Student loan debt is such a major problem in our country. Currently, 44 million Americans owe over $1.53 trillion worth of debt. But, it’s not just the students who are struggling under the massive weight. Parents are also burdened after making the decision to help their kids pay for college. It seems like a worthwhile investment until it’s not.
According to the Brookings Institute, 3.4 million parents have taken out what’s called a “Parent PLUS” loan. These loans are designed for parents to help their kids by taking on the cost of college themselves. So far, parents owe $90 billion in student loan debt. It’s hurting parents as much as it would’ve hurt their kids.
The difference is, most parents believed themselves to be in good financial standing beforehand. The current average balance for parents who took out a PLUS loan is $26,000. That’s up from $16,000 in 2014 and $5,200 in 1990. Make no mistake about it, student loan debt is hurting many people and continues to get worse.
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Parental Student Loan Debt
Haydee Cruz is one of those millions of parents who decided to help their child pay for their college education. Cruz claims that when she and her daughter toured Full Sail University in Florida, they fell in love. The decision to pay for college was an easy one. Of course, making $50,000 a year, they didn’t have $160,000 laying around.
So, they got a loan to pay for four years of tuition as well as living expenses. For years came and went and now Cruz finds herself in the middle of a battle. Her student loan debt bill costs her $600 a month. That price barely covers the interest. According to Cruz, thanks to interest and fees, the debt has ballooned to over $200,000.
This is where it gets even tougher. Cruz believes that she will be 85 by the time the debt is paid off. The student loan debt won’t allow her the ability to save for college. Every extra bit she gets goes right into the loan to keep it active. At 63, Cruz will most likely spend the rest of her life paying back this student loan debt.
“I have nothing that is going to sustain me if I stop working,” Cruz said. “This loan governs my life.”
College Tuition Continues Rising
It might seem like as simple solution for parents not to intervene. Of course, a parent wants to ensure their child is set up for a great life. They’ll do anything to help, even at their own expense. But as the cost of a college education gets increasingly expensive, parents have no choice.
There are limits to the amount of money a student is allowed to borrow. Because they are hitting that limit more often, parents are stepping up to fill the void. It’s hurting them financially. It’s strapping them for a decade or longer. Five years into repayment of student loan debt, only a third of it is complete.
“We shouldn’t force parents to make a choice between sending their kids to college and taking out a loan they can’t afford,” he said.
