| Title: |
The Subprime PLUS Loan Crisis: How Dozens of Universities Steer Low-Income Families to Debt They Can't Afford. Education Policy & Higher Education |
| Language: |
English |
| Authors: |
Stephen Burd; New America |
| Source: |
New America. 2026. |
| Availability: |
New America. 740 15th Street NW Suite 900, Washington, DC 20005. Tel: 202-986-2700; Fax: 202-986-3696; Web site: https://www.newamerica.org |
| Peer Reviewed: |
N |
| Page Count: |
48 |
| Publication Date: |
2026 |
| Sponsoring Agency: |
Joyce Foundation |
| Document Type: |
Reports - Descriptive |
| Education Level: |
Higher Education; Postsecondary Education |
| Descriptors: |
Student Loan Programs; Debt (Financial); Private Colleges; Public Colleges; Federal Programs; Parents; Low Income; Paying for College; College Students |
| Geographic Terms: |
District of Columbia; New York (New York); Alabama; Louisiana |
| Laws, Policies and Program Identifiers: |
Federal Direct PLUS Loan Program |
| Abstract: |
A New America report identifies 41 universities that appear to be steering low-income families to Parent PLUS loan debt they cannot afford, at the same time that they are providing large tuition discounts to wealthier students. The list includes 23 selective private universities and 18 public flagship and research institutions, nearly half of which are in the South. Collectively, these 41 universities, many of whom work closely with private, for-profit enrollment management consultants, spent $2.4 billion of their own financial aid dollars on students who lacked financial need in 2023, according to the latest data available. Nearly $2 out of every $5 these schools spent on institutional aid that year went to non-needy students--those whom the federal government deems able to afford college without financial aid. Meanwhile, more than 32,000 families of Pell Grant recipients who had either graduated or left these schools in the recent past were stuck with PLUS loans they took out to pay for their children to attend these institutions. These families carried a median Parent PLUS loan debt load of nearly $30,000 each. For many of these families, the amount they owed came close to or exceeded their yearly earnings. A potential subprime PLUS loan crisis is looming. It's hard to see how encouraging low-income families to take on debt that they probably can't repay will end in anything but disaster, unless the government takes decisive action to contain and undo the damage. |
| Abstractor: |
As Provided |
| Entry Date: |
2026 |
| Accession Number: |
ED680371 |
| Database: |
ERIC |