Parent PLUS Loans
Many over 50s who have student loan debt borrowed for their children through Parent PLUS. In addition to having worked in the public service, to be eligible for the PSLF, they must first consolidate their loans (it’s free and can be done on the federal student loans website) in a repayment plan in depending on income.
“You have to know the program and you have to know that you have to consolidate,” says Winston Berkman-Breen, assistant director of advocacy and policy advice at the Student Borrower Protection Center. “You must be in the right repayment plan, have the right type of loan, and be in eligible public service work.”
Before October, consolidating a loan would reset the clock on those 120 required repayments; for the time being, and until October, this will not be the case. (Even if the consolidated loan is declined for PSLF, switching to income-contingent repayments may reduce the monthly balance for low-income people.)
If all of this sounds like redundant paperwork, it pretty much is. That’s because Parent PLUS loan holders “are one of the most overlooked categories of borrowers,” says Whitney Barkley, senior policy adviser at the Center for Responsible Lending. “We don’t even think of them when we talk about things like income-contingent loan forgiveness and other ways other borrowers get help.”
Still not easy
So many changes to the rules only raised more questions for people like Merritt, who worked in human resources for local government in New York state but wasn’t sure whether or not he could apply for the PSLF as a retiree and whether the loans he took out for his son might qualify.
He can (until October), and they could – except he hasn’t yet made the 10 years of debt repayments he still has to cancel. Even if loanholders eligible for PSLF haven’t made 120 payments, Berkman-Breen advises, they should consolidate before the October deadline to get as much credit as possible.
Older Americans also increasingly have student loans, taken out to earn degrees later in life or for higher education. If they have or have had a career in public service, they too could be eligible for the PSLF – assuming they can navigate the bureaucratic minefield.
Patricia Bradley, now 64, still owes $35,000 of what she borrowed for her bachelor’s and master’s degrees. After working all her life for non-profit organizations, she applied for PSLF. But “every time I try, they tell me I’m not eligible”. She doesn’t know why; she thinks it might have to do with transferring her loan from one servicer to another. “I haven’t been able to get any answers,” says Bradley, who lives in Massachusetts and is the director of child care at a YMCA. “All I get is the bypass.”
A long-standing plan to buy a motorhome and travel around the country – she has already decided to call it the “Patti Wagon” – is on hold. As the rent goes up and she is unable to get rid of her relentless college debt, she says, “I’m petrified at the thought of retiring. It really stinks. I want to cry sometimes. I can get rid of the rent, I can get rid of the rest. The only thing left is that damn student loan.
Hours after sharing her frustration, Bradley returns home to find another letter from her loan officer telling her that documents were missing from her final application to qualify for the PSLF.
“It’s 10 pages. I’ll see if I can understand. She sighs. At this rate, she says, “they’re going to dig me up and take the gold out of my body to pay off my student loans when I die.”