Parent PLUS loans are loans taken out through the Federal Student Loan Program to finance higher education. These loans differ from the majority of federal student loans in that they require a parent or legal guardian to co-sign for the student. By co-signing on a loan, the co-signer is agreeing to be legally responsible for repaying the debt in the event that the first party to the contract fails to perform. This means that when the graduates cannot repay their student loans, the debt collectors may go after their parent or grandparent co-signers. Many parents who co-signed on Federal Parent PLUS loans for their children are currently facing a harsh reality.
As more and more students apply for student loans and graduate each year as the economy continues to flounder, the job market is becoming oversaturated with highly educated job applicants. This tough competition makes finding a job upon graduation an uphill battle. Lots of graduates have been forced to accept positions they are overqualified for or positions where they are grossly underpaid. As a result, many graduates have found themselves moving back home with their parents because they cannot afford to support themselves and repay their student loans. When a borrower is unable to keep up with their student loan payments, their account may be declared in default. Once student loans are declared in default, the government may seize paychecks and tax returns as a method of collecting on the debt.
For parent co-signers, the dangers of default are severe. Not only are their children exposed to wage and tax garnishment, but so are the parents who co-signed on the Parent PLUS loans. Parent and grandparent co-signers face wage, tax and even Social Security garnishment if they cannot make the payments on behalf of the unemployed or underemployed children who utilized the loans. Student Loan Law Group may help these parents and their college-educated children.
Student Loan Law Group consists of licensed attorneys who have painstakingly studied laws relating to student loan debt. Student Loan Law Group protects borrowers’ rights by defending them in default and garnishment proceedings. Borrowers and co-signers of student loans who need help are encouraged to contact Student Loan Law Group today.