Parent PLUS borrowers stealing from their retirement to fund kids' college education: Survey

Bob Fernandez and Erin Arvedlund, The Philadelphia Inquirer on

Published in Business News

While college students have borrowed heavily for their schooling, parents also borrow heavily to help their children, thus burdening two generations with debt.

"Not only is their child going into debt, they are also going into debt," said Anthony "Tony" D'Angelo, the executive producer for Collegiate Empowerment, a nonprofit educational firm.

Because of the climbing cost of post-secondary education, and the easily available financing for those college degrees, D'Angelo compares college debt to the sub-prime housing market, which was fueled by easy-to-get mortgages and constantly higher real estate prices.

"At least you owned a shack in Miami," D'Angelo said of the housing crash. "Now you have a kid with a sociology degree with a job in Starbucks with a tip jar."

NerdWallet found that student loan debt is affecting families across multiple life stages: young adults burdened with debt as they try to build their lives; others near retirement who see their financial lives upended; and retirement-aged parents and grandparents who took out loans to help a loved one get through school.


Federal Parent PLUS loans can carry higher fees than private student loans, according to, a Newtown Square, Pa.-based consulting firm tracking the student loan industry. Many parents also do not understand that a PLUS loan is legally their responsibility and not the student's.

Parent PLUS loans have a standard interest rate for all borrowers established each May, which goes into effect each July 1. The 2021-'22 federal parent PLUS rate is 6.28%. The parent PLUS loan origination fees can be also higher than private loans, at 4.22%, according to

Fred Amrein, CEO of, which has developed digital tools to help families to navigate college costs, said that "people over 50 are the fastest growing debt borrowers."

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