Parent Plus Loan - anyway for it to count FOR us?

[firelily301]

Hi all. Short story, when my husband was in school his mom took out a Parent PLUS Loan to help pay for some of his tuition. I don't know the entire history but basically he was in the military and then more school... years later the loan pops up and his mom tells him he's paying for it.

 

We currently pay about $150/mo. for this loan that's about $15,000 total, in addition to his other student loans and mine. My question is this: is there ANY way for this loan to become "ours", in our names and our social security numbers? Currently I feel angry that we're paying for it, but his mom is getting the tax deduction and also having the timely payments reflected on her credit report. Something I'd love for us to have...

 

Thanks in advance.

Edited December 6, 2006 by firelily301

[grammers]

You could take out a loan or use a CC balance transfer to pay it off, then pay off your new loan - but if there are any tax benefits because it's a loan for education, you'd lose them.

 

And unless DH agreed to pay it when she took out the loan, I'd have a REAL problem paying it back for her. Of course, I've never been accused of being a nice person - if I did have to pay it back, I'd pay it one month behind. Won't hurt my credit, and might motivate her to pay it herself.

[firelily301]

You could take out a loan or use a CC balance transfer to pay it off, then pay off your new loan - but if there are any tax benefits because it's a loan for education, you'd lose them.

 

And unless DH agreed to pay it when she took out the loan, I'd have a REAL problem paying it back for her. Of course, I've never been accused of being a nice person - if I did have to pay it back, I'd pay it one month behind. Won't hurt my credit, and might motivate her to pay it herself.

 

I never thought about taking out a loan to pay it off, but the rates probably will be just as bad. I could not allow ourselves to put the balance on CC's, even if it's a lower rate.

 

I don't think DH really knew about it when she took it out. I've heard him say that he doesn't really remember her taking it out or even mentioning it to him, so that is VERY frustrating. She just "sprung" it on us one day, like "oh by the way, there is a loan I took out for you, it's going to come due in a few months."

 

The worst part, is that we can't consolidate it into his current student loans (which are a very large chunk but at a great interest rate). We pay, she gets the benefits. I have tempted to just tell her that she has to pay it or her credit will suffer... but she is struggling as it is. We've been paying it for awhile now so we're used to the payment, I guess.

[grammers]

Are you sure it was a loan for his education - have you seen the paperwork? If she just sprung it on him one day, and he doesn't remember needing her to borrow money so that he could go to school - is it really a loan for his education?

 

Not that I'm suspicious or anything.

[firelily301]

Are you sure it was a loan for his education - have you seen the paperwork? If she just sprung it on him one day, and he doesn't remember needing her to borrow money so that he could go to school - is it really a loan for his education?

 

Not that I'm suspicious or anything.

 

Trust me, this was my first question when he told me! I was very suspicious, but I really, highly doubt she would do that. I have seen the paperwork but I cannot remember (note to self to look again tonight)...

[firelily301]

This gets a bit more complicated. The loans were supposedly dispursed to the school back in '98-'99 but there is no paperwork for that. His mom took out muptiple loans for all 4 kids and they were lumped together. Eventually it was worked out as to how much was for which kid. DH's amount was then consolidated around '03, his mom started paying for him but then claimed economic hardship for deferral. In '05 the deferance came due and that's when he was "reminded" about the loan.

 

The original loan amt. is over $18,000 and we will end up paying over $24,000 over the life of the loan. The rate is just over 5% but almost HALF of our mo. pmts. right now are interest! I think because the loan still gained interest while in deferment??

 

Essentially there is no paperwork proving this money when to his school or to him, but I am hoping we can find it, get it, whatever necessary. I don't know what to do... we really want to buy a house and $150 extra a month into savings would help our situation soooo nicely.

[LynnInMN]

This gets a bit more complicated. The loans were supposedly dispursed to the school back in '98-'99 but there is no paperwork for that.

 

There is paperwork for it. Your mother can also access the information at http://www.nslc.org/ It will show dispursment dates.

 

 

His mom took out muptiple loans for all 4 kids and they were lumped together. Eventually it was worked out as to how much was for which kid. DH's amount was then consolidated around '03, his mom started paying for him but then claimed economic hardship for deferral. In '05 the deferance came due and that's when he was "reminded" about the loan.

 

The original loan amt. is over $18,000 and we will end up paying over $24,000 over the life of the loan. The rate is just over 5% but almost HALF of our mo. pmts. right now are interest! I think because the loan still gained interest while in deferment??

 

No way is the interest rate just over 5%. Plus Loans run a much higher interest rate than Staffords. You can look at the historical interest rates of Plus Loans at http://www.finaid.org/loans/historicalrates.phtml

Scroll to the bottom. Loans dispursed in 98-99 were almost at 9%. Also keep in mind, interest has been accruing on the account since the day it was dispursed. PLUS loan are not subsidized and there generally is no grace period.

 

Essentially there is no paperwork proving this money when to his school or to him, but I am hoping we can find it, get it, whatever necessary.

PLUS loan would have been sent directly to the school. Have you tried logging into his student account?

 

I don't know what to do... we really want to buy a house and $150 extra a month into savings would help our situation soooo nicely.

[LynnInMN]

I just re-read the entire thread. Technicially if your DH was paying attention to his cost of attendance and what financial aid he was receiving, he should have been aware of what aid was being taken out for him. Also I am pretty darn sure that his signature would have been on the notes, as the recipiant. Legally however, he has NO obligation to pay them. Back when he borrowed, online lending and MPN's were in its infancy. The University I worked for was a test site for the DOE and even we could not do PLUS notes on an MPN...they were all done manually. So the school would have copies of the notes as well!

[firelily301]

I just re-read the entire thread. Technicially if your DH was paying attention to his cost of attendance and what financial aid he was receiving, he should have been aware of what aid was being taken out for him. Also I am pretty darn sure that his signature would have been on the notes, as the recipiant. Legally however, he has NO obligation to pay them. Back when he borrowed, online lending and MPN's were in its infancy. The University I worked for was a test site for the DOE and even we could not do PLUS notes on an MPN...they were all done manually. So the school would have copies of the notes as well!

 

Lynn,

 

YES, the rate is at 5.125% now after consolidation. And I made a mistake, the loans were taken out around 1991 so much farther back. DH has been to many schools (about 5) over the last 15 years, with three degrees.

 

I understand that he is not obligated to pay this loan back, but he has agreed to and is doing so. I posted on this forum because I am trying to figure out if or how we can take advantage of the tax deduction. Also, if we are paying and paying on time it would be nice to have that reflect on his credit but I understand we can't transfer the loan.

 

I wish I could say DH has ALL the paperwork from his schooling but he doesn't have everything. I am not really disputing that this money was taken out, I am wondering if it's really all his (and not some of his siblings amounts since they were once combined). We will have to do some digging with the schools for records. What is very frustrating is that this loan seems to have been deferred for a LONG time (I may be mistaken but it seems like it was 10 years? Is that possible?) and so there is a lot of interest.

 

I really appreciate the comments.

Edited December 7, 2006 by firelily301

[grammers]

You really need to get paperwork - contact the school, etc. as Lynn suggested. I don't think Parent Plus loans are eligible for consolidation, so if they were consolidated, I'm wondering just what kind of loans they were.

[LynnInMN]

You really need to get paperwork - contact the school, etc. as Lynn suggested. I don't think Parent Plus loans are eligible for consolidation, so if they were consolidated, I'm wondering just what kind of loans they were.

 

PLUS loans are eligible for consoldiation, but the interest continues to accrue during deferment