Parent PLUS loans come with significant drawbacks, primarily concerning their dischargeability and the inability to transfer the debt, making them a serious long-term commitment for parents.
Key Negatives of Parent PLUS Loans
The primary disadvantages associated with Parent PLUS loans include their limited discharge options and the fact that the debt cannot be transferred to the student. These features can pose considerable financial challenges for parents.
Here's a breakdown of the key negatives:
| Negative Aspect | Description |
|---|---|
| Difficulty with Discharge | Federal Parent PLUS loans are rarely discharged. This means that even in cases of significant financial hardship, such as unemployment, age-related illnesses, other debilitating injuries, or even bankruptcy, it is exceptionally difficult to have these loans forgiven or eliminated. Parents remain responsible for repayment under almost all circumstances. |
| Nontransferable Debt | A critical drawback is that parents cannot transfer the Parent PLUS loan to their student for repayment after the student completes their education. The legal obligation to repay remains solely with the parent who took out the loan. |
These characteristics mean that parents assume a substantial, long-term financial responsibility that is difficult to escape, regardless of changing life circumstances or the student's future financial success.
