How Parents Can Best Manage Student Loans with Erik Kroll

This week’s conversation was a real eye-opener. I had the pleasure of sitting down with Eric Kroll, a financial advisor based in Wisconsin who specializes in helping individuals over the age of 50 navigate the murky waters of student loans. Eric runs a website aptly named Student Loans Over 50, and what he shared in this episode was both sobering and incredibly informative.

Student loans probably aren’t what come to mind when you think about retirement planning—but as Eric pointed out, there’s a growing number of people nearing retirement age who are still grappling with student debt. That alone is a tough pill to swallow. The idea that you can see the retirement finish line, yet still have a six-figure student loan balance weighing you down, is daunting. But this is the reality for millions of Americans.

Parent PLUS Loans

We started by digging into how these large balances accumulate, especially among parents. Many are turning to Parent PLUS Loans, a type of federal student loan available to parents who want to help fund their children’s college education. Unlike federal loans taken out by students—which have annual limits—Parent PLUS Loans have no cap beyond the school’s cost of attendance.

As long as the parent passes a minimal credit check, they can borrow the full amount. Tuition, room, board—whatever’s needed, minus any financial aid the child receives. Sounds helpful, right? Well, the ease of access can quickly turn into a financial trap.

Real Life Example

Imagine sending two kids to a college that costs $30,000–$40,000 per year. Over four years, that adds up to $200,000 or more—per child. Now picture taking out all of that in Parent PLUS Loans.

That’s the kind of debt Eric sees regularly. And according to federal data, over 9 million borrowers over the age of 50 still carry federal student loan debt, with over a million of them owing more than $100,000. This group tends to carry some of the highest balances of any age bracket.

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Borrowing Options

According to Eric the key differences between federal loans like Parent PLUS and private loans are:

While private loans may offer lower interest rates (especially if you or your child has strong credit), they don’t come with the same protections as federal loans—like deferment, forbearance, or access to forgiveness programs. If you go the private route, someone (usually the parent) needs to cosign, and they’re still on the hook if things go sideways after graduation.

Parent PLUS Loans, on the other hand, are under the federal umbrella, which means they qualify for a number of repayment and forgiveness programs—with some caveats. Eric explained that although these loans are technically the most restrictive of the federal loan types, there are still planning strategies that can make repayment more manageable. The key is understanding how to access the right repayment plans.

Double Consolidation Loophole

Here’s how it works: normally, Parent PLUS Loans only qualify for the Income-Contingent Repayment (ICR) plan, which is based on 20% of your discretionary income—a number that can lead to painfully high payments. But by consolidating your loans in a specific multi-step way (yes, three consolidations total), you can open the door to more generous income-driven repayment plans like SAVE or Pay As You Earn (PAYE). These plans are based on just 5–10% of your discretionary income, and often have a more forgiving 20 or 25-year forgiveness timeline.

So what does that look like in real terms? Eric gave a helpful rule of thumb: for every $100,000 in federal student loans, your standard 10-year repayment plan will likely cost you around $1,000 to $1,200 per month. But under the right income-driven repayment plan, especially if you qualify through the double consolidation strategy, you could cut that monthly payment in half—or even lower, depending on your income.

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How Are Student Loan Rates Set?

We also discussed how student loan interest rates are set—currently hovering around 8% for Parent PLUS Loans, thanks to being tied to the 10-year Treasury. These rates are fixed once the loan is disbursed, but they're recalculated each year for new loans. So even in years when interest rates were near zero, new student loans still carried rates of 6% or higher, which adds insult to injury when you're trying to fund college on a budget.

Finally, we touched on forgiveness. While public service workers may qualify for full loan forgiveness after 10 years of qualifying payments, most borrowers will need to make payments for 20 to 25 years before they’re eligible for forgiveness. And yes, if there’s a remaining balance at the end of that term, it's forgiven—but with a catch: the forgiven amount is taxed as income.

Real Life Example

Let’s say you’re carrying $100,000 in Parent PLUS loans. Under the standard 10-year repayment plan, that’s around $1,200/month. But if you qualify for a lower payment—say $600/month—under one of the income-driven repayment plans, the total paid over 20 years could actually be more than the 10-year plan. On the surface, it might feel like a trade-off: pay now or pay later. And yes, over time, $600 x 240 months is $144,000. So, why stretch it out?

