HUG Your Parent Loans

And All Your Other Debt Too!

Because funding higher education shouldn’t compromise your retirement.

We believe that every parent who helps finance the cost of higher education, that their child could have a better life, deserves an affordable repayment program that doesn’t endanger their own secure retirement.   

We know parents continue to find ways to help their children, and acquiring debt is sometimes unavoidable, but it doesn’t have to derail your retirement plans.  It IS possible to manage debt successfully without breaking the bank.  We developed HUG to provide the tools you need most.

  1. Access to proprietary software and vital financial informationHUG helps you plan even before the time of application, so you can utilize loans wisely and maximize savings.
  2. A realistic, fully dynamic and flexible plan for repaymentHUG helps you take advantage of the best payment arrangements available AND pay all your debt off (even your mortgage) ahead of schedule. Perhaps as importantly, we focus on preserving and building strong credit.
  3. Comprehensive financial coaching for budgeting, building cash reserves, management of future debt, protecting and maximizing retirement assets and more.

Flashback

The housing bubble of 2007/2008.  It is likely you, or someone you know was affected.  Lending institutions approved mortgages with exuberance. High loan-to-value home equity loans and mortgages, both fixed and variable rate, buoyed by sloppy appraisal guidelines and little or no income verification known as “low doc” or “no doc” loans became the norm.  Homeowners jumped on board based on affordability of payments and perceived values in the present milieu.

When housing values declined, and incomes waned the government offered “loan modification” programs with lower payments to those who qualified in hopes of thwarting record foreclosures and bank failures.  Experts agree the program proved to be cumbersome, unwieldy, and extensively ineffective by most accounts.  It stands to reason that lowering monthly payments (and adjusting interest rates in some cases) may have stemmed the tide, but also extended the number of years to pay the loans off.  In rare cases, some principal, (and for a limited time, the tax owed on it) was even forgiven.

Present day 

Sound familiar? Current restructuring and repayment programs offering lower payments or forgiveness for education loans are based on similar models.

Unfortunately, lowering payments alone can stretch the burden of a typical ten year education loan to 20, 30 years or more.  Although the lower payments are appealing, and sometimes necessary, this may be a shortsighted solution with a long-term cost.

Every problem has a solution!

We believe a successful approach MUST include:

  1. Affordable payments
  2. Accelerated payoff schedule - typically half the time or less
  3. Loans paid in full or forgiven
  4. Low effective interest rate
  5. Access to financial coaching – fostering healthy money management skills like budgeting, saving, and managing future debt.

Did You Know…

  • Borrowers over 60 carry more than half the outstanding student debt today? 1
  • Two children in college at $20,000 per year can generate $160,000 in Parent Direct PLUS loans. The standard 10 year repayment plan would have monthly payments of about $1,800. “Even [if the loans qualified for IBR] then, a family of four with a combined AGI of $80,000 will still have a monthly payment of around $1,000 a month – paying back a total of more than $300,000 including interest. Loan debt like this can affect retirement savings, or even retirement itself.” 2
  • Education debt surpassed credit card debt in the U.S. for the first time in 2010? 3
  • Parents have even fewer repayment options available than students? 4
  • Parents are paying more than 10 percent this year for a PLUS loan. (For the 2016-2017 school year PLUS loans taken out by parents have a 6.31 percent fixed interest rate and there is also a 4.276 percent fee tacked on to that.) 5
  • CBS report warned as far back as 2012, “Parents can't shake the debt” and “In fact, the amount owed will balloon when the loans go into default.” PLUS loans have no borrowing amount cap, a 4% origination fee... Short of severe delinquency or bankruptcy, the federal government doesn’t consider parents' ability to repay PLUS loans, and holds the power to garnish wages, offset Social Security benefits and seize tax refunds. 6
  • According to the Consumer Financial Protection Bureau’s Snapshot of older consumers and student loan debt “Student loan debt among older consumers has increased, in large part, due to the growing number of parents and grandparents participating in the financing of their children’s and grandchildren’s college education.” … an increasing number of older Americans are financially struggling because of the growing amount of debt they owe in their retirement years. 7
  • From 2005-2015 the number of borrowers age 50-64 rose by 119% while the amount of outstanding Federal Student Loan balances increased by 323%! ii  That’s exclusive of private and other education-related debt.

i) Irwin Corey (July 29, 1914 – February 6, 2017) “The World’s Foremost Authority” https://www.brainyquote.com/quotes/quotes/i/irwincorey137603.html

ii) “Social Security Offsets”United States Government Accountability Office Report to Congressional Requesters (December, 2016): Appendix II: Additional Data Analysis of Student Loan Debt for Older Americans 60.



1) U.S. Department of Education, Federal Student Aid, Federal Student Aid Portfolio by Loan Type, https://studentaid.ed.gov/sa/about/data-center/student/portfolio

2) Betsy Mayotte “Parents: Think Hard Before Borrowing for, With Your Student” USNews (August 20, 2014) http://www.usnews.com/education/blogs/student-loan-ranger/2014/08/20/parents-think-hard-before-borrowing-for-with-your-student

3) Bloomberg BusinessWeek Student Loans, Debt for Life Federal Reserve Bank of New York, Center for Microeconomic Data (September 18, 2012) https://www.newyorkfed.org/microeconomics/topics/student-debt

4) Home Room, The Official Blog of the U.S. Department of Education, PLUS Loan Basics for Parents, https://blog.ed.gov/2016/08/plus-loan-basics-parents/

5) Carla Fried, Why Parent PLUS Loans Can Be Costly Consumer Reports (July 26, 2016) http://www.consumerreports.org/student-debt/why-parent-plus-loans-can-be-costly/

6) Lynn O’Shaughnessy “Why parent college loans can be hazardous” CBS moneywatch (December 4, 2012) http://www.cbsnews.com/news/why-parent-college-loans-can-be-hazardous/

7) Office for Older Americans & Office for Students and Young Consumers “Snapshot of older consumers and student loan debt” Consumer Financial Protection Bureau (January, 2017) Conclusion 24. See CFPB, Snapshot on older consumers and mortgage debt (May 2014), http://files.consumer finance.gov/f/201405_cfpb_snapshot_older-consumers-mortgage-debt.pdf.
“What I would like to do... once I take care of all my kids' student loans, is buy a red 1965 Mustang and fully restore it.”
– Mike Quigley