Ask Terry Questions Parent Plus Loan

Parent Plus Loan

By Terry Savage on January 29, 2020 | College Savings / Student Loans

I Have a $53,000.00 Parent Plus Loan at 6.85% for my son who graduated June 2019. I am thinking of refinancing my mortgage and adding this loan to it at a lower rate. Do you think this is a good idea? The government is terrible and doesn’t care about us. My husband and I are in our 50’s and we are saving for retirement and now we have this problem loan at a high rate. Please advise.

Terry Says

That’s exactly what I would do — refi the loan into the balance. Note: under new rules, the interest on the money taken out is not deductible since it is not used to improve the property. (I don’t know how they would ever figure that out!) Still, you should be able to pay less than 4% on your new mortgage. That’s a good tradeoff. ParentPlus loans are the WORST way to finance a college education, for sure!!

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