We are now halfway through our last segment of student loan myths. This next one is solely seems to be the fault of a few misinformed (and sometimes deceptive) financial aid offices
What you think happens. You are taking out a loan for your child’s education. It is in your name because they couldn’t get enough to pay for their education. When you talked to the school they told you once the payments begin (or after so many payments) these loans can be transferred to the child.
What actually happens. Parent PLUS loans are loans that are taken out by parents for the child’s education. It is the parents loan and they are the borrower. As a result they are responsible for the loan. In addition these loans cannot transferred to another individual and cannot be consolidated with a loan where the child is the borrower.
Where there may be a morsel of truth to this. Frankly there is no truth to this. The only way to get these loans into a child’s name is for the child to get a private loan (home equity, etc) to pay off the parent’s loan.