Parents borrow to pick up where federal loans leave off Because federal loans are capped at $31,000 for undergraduate students, those relying wholly on loans or attending more expensive institutions may need additional loans to cover their costs. Parents have been increasingly picking up this debt, which could impact their own long-term financial goals. A 2021 NerdWallet survey found that 26% of parents who took out parent PLUS loans to help fund their child’s education would be “unable to retire as expected” because of the debt. One in five of parents with these loans regretted taking them out. New student (and parent) tip: It’s tempting to help your child pay their school bill even when you don’t have the cash to do it. But if it involves borrowing, think twice. Unless you’re assured your child will graduate and support you in retirement, taking out loans to cover their education could do more harm than good. Paying for college often involves cobbling together money from multiple sources, but parent loans should remain a last resort.
The article 2023 High School Grads Could Take on $37K in College Debt was published on NerdWallet on May 2, 2023.
ELIZABETH RENTER is a writer at NerdWallet.
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