Explore the Parent Direct Plus Loan Paradox
July 3, 2013 RSS Feed Print
Changes to standards for federal Direct Plus loans for parents mean they can’t take on as much debt for their children’s education.
Federal Direct Plus loans for parents are a paradox. On one hand, college tuition continues to rise far faster than the rate of inflation, and federal aid – from Pell Grants to work-study to capped undergraduate student loans – is failing to keep pace.
This makes parents' ability to take out Direct Plus loans that can cover up to the remaining cost of attendance a vital part of ensuring their children have access to a college education.
On the other hand, with the most expensive private colleges costing over $50,000 per year, that can be an awful lot of money for parents to borrow at 7.9 percent interest, the highest fixed rate for federal student loans. And it's especially burdensome