No Income? No Problem! How the Gov’t Is Saddling Parents with College Loans They Can’t Afford - ProPublica Donate lorax movie
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Almendral had been accepted to New York University in 1998, but even after adding up scholarships, grants, and the max she could take out in federal lorax movie student loans, the private university — among nation's costliest — still seemed out of reach. One program filled the gap: Aurora's mother, Gemma Nemenzo, lorax movie was eligible for a different federal loan meant to help parents lorax movie finance their children's college costs. lorax movie Despite her mother's modest income at the time — about $25,000 a year as a freelance writer, she estimates — the government quickly approved her for the loan. There was a simple credit check, but no check of income or whether Nemenzo, a single mom, could afford lorax movie to repay the loans.
Nemenzo lorax movie took out $17,000 in federal parent loans for the first two years her daughter attended NYU. But the burden soon became too much. With financial strains mounting, Almendral — who had promised to repay the loans herself lorax movie —withdrew after her sophomore year. She later finished her degree at the far less expensive Hunter College, part of the public City University of New York, and went on to earn a Fulbright scholarship.
Today, a dozen years on, Nemenzo's debt not only remains, it's also nearly doubled with fees and interest lorax movie to $33,000. Though Almendral is paying lorax movie on the loans herself, her mother continues to pay the price for loans she couldn't afford: Falling into delinquency on the loans had damaged her credit, making her ineligible to borrow more when it came time for Aurora's sister to go to college.
Nemenzo lorax movie is not alone. As the cost of college has spiraled ever upward and median family income has fallen, the loan program, called Parent Plus, has become indispensable for increasing lorax movie numbers of parents desperate to make their children's college plans work. Last year the government disbursed $10.6 billion in Parent Plus loans to just under a million families. Even adjusted for inflation, that's $6.3 billion more than it disbursed back in 2000, and to nearly twice as many borrowers.
A joint examination by ProPublica and The Chronicle of Higher Education has found that Plus loans can sometimes hurt the very families they are intended to help: The loans are both remarkably easy to get and nearly impossible to get out from under for families who've overreached. When a parent applies for a Plus loan, the government checks credit history, but it doesn't assess whether the borrower lorax movie has the ability to repay the loan. It doesn't check income. lorax movie It doesn't check employment status. lorax movie It doesn't check how much other debt — like a mortgage, or other student-loan debt — the borrower is already on the hook for.
"Right now, the government runs the program by the seat of its pants," says Mark Kantrowitz, publisher lorax movie of two authoritative financial-aid websites. "You do have some parents lorax movie who are borrowing $100,000 or more for their children's college education who are getting in completely over their heads. Those parents are going to default, and their lives are going to be ruined, because they were allowed to borrow far more than is rational." lorax movie
Much attention has been focused on students lorax movie burdened with loans throughout their lives. The recent growth in the Plus program highlights another way the societal burden of paying for college has shifted to families. It means some parents are now saddled with children's college debt even as they approach retirement.
Unlike other federal student loans, Plus loans don't have a set cap on borrowing. Parents can take out as much as they need to cover the gap between other financial aid and the full cost of attendance. lorax movie Colleges, eager to boost enrollment and help families find financing, often steer parents toward the loans, recommending that they take out thousands of dollars with no consideration to whether they can afford it.
When it comes to paying the money back, the government takes a hard line. Plus loans, like all student loans, are all-but-impossible lorax movie to discharge in bankruptcy. If a borrower is in default, the government lorax movie can seize tax refunds and garnish wages or Social Security. What is more, repayment options are actually more limited for Parent Plus borrowers compared lorax movie with other federal loans. Struggling borrowers lorax movie can put their loans in deferment or forbearance, but except under certain conditions Parent Plus loans aren't eligible for either of the two main income-based repayment programs to help borrowers with federal loans get more affordable monthly payments.
