2: My youngest brother (I'm number 4 of 5 for anyone asking) is currently in college and has 2 loans under my mother’s name. Both of these loans have sickening interest rates of roughly 9%. I am wondering on his behalf what the options are for trying to lower this interest rate without causing the loans to go into repayment because neither he nor my mother can afford to start making payments on these loans at this time, but the interest rates they’re currently sitting at are absurd and the one loan already has accumulated 4k in interest.
I’m honestly the only one in my family handling my loans in what I would call a responsible manner, and I’ve had conversations with everyone about trying to change their situations but nobody really knows what kind of options are out there for these two issues
Need advice for a wacked out parent plus loan situation
byu/Ecaf0n1 inStudentLoans
Posted by Ecaf0n1
2 Comments
A few questions.
1. Were all the loans consolidated are are there still some separate
2. Will she still be borrowing for children 4 and 5?
Federal student loan rates are set annually; they cannot be changed unless you refinance, but that makes them into private loans.
Any payments can just be divided proportionally based on the original amounts borrowed.
Yikes. For problem 1, I’m not sure if you can even separate them now. The only way to get them out of your mom’s name would be to refinance, and you should NOT make those federal loans private. Someone here can correct me but now that they are consolidated I believe that you can be put on an income driven repayment plan?
Problem 2, no. You would also be refinancing these in order to get a lower interest rate. When you refinance that immediately puts them into repayment.
Morbid (and again someone here can correct me) but it might be best to let these loans die with your mom eventually. Continue paying the minimum on them for her and let them go.