And even though the federal government inserted itself into most student loans back in the late 2000s and early 2010s, there are still a number of different programs around with different payment schedules, forgiveness requirements, and eligibility options.
One such option is the Parent PLUS loan, where the parent borrows the money for the student to attend school.But as the White Coat Investor shares, Parent PLUS loans incentive behavior that some might consider questionable.
"My parents graciously took out Parent PLUS loans for my undergraduate education, in my mom’s name. I currently have about $150,000 in Parent PLUS loans..."
"...My parents are currently paying by “income contingent repayment,” making payments of about $300 a month, covering nowhere near the interest. With my mom retiring in the next couple of years, her income will decrease and the payments should decrease as well..."
"...Is there any reason to pay off these loans quickly? The loans are discharged with death (parents will be over 90 years old after 25 years of payment) and the forgiven amount is not taxed and not taken out of my mom’s estate. This seems almost too good to be true, do you have any experience with this?"