The college debt crisis isn’t just confined to students. Even parents are drowning in debt, having taken out expensive loans to put their kids through college.
One big difference is that students often trade those loans and that debt for the prospect of one day landing a better job with higher wages. The hope is that their education is an investment in the future.
For parents, there’s no such investment. Yes, they’re investing in their children’s future, but they’re going to keep earning the same amount. Some are retired and living on a fixed income. If they’re on the hook for those loans — as they are with Parent PLUS loans — they have to try to make ends meet somehow.
For example, one couple took out about $127,500 to send their two sons to college. Retired already, they had to get second jobs to pay off the loans at a cost of $1,100 monthly. They say they have been forced into a very simple lifestyle so that every spare cent can go to that debt.
After all, when this type of debt isn’t paid, assets can be seized. Since student loans don’t actually pay for anything with a specific monetary value — like a car loan does — these seizures typically involve wage garnishments or denial of federal income tax refunds, which are taken and applied to the debt. In some cases, even Social Security benefits, which the parents have been paying into all their lives, can be withheld.
It’s becoming a crisis for parents and students, and it’s important for them to know what to do when debt becomes too much and leads to garnishments and other complications.
Source: Des Moines Register, “Rising college costs pull more parents into debt,” Kathy A. Bolten, Feb. 11, 2018
