There is an excellent thread in the Parent's Forum about PLUS (Direct Loan for parents), http://talk.collegeconfidential.com/parents-forum/1498510-read-this-before-you-take-out-a-parent-plus-loan-p1.html, but this is another issue I want to bring up.
So mom and dad decide that they will take out PLUS to make up the gap,and in fact, mom can take out the loan as she doesn't have much on her credit record and dad has to run a business as the primary wage earner. Only one parent takes out PLUS. so in many cases, it makes sense to do this.
Problem is the marriage falls apart between the time the loan is taken and the loan is paid, and at nearly 8% interest, that's a staggering hit to take. Especially for someone who has not been working full time for years.
I bring this up, and use the mom/wife as the one shafted, since that has been my real life experience with this. Women who are working part time, or are SAHMs who take out the PLUS so that DH's credit record doesn't reflect it since he's the one on the line for business things, and then the marriage breaks up. When you take these loans totally in your name, baby, they are YOURS from what I can see in the financial settlements. And the payback can be a real killer.
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