Question for the Money Doctors
Question submitted on Nov 12, 2012.
QuestionI signed a PLUS loan for my third son, with the understanding that he would pay it back.He has not done so, and now I have 2 other children in college, while that son is in medical school. Because the interest is compounded daily, I am having difficulty paying it off. I went through bankruptcy 2 years ago and have no credit.I have no car payment, etc. only this large bill. Is there any way this loan can be renegotiated to have regular interest?
PLUS loans have a fixed interest rate that can be reduced in 2 ways for making timely payments: 1) sign up for ACH monthly debits and receive a .25% discount, and 2) many lenders will lower the rate up to 1% if payments have not been delinquent.
Parents can also change the payment plan from standard (a fixed payment amount for up to 10 years) to an extended payment plan which gives you up to 25 years to repay the debt.
Contact your loan servicer to find out more about discounts and alternate repayment options.
For additional information visit http://www.360financialliteracy.org/