Parents taking student loan money for personal use

[Arynella]

How would you know their reasoning?

Whatever their reasoning might have actually been, they told my SIL it was to cover her rent. I think it's perfectly understandable for her to be upset about it being used for other things while she has to scramble for money. It's not about who has to pay the loan back, it's about getting the rent paid.

She's starting to think about dropping out of school so she can get a full time job and live 100% on her own. She asked me to help her find a way to avoid that, which is why I'm here.

 

[Zigner]

Whatever their reasoning might have actually been, they told my SIL it was to cover her rent. I think it's perfectly understandable for her to be upset about it being used for other things while she has to scramble for money.

She's starting to think about dropping out of school so she can get a full time job and live 100% on her own. She asked me to help her find a way to avoid that, which is why I'm here.

Loan her the money and/or tell her to get a part time job and go to school part time.

It's obvious she can't rely on her parents to shoulder the load.

 

[TinkerBelleLuvr]

If the parents are not going to provide her with the money, then she best not provide the parents with the information needed for the student loans. Because she is an adult, they require HER permission for access to school info.

 

[OHRoadwarrior]

Whatever their reasoning might have actually been, they told my SIL it was to cover her rent. I think it's perfectly understandable for her to be upset about it being used for other things while she has to scramble for money. It's not about who has to pay the loan back, it's about getting the rent paid.

She's starting to think about dropping out of school so she can get a full time job and live 100% on her own. She asked me to help her find a way to avoid that, which is why I'm here.

Please show me the law stating parents must pay for their child to go to college absent a court order. I want to hide it from my kids.

 

[LdiJ]

If the parents are not going to provide her with the money, then she best not provide the parents with the information needed for the student loans. Because she is an adult, they require HER permission for access to school info.

Not only that, but if she earns enough money that she is clearly providing more than 50% of her own support, then they don't get to claim her as a dependent and they don't get to claim education credits for her either.

I realize that many people here are not particularly on the side of the student. However I think this is pretty disgusting on the parent's part. They are getting low interest rate loans that they could not get if they didn't have a dependent adult child in college, they are getting some hefty tax breaks for having a dependent child in college, and they are using the money that is supposed to provide support to the college student for whatever they want to spend it on. I just hope that it really is a loan that is strictly the parent's responsibility to pay back.

 

[Arynella]

Please show me the law stating parents must pay for their child to go to college absent a court order. I want to hide it from my kids.

Lucky for you there isn't one, then.
They did agree to cover her costs, though, so I have little sympathy for them.

 

[xylene]

No, they CAN pay her rent with the loan money.

"PLUS Loan funds can be used for tuition, school supplies, housing, and more."

http://www.parentplusloan.com/

I can't believe you endorse student loan fraud.

 

[justalayman]

They did agree to cover her costs, though, so I have little sympathy for them.

does she have some contract binding them to that?

If not, guess what she has?

 

[Arynella]

does she have some contract binding them to that?

If not, guess what she has?

They took out loans to cover her expenses and are using the money for other things. It's not like they promised and then did nothing to fulfill the promise. They went ahead and took out the loans. And they're keeping the money.

 

[justalayman]

They took out loans to cover her expenses and are using the money for other things. It's not like they promised and then did nothing to fulfill the promise. They went ahead and took out the loans. And they're keeping the money.

but unless your friend is obligated to repay the loan, although it is possibly fraud, other than that, it really isn't any of your friends business. From what I found about student plus loans is that it is a loan to the parents.

so, is friend obligated to pay back the loans?

 

[xylene]

but unless your friend is obligated to repay the loan, although it is possibly fraud, other than that, it really isn't any of your friends business. From what I found about student plus loans is that it is a loan to the parents.

so, is friend obligated to pay back the loans?

Wow, endorsing loan fraud as some kind of trivial violation of contract.



Well, there's the bandwagon.

 

[TinkerBelleLuvr]

Reality is that if the parents are NOT providing more than half the money to support your SIL, they have no right to claim her. She should file, in that case, claiming herself and let her parents deal with the problem.

 

[justalayman]

Wow, endorsing loan fraud as some kind of trivial violation of contract.



Well, there's the bandwagon.

You are misinterpreting what people are saying. I said nothing about the fraud other than it might be a possibility. Even if it is fraud, if the OP's friend is not liable for the loan, it doesn't affect her and as such is a NOYB issue.

If you want to get into a discussion of the possibility of loan fraud and what could come of it, we can do that as well but in reality, it just doesn't have anything to do with the OP's friends issue.

 

[ecmst12]

If the parents are paying her tuition and even SOME of her rent, then there is no fraud. The parent loan is reimbursing them for what they paid for her tuition.

Are the parents cosigned on her lease? Do they send checks to her landlord? Are they supposed to send her money so that she pays the rent herself? Not many people will rent to a college student without a cosigner, that means if the rent doesn't get paid the landlord is going to sue them for it. What exactly is the arrangement?

 

[TinkerBelleLuvr]

There is a difference between CO-SIGNING and actually paying the rent. From what the OP stated, it appears that the parents promised to pay for an apartment but have not followed through on their promise. Instead, they took out parent loans but haven't helped her SIL to actually PAY for the apartment.

When my daughter was in school, I did co-sign on her apartment. I also helped her financially. Between what I paid and the medical coverage, I paid for more than 50% of her costs. That is NOT what I'm hearing here.

If the SIL is paying for all her tuition and apartment or more than 50% of the costs, SHE is eligible for claiming herself on her tax 1040.