Meet a single dad with $550,000 in student loans for his 5 children: 'I'm not going to take the chance of not sending my kids to school'
ROBYN BECK / Contributor / Getty Images
Reid Clark, 57, unexpectedly became the sole provider for his five children.
He took out PLUS loans from parents to help fund their education and told Insiders he now owes $ 550,000.
"I'm considering paying $ 3,000 a month for most of my life," he told Insider.
Check out Insider's business page for more stories.
Reid Clark hadn't expected to care for five children with his income alone.
Clark was preparing to pay for his five children's education as part of a two-income family, but he and his ex-wife divorced in 2011. Just a few years later, when the kids were going to college, he decided to join. to apply federal loans to self-finance their education. (For private reasons, his ex-wife does not contribute.)
Now his debt load is over $ 550,000.
"I want to pay $ 3,000 a month for most of my life," Clark, 57, told Insider. He estimates that he will have to make these payments for at least another three decades.
Parent PLUS Loans, the type of loan Clark is paying off, is a federal loan that parents can use to pay for their children's education. It can cover the full cost of childcare minus any financial support already received for the child.
Reid Clark with his five children. Reid Clark
For Clark, the ability to obtain these loans meant he did not have to postpone his children's education despite the unexpected change in his financial position. But now, he said, his retirement could very likely be postponed despite making a livable salary in the healthcare sector for choosing to take on debt to prioritize the future of his children.
"For those of us who want to see our children get better, we understand that you can improve yourself and your chances of success through education," said Clark. "And I'm just not going to risk not sending my children to school, even though it's a huge financial burden. It's not an option."
Clark says he wanted only the best for his children, and the parent's PLUS loans enabled him to give the best to his children. But he is "very concerned" about his own financial future and blames high interest rates and lending practices that do not take into account the borrower's income or change in income.
"You make it really difficult to raise your children and pay for them"
President Joe Biden has advocated the cancellation of $ 10,000 in student debt for each borrower, and some Democrats are urging him to cancel $ 50,000 of each borrower's federal student loan through executive action. However, it is unclear whether the parents' PLUS loans will be included in this forgiveness, and helping parents with their debts has yet to be part of the talks on Capitol Hill.
Parent PLUS loans are the most expensive type of federal loan: they currently have an interest rate of 6.28% for the 2021-22 school year, compared to 3.73% for undergraduate school loans.
New data released last week by the Texas Public Policy Foundation showed parents' exposure to student debt. Andrew Gillen, author of the report, told Yahoo Finance that one of the problems with Parent PLUS loans is that the amount parents receive is based on the cost of participation, not how much the parents actually pay a “dangerous mentality” can arise, which leads to unchecked borrowing.
It's not that Clark's children went to the most expensive schools in the country. Three of them went to small schools in Pennsylvania, where Clark currently lives, and the other two went to other state schools on the east coast. But tuition fees have also been rising for years for public universities.
Since 2001, average government tuition fees have increased 211%. In addition to Clark's loans, each of his children took out about $ 20,000 in student loans because Clark wanted them to have a "selfish interest" in their education.
He said his debts were due to shortcomings in the state student assistance system, where the government makes it very easy for people to borrow but very difficult to repay.
"The problems start at the very beginning of the whole process," said Clark, referring to the unaudited amount parents can borrow years in advance. "You make it really difficult to raise your children and pay to raise them."
Once the federal student loan debt hiatus is lifted in February, Clark believes he will have the funds to make monthly payments on his loans, but eradicating his debt completely could take decades and he said he had "no hope" of it the issuing of student loans at any time soon.
"I am very concerned about my ability to repay the loans during my remaining years of work and it will scare me even more in a few years when I retire with very limited income," said Clark. "That's the part that scares me the most."
Read the original article on Business Insider
You should check here to buy the best price guaranteed products.
A Republican group is putting up gigantic billboards to remind Trump that he lost
Merkel vows continuity on last visit to Erdogan
Texas Man Is Sentenced for Using Dating App to Target Gay Men
Carmen Electra, other models sue NC strip clubs, accuse them of trademark infringement
Head of largest California union arrested on charges of grand theft, tax fraud
3 astronauts arrived at China's new space station, which it's building as it's banned from the International Space Station