Report recommends Congress cap borrowing by parents of college students

Apr 16, 2019 by

Lending program for parents of undergraduates has expanded beyond its intended use, leaving many borrowers with debts they struggle to repay, report finds. Co-authors argue Congress should cap borrowing under the Parent PLUS program

Andrew Kreighbaum –

While total federal student loan borrowing has actually been declining for several years amid dwindling enrollments, lending through a federal program for parent borrowers has been on the rise.

The Parent PLUS loan program frequently issues debt to parents with little chance of successful repayment, a report released today finds, and functions as a “no-strings-attached” revenue source for many colleges.

The program issued an average of $16,542 to the parents of 779,000 undergraduates in the 2017-18 academic year and now makes up nearly a quarter of undergraduate debt disbursed by the federal government annually. Parent PLUS loans are typically taken out when students have exhausted all other sources of aid, including federal direct loans.

 

Source: Report recommends Congress cap borrowing by parents of college students

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