The U.S. Department of Education doesn't know how many parents have defaulted on the loans. It doesn't lorax movie analyze or publish default rates for the Plus program with the same detail that it does for other federal education loans. It doesn't calculate, for instance, what percentage of bo
What s this? Added to your activity feed:
Almendral had been accepted to New York University in 1998, but even after adding up scholarships, grants, and the max she could take out in federal lorax movie student loans, the private university — among nation's costliest — still seemed out of reach. One program filled the gap: Aurora's mother, Gemma Nemenzo, lorax movie was eligible for a different federal loan meant to help parents lorax movie finance their children's college costs. lorax movie Despite her mother's modest income at the time — about $25,000 a year as a freelance writer, she estimates — the government quickly approved her for the loan. There was a simple credit check, but no check of income or whether Nemenzo, a single mom, could afford lorax movie to repay the loans.
Nemenzo lorax movie took out $17,000 in federal parent loans for the first two years her daughter attended NYU. But the burden soon became too much. With financial strains mounting, Almendral — who had promised to repay the loans herself lorax movie —withdrew after her sophomore year. She later finished her degree at the far less expensive Hunter College, part of the public City University of New York, and went on to earn a Fulbright scholarship.
Today, a dozen years on, Nemenzo's debt not only remains, it's also nearly doubled with fees and interest lorax movie to $33,000. Though Almendral is paying lorax movie on the loans herself, her mother continues to pay the price for loans she couldn't afford: Falling into delinquency on the loans had damaged her credit, making her ineligible to borrow more when it came time for Aurora's sister to go to college.
Nemenzo lorax movie is not alone. As the cost of college has spiraled ever upward and median family income has fallen, the loan program, called Parent Plus, has become indispensable for increasing lorax movie numbers of parents desperate to make their children's college plans work. Last year the government disbursed $10.6 billion in Parent Plus loans to just under a million families. Even adjusted for inflation, that's $6.3 billion more than it disbursed back in 2000, and to nearly twice as many borrowers.
A joint examination by ProPublica and The Chronicle of Higher Education has found that Plus loans can sometimes hurt the very families they are intended to help: The loans are both remarkably easy to get and nearly impossible to get out from under for families who've overreached. When a parent applies for a Plus loan, the government checks credit history, but it doesn't assess whether the borrower lorax movie has the ability to repay the loan. It doesn't check income. lorax movie It doesn't check employment status. lorax movie It doesn't check how much other debt — like a mortgage, or other student-loan debt — the borrower is already on the hook for.
"Right now, the government runs the program by the seat of its pants," says Mark Kantrowitz, publisher lorax movie of two authoritative financial-aid websites. "You do have some parents lorax movie who are borrowing $100,000 or more for their children's college education who are getting in completely over their heads. Those parents are going to default, and their lives are going to be ruined, because they were allowed to borrow far more than is rational." lorax movie
Much attention has been focused on students lorax movie burdened with loans throughout their lives. The recent growth in the Plus program highlights another way the societal burden of paying for college has shifted to families. It means some parents are now saddled with children's college debt even as they approach retirement.
Unlike other federal student loans, Plus loans don't have a set cap on borrowing. Parents can take out as much as they need to cover the gap between other financial aid and the full cost of attendance. lorax movie Colleges, eager to boost enrollment and help families find financing, often steer parents toward the loans, recommending that they take out thousands of dollars with no consideration to whether they can afford it.
When it comes to paying the money back, the government takes a hard line. Plus loans, like all student loans, are all-but-impossible lorax movie to discharge in bankruptcy. If a borrower is in default, the government lorax movie can seize tax refunds and garnish wages or Social Security. What is more, repayment options are actually more limited for Parent Plus borrowers compared lorax movie with other federal loans. Struggling borrowers lorax movie can put their loans in deferment or forbearance, but except under certain conditions Parent Plus loans aren't eligible for either of the two main income-based repayment programs to help borrowers with federal loans get more affordable monthly payments.
The U.S. Department of Education doesn't know how many parents have defaulted on the loans. It doesn't lorax movie analyze or publish default rates for the Plus program with the same detail that it does for other federal education loans. It doesn't calculate, for instance, what percentage of bo
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