Ask Terry Questions Student and Parent Plus Loan debt

Student and Parent Plus Loan debt

By Terry Savage on February 19, 2019 | College Savings / Student Loans

In total, our 2 kids has $135K in student & parent plus loan debt with interest rates between 6.4%-7.9%. Noone qualifies for any reduced or write off programs. We have an excellent credit score (they do not). Should we try to consolidate these loans and refinance them thru a student loan refinancing company? Our kids will be making the payments.
Thank you for your help!

Terry Says

Since you are on the hook for the loans you co-signed or took out as a parent, I would definitely suggest trying to refinance those.  Beware of the new laws that say interest on a home equity loan is no longer deductible if used for paying down student loans.  Still, the lower rates may make that an attractive alternative.  BUT,  for the Federal student loans, your children should probably keep paying on them and not include them in a consolidation.  If you do, they won’t qualify for a deferment — or for one of the programs that apply for teachers and others in public service, as a result of paying their loans on time.  See my recent column on the subject.

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