Parents are borrowing more to send their children to college and struggling to repay those loans, says a new study from The Brookings Institution.
Here’s what you need to know and what to do about it.
Latest Student Loan Debt Data: Parent PLUS Loans
According to recent data, at least 3.4 million Parent PLUS borrowers owe $87 billion (not including any consolidated loans). That represents approximately 6% of total outstanding student loan debt of $1.5 trillion.
The rise in Parent PLUS Loans has been driven by increased tuition, the elimination of borrowing caps and regulatory changes, among other reasons.
Today, the average Parent PLUS Loan balance is $25,600, with annual borrowing amounts having more than tripled over the last 25 years.
What Is A Parent PLUS Loan?
A PLUS loan is a federal loan that graduate students, or parents of dependent undergraduate students, can borrow to pay for college or a career school. Parent PLUS Loans, in particular, refer to loans borrowed by parents on behalf of a dependent undergraduate student.
The parent is the borrower, and the lender is the U.S. Department of Education. A parent can borrow an amount up to the cost of attendance, less any financial assistance received.