My Parent PLUS Loans Will Take Most of My Retirement

03/19/2014 10:37 am ET Updated May 19, 2014

Dear Steve,

I have a ton of Parent Plus Loans to repay.

I am 62 years-old, still working but will be looking at retiring fairly soon.

My loan payments will be approximately $1,000 a month which will be more than half of my social security income.

Is there not any help for parents who "had" to take parent plus loans due to their income status which kept their student from getting more student loans? This is already creating a great deal of anxiety and depression for me.


Don't miss my free my weekday email newsletter with the latest tips and advice on how to beat debt and do better financially. Subscribe now. - Click Here

Dear B.J.,

Let's not allow the perceived hopelessness of your situation fester and lead to more debilitating anxiety and deep depression. There are some good options here.

Since you are retiring "fairly soon" I would suggest you consider waiting till you retire, when your income will be lower, and then consolidate your Parent PLUS loans into a Direct Loan which would then be eligible for the lowest payment in the Income Contingent Repayment (ICR) program.

If "fairly soon" is more than a year from now then you should consider consolidating them now and enrolling them in the ICR payment. You need to re-certify your income each year and a lower income in retirement will result in a lower payment. By enrolling now you can start to get credit for "time served" in the ICR.

Sure, you'll probably never be able to fully repay the debt, although any remaining balance would be forgiven in 25 years. But in the meantime you'll get the lowest possible payment and any balance of your loans due will terminate when you naturally pass after a long and happy retirement.

You can use the calculator on the bottom of this guide and learn more about all the plans and options that are available.


Get Out of Debt Guy - Twitter, G+, Facebook

If you have a credit or debt question you'd like to ask, just click here and ask away.

If you'd like to stay posted on all the latest get out of debt news and scam alerts, subscribe to my free newsletter.