The U.S. Makes It Easy for Parents to Get College Loans—Repaying Them Is Another Story

The federal Parent Plus loan program has millions of borrowers, many with subprime credit ratings; its default rate exceeds the rate for U.S. mortgages at the peak of the housing crisis

Rebecca McEvoy, a retired public-school teacher coping with multiple sclerosis, borrowed $84,000 through Parent Plus to help her oldest son through an art and design college.PHOTO: MADDIE MCGARVEY FOR THE WALL STREET JOURNAL

By Josh Mitchell
April 24, 2017 11:23 a.m. ET

Millions of U.S. parents have taken out loans from the government to help their children pay for college. Now a crushing bill is coming due.
Hundreds of thousands have tumbled into delinquency and default. In the process, many have delayed retirement, put off health expenses and lost portions of Social Security checks and tax refunds to their lender, the federal government.

Student loans made through parents come from an Education Department program called Parent Plus, which has loans outstanding to more than three million Americans. The problem is the government asks almost nothing about its borrowers’ incomes, existing debts, savings, credit scores or ability to repay. Then it extends loans that are nearly impossible to extinguish in bankruptcy if borrowers fall on hard times.

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