ROHNERT PARK, Calif., Dec. 4, 2017 /PRNewswire/ -- PLUS loans are federal student loans available for graduate and professional students to help them pursue their advanced education dreams. However, with the higher interest rates and other contributing factors, borrowers who have PLUS loans often hold more debt than those who don't. Higher debt means higher monthly payments, which can be difficult to handle. Ameritech Financial, a document preparation company that assists borrowers in applying for income-driven repayment plans through the Department of Education, can help PLUS loan borrowers potentially lower their payments and focus on the reason they went to grad school.
PLUS loans are only available for independent students and parents of undergrads. Since all students at the graduate level and above are considered independent, they are likely to have taken on more debt than undergrads. In fact, according to data from the Federal Student Loan Portfolio, 1.1 million borrowers hold $56.6 billion in PLUS loans. That comes out to an average of $51,454 per borrower. That's a lot of debt compared to the national average of $37,172 per borrower.
"Thanks to PLUS loans, graduate students have the resources to get through that extra school to pursue their dreams," said Tom Knickerbocker, executive vice president at Ameritech Financial. "But PLUS loans can end up costing a lot more than the loans undergrads take out, and it can leave borrowers with advanced degrees wondering how to handle it all."
There are several reasons graduate PLUS loan borrowers have a lot of debt, without even looking at students' spending patterns:
- High interest rates that accumulate during school: current grad PLUS rates are at 7 percent, compared to undergraduate rates at 4.45 percent.
- High origination fees: 4.264 percent of a PLUS loan is taken out before disbursal to a school compared to 1.066 percent for undergraduate loans.
- High loan limits: graduate students can borrow up to the cost of attendance based on the school, with an aggregate limit of $138,500, compared to a $31,000 aggregate limit for undergraduate students.
- PLUS loans are only available to graduate and higher level students, so they are likely to be adding those loans to an existing student debt load.
All those factors can add up to an unmanageable student loan situation after graduation. Thankfully, they have options in the form of federal repayment plans and forgiveness options. Public Service Loan Forgiveness is a great option for graduates whose dream is to work in the public sector because many of those jobs require advanced degrees but don't compensate well enough to pay for them. For those in the private sector, income-driven repayment plans can provide monthly relief by calculating payments on income and end in loan forgiveness if there is a balance left after 20 to 25 years.
"The higher a borrower's debt, the more they can potentially benefit from income-driven repayment plans," said Knickerbocker. "That's why IDRs can be the right strategy for graduates with PLUS loans. At Ameritech Financial, we help borrowers apply for IDRs so they can afford their payments and not fall behind. Especially for students who followed their dream through grad school, affordable payment plans can help federal student loan borrowers focus on what matters after graduation."
About Ameritech Financial
Ameritech Financial is a private company located in Rohnert Park, California. Ameritech Financial has already helped thousands of people with financial analysis and student loan document preparation for federal student loan repayment programs offered through the Department of Education.
Ameritech Financial is a member of the Association for Student Loan Relief (AFSLR), and each representative on the phone has received the Certified Student Loan Professional certification through the International Association of Professional Debt Arbitrators (IAPDA).
Ameritech Financial prides itself on its exceptional customer service.
To learn more about Ameritech Financial, please contact:
5789 State Farm Drive #265
Rohnert Park, CA 94928
SOURCE Ameritech Financial