- Reed Clark, 57, unexpectedly became the sole supplier of his five children.
- He took out parental PLUS loans to support his education, and now he owes the insider $ 550,000.
- I look forward to paying $ 3,000 a month for the rest of my life, ”he told Insight.
Reid Clark I didn’t expect it to be given to five children alone.
Clark was part of a two-income family and was preparing to pay for his five children ‘education, but he and his ex-wife were not allowed to attend. They divorced in 2011. A few years later, when the children started going to college, he decided to turn to him. Federal loans to support their education. (His ex-wife is not contributing because of personal circumstances.)
He now owes more than $ 550,000.
Clark, 57, told Insider: “I look forward to paying $ 3,000 a month for the rest of my life. He estimates that he will continue to make those payments for at least three more decades.
Parent PLUS Loans, a type of loan, is a federal loan that allows parents to pay for their children’s education. The child can cover the full cost of attendance by minimizing any financial support he or she has already received.
For Clark, his ability to obtain these loans did not have to be delayed, even though his financial situation changed dramatically. Now, he says, even though he earns a living on health care sales, his retirement could be severely hampered by his decision to take on debt for his children’s future.
“For those of us who want to see our children do better, we can help you improve yourself and you can improve your chances of success,” Clark said. And I do not take the opportunity to send my children to school, even though it is a huge financial burden. Not an option.
Clark says he wants only the best for his children, and parental loans allow them to give their best. However, he is “very concerned” about his own financial future and is responsible for high interest rates and loan practices that do not take into account the borrower’s income or income changes.
‘Teaching Your Children and Paying for It Is Really Challenging’
President Joe Biden has campaigned for $ 10,000 in debt for each borrower, and some Democrats are using executive action to persuade them to cancel $ 50,000 in federal student loans. But it is not clear whether PLUS parent loans are included in that apology, and helping parents with their debt is not yet part of the talk on Capitol Hill.
Parent PLUS loans are the most expensive type of federal loan: the current interest rate is 6.28% for the current 2021-22 school year, compared to 3.73% for undergraduate loans. To school.
New information released last week by the Texas Public Policy Foundation highlights the burden of student debt on parents, with one parent PLUS borrowing for every five student loan borrowers. The author of the report, Andrew Gillin, told Yahoo Finance that one of the problems with PLUS loans is that the amount parents receive is “dangerous thinking” because it depends on the cost of attendance rather than how much their parents can afford. “This leads to an unsecured loan.
Clark’s children did not go to the most expensive schools in the country. All three went to small schools in Clark, where she now lives, and the other two went to other state schools on the East Coast. But even for public universities, the number of courses has increased over the years.
Since 2001, the average national education rate has reached 211%. In addition to Clark’s loans, each child borrowed about $ 20,000 in loans because he wanted his children to have “special needs” in school.
He said the debt would fall on the shortcomings of the federal student aid system.
Clark’s parents point to the unprecedented amount of loans that can be borrowed years ago: “The whole process starts with the problems.” They make it really challenging to teach and pay for your children.
In February, when the federal government paused for student loans, Clarke planned to make monthly payments on the loans, but it could take decades to completely eliminate the debt, and he said he was “hopeless” at any time. in near.
I’m worried about my ability to repay the loan for the rest of my career, and in a few years when I retire I will be even more afraid, and I will move to a limited income, ”said Clarke. This is the part that worries me the most.