Mike Pence borrowed upwards of $280,000 to pay for college
NEW YORK — If you think Donald Trump is out of touch with the average American, you may find his running mate, Mike Pence, a little more relatable.
Like many American parents, the Republican vice presidential candidate took out loans to help his kids through college.
The father of three and current governor of Indiana reported having 7 outstanding federal Parent PLUS Student Loans on his financial disclosure form, which he released this week.
“Like many American families, we have been fortunate and blessed to raise three wonderful children and put them through college while doing work that we love,” Pence said in a statement accompanying the disclosure.
Combined, Pence owes somewhere between $95,000 and $280,000 on his PLUS loans. (He was not required to provide exact amounts, only ranges.)
If the debt were divided equally over three kids, that comes to between $32,000 and $93,000 per child.
Parents of 716,000 undergraduates borrowed through the Parent PLUS program for the 2014-2015 school year, according to the latest data from the College Board.
The average PLUS loan size per child that year was $14,750.
When you have three kids — especially relatively close in age as Pence’s son and two daughters are — it’s not surprising that a parent would take out multiple loans over the course of a few years, assuming you have to borrow in the first place.
“Taking a loan every year for each child is not unusual,” said college financing expert Sandy Baum, a senior fellow at the Urban Institute.
If Pence ended up borrowing just over $30,000 per child, that’s fairly reasonable, Baum said.
The average cost of just one year at a private college comes to $43,921 including tuition, room and board. According to various reports, his two daughters attended private schools.
The same year at a public school could run around $20,000 for in-state students and closer to $34,000 for non-residents.
But if Pence’s debt comes closer to $90,000 per child, “that may be digging a hole. If you have a reasonable income and have saved for college, you should be able to borrow less,” she added.
The disclosure form just offered a snapshot of some but not all of Pence’s assets held between January of 2015 and July of this year. They included two 529 college savings plans that together held between $2,000 and $30,000; and a bank account with between $1,000 and $15,000.
During those 19 months, his income approached $174,000. (His annual salary as governor is roughly $112,000.)
There may be cheaper sources of financing than PLUS loans. For instance, PLUS loans may charge higher interest rates than, say, home equity loans or lines of credit. Pence reported paying between 6.16% and 6.96% on the money he borrowed.
On the other hand, for some parents the only way they can borrow is through the Parent PLUS Loan program because the credit requirements aren’t as stringent as loans on the private market, Baum said.
Some parents, of course, just may not want to tap other assets in order to fund their children’s educations.
It’s hard to ascertain the reasons why Pence or any other parent chooses to finance college without much more information on their financial situation.
More on that may be coming from Pence soon. He has promised to release his tax returns “in the near future.” His boss, by contrast, has consistently refused to do so until the IRS is done auditing him. When that will be is unknown.