Thus sayeth Raycpa “I have parent plus loans left on my last kid out of 3 who went to college. I am holding off paying on these loans. I have a plan for using excess funds that otherwise are earmarked for student loans plus the current savings from not having to pay principal or interest.”
A good plan provided you avoid capitalization of your parents plus loan.
To give the example of myself, we took out a parents plus loan for our daughter in 2012 ($21K, dispersed in 2012-13) she left school with a degree in 2017, we started payments in feb 2018. The suggested payment was $358.00/month but we sent in $400
When all fed loans went into forbearance in March 2020 we continued payments of $400/month then in Aug 2020 upped it to $800/month. Then we made 10 or 11 big payments of $1000 or $2000 this resulted in a paid off loan in October 29, 2021.
Between the time the loan went into forbearance and the pay off day we sent in payments totaling $19,500 on a $21,000 loan that we had been making regular payments even above the minimum amount. We paid about $33,000 for a $21,000 federal student parents plus loan.
So some might be asking why so much considering we were current on our payments? Answer: capitalization. Capitalization is when the lender adds the interest to the principal. So in effect you pay interest on interest, sort of like compound interest paid on a passport savings account (in the old days).
I don’t think most student loan borrowers are aware of this. Here is a link which explains. https://studentdebtwarriors.com/students/interest-capitalization-increases-student-loan-debt/#:~:text=Student%20loan%20interest%20capitalizes%20at%20various%20times%20over,plan%20changes%3B%205%20When%20you%20consolidate%20your%20loans.
My personal opinion is at best the government will forgive less than $50K if Biden wants to shut up the progs at the taxpayers expense he might try to throw them a bone but the political implications of student loan forgiveness when mortgage foreclosures are ramping up would be a political headache with little gain for the Dems. Even so I doubt Biden will fight for middle class taxpayers forgiveness of parents plus loans.
Fortunately? My kid is pursuing a doctorate degree and then plans on medical school so loans have not capitalized . My backup plan is to switch loans to private with lower rates after its obvious government benefits are not likely.