Eric explained that it’s not always just about the math. For many borrowers, especially those nearing retirement, it’s also about cash flow and affordability.

A $600 payment may be the difference between staying financially afloat and sinking into stress. And depending on how your income changes—say, if you retire or move into part-time work—your payments could drop further under these income-driven plans.

Public Service Loan Forgiveness (PSLF)

Then came one of the more fascinating revelations: if you work for a qualifying nonprofit or public sector employer, like a hospital or school district, and you complete a double consolidation process on your Parent PLUS Loans, you may qualify for Public Service Loan Forgiveness (PSLF). That means you could make 10 years’ worth of reduced payments—based on your income—and then have the rest of the loan balance forgiven tax-free. That’s right, no tax bill on the forgiven amount.

This is especially impactful for people working in healthcare or education. Eric pointed out how many doctors take advantage of PSLF, particularly since they graduate with hundreds of thousands in student debt. During residency, their incomes are low, so their qualifying payments are low—and yet they still inch closer to that 10-year forgiveness mark. The kicker? If they’ve never taken out Parent PLUS Loans, they don’t need to worry about the double consolidation loophole at all. That’s a headache reserved specifically for parents.

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Now, about that loophole: it’s currently on borrowed time.

Under new rules tied to the SAVE plan (which replaced the old REPAYE plan), the double consolidation workaround is set to officially close on July 1st, 2025. Eric emphasized this deadline multiple times—it’s crucial. If you want to access the lower payment plans that undergrads can, you need to complete the entire double consolidation process before that date. The whole thing takes around six months, so ideally, you want to get started by December 2024 or January 2025 at the latest.

However, things are still in flux. The SAVE plan is currently tied up in legal battles, and depending on the outcome the rule change could be delayed or overturned. But as Eric says, it’s better to plan as if the July 1 deadline is locked in.

We also explored how the timing of your children’s education affects your ability to consolidate. If you’ve already taken out a few years of loans for one child and they’re about to graduate—or if you have multiple children at different stages—you can still work with the loans you already have. You only need two loans to initiate the double consolidation process, and there are even ways to strategically split loan disbursements in a given year to create those two separate loans.

But how do you actually start?

This is where things get really technical. You’ll need to fill out paper consolidation applications—not just online ones—because online forms only allow one consolidation every six months. The process involves multiple steps, and you have to be meticulous about which loans you’re consolidating and which ones you’re not. A key mistake—like failing to fill out the section that excludes certain loans—can derail the entire strategy.

You also have to be strategic about which loan servicers you use and when. For example, if you want your final loan servicer to be Aidvantage, you might start the process using Mohela and EdFinancial to avoid having multiple consolidations at the same servicer in a short window (which can combine your loans unintentionally). Eric recommends staggering the consolidations to make sure they remain distinct and don't get automatically merged, which would ruin the loophole.

It’s… a lot.

That’s why Eric offers more than just advice—he helps clients hands-on. Whether you want to go the DIY route or need step-by-step guidance, he helps borrowers structure their loans correctly, choose the best repayment plans after consolidation, and even join calls with loan servicers to get the paperwork right.

Closing Thoughts

Managing student loans over 50 isn’t just about making payments—it’s about making smart moves. With options like forgiveness, income-driven repayment, and strategic consolidation, there is a path forward. But the window to take advantage of it—at least under the current rules—is closing fast.

If you’re over 50 and dealing with student loans, or if you’re a parent considering Parent PLUS Loans for your child’s education, don’t wait until it’s too late. Know your options, build a strategy, and don’t be afraid to ask for help. Whether it’s $20,000 or $200,000 in loans, the decisions you make today will impact your financial future for decades to come.

If you have a question or topic that you’d like to have considered for a future episode/blog post, you can request it by going to www.retirewithryan.com and clicking on ask a question. 

As always, have a great day, a better week, and I look forward to talking with you on the next blog post, podcast, YouTube video, or wherever we have the pleasure of connecting!

Written by Ryan Morrissey

Founder & CEO of Morrissey Wealth Management

Host of the Retire with Ryan Podcast