I want to help my child go to college, should I take out Parent PLUS loan to help pay for it?

Student loan experts say Parent PLUS loans are dangerous for borrowers, so no, don't take them out, at least not if there is any other option.

According a recent blog post by the National Consumer Law Center (NCLC), Parent PLUS loans can be very dangerous products compared to other kinds of student loans, for several important reasons:

1. the interest rates for Parent PLUS loans are higher than other federal student loans;

2. PLUS loans have "origination" fees of 4.2% compared to NO FEE for other federal loans;

3. There are no borrowing limits other than the total cost of attendance, so a parent or parents borrowing PLUS loans can get into serious trouble, and borrow more than they can afford to repay;

4. Parent PLUS loan borrowers are not eligible for Income-Based Repayment (IBR) options, making it harder to avoid default and the consequences of default;

5. If you consolidate a PLUS loan with other federal loans, you can no longer use IBR for any of the loans;

6. Like other student loans, PLUS loans are very difficult to discharge in bankruptcy;

7. If you default on a PLUS loan, you face the full weight of government collection powers, including wage garnishment, Social Security offsets and tax refund offsets. Also, there is no "statute of limitations" or time limit for the collection of federal student loans.

So if you want to help your child get through college, think twice before taking out Parent PLUS loans, for all of these reasons. If you later find that you cannot pay them, you may find yourself paying them back out of your Social Security benefits, or with funds that you need yourself for your own needs, like retirement!