President Joe Biden’s new student loan forgiveness plan has raised more questions, including whether ParentPlus loans count.
Student loan borrowers everywhere were excited to hear that $10,000 to $20,000 dollars would be forgiven of their student loan debt.
Not only are students excited about it, but parents who had to take out loans are as well.
Parents are able to take out loans called Parent PLUS loans for their child’s education. These help their kids get more money to pay for a higher education.
In all, $104 billion dollars is owed by 3.7 million families, according to Marca. These families have a median debt of about $29,600 and will be able to cancel up to $20,000 of that debt should they qualify.
Parent PLUS loans and the student loan forgiveness plan
Parent PLUS loans are funded federally just like student loans from the federal government. These loans help parents help their kids pay for school. The PLUS stands for Parents Loans for Undergraduate Students.
Direct PLUS loans are unsubsidized, so they gain interest with a fixed interest rate currently at 7.54%. This is higher than student loan rates, which are 4.99%.
Many people think it’s just millennials and younger generations who will benefit from the student loan forgiveness, but parents will as well. Baby boomers who had to help put their kids through college have an average debt of $43,554. Gen X has an average debt of $41,910.