Parent PLUS Loans are the Real Nightmare for Some Parents with Children in College

Aaron Greene and his mother Di-Anne. (Photo: Ebony Curry and Yuru Zhu, Medill News Service)

ATLANTA – While Aaron Greene was packing to head back to Clark Atlanta University for his junior year, he stumbled upon a college bill at his mother’s house in Stone Mountain, Georgia. The number was so large that he figured it had to be a phone number.

“I know my mother is not paying this much money for school,” he said. “We don’t have that.”

Though his mother, Di-Anne, already had $40,000 in student loans from her own graduate school education, she has taken out $42,000 in Parent PLUS Loans for Aaron – and she had kept him in the dark about the cost.

“I didn’t want to give him the pressure of starting out in college, worrying about grades as well as the finances,” she said. “But I probably should have (told him) so that he could get a better understanding of the sacrifice that’s been made.”

Parent borrowing is a sacrifice many black parents make to pay for their children’s college education, and it is especially prevalent among families whose children attend historically black colleges and universities. The federal government’s Parent PLUS program helps make attending college a reality, closing the gap between the cost of college and what the student receives in grants and other loans.

Though it may sound like a lifeline, the Parent PLUS Loan program can cause economic complications for families.

Six-figure debts

The loan program was introduced in the 1980s as a way for middle- and upper-income parents to help their children pay for college while keeping their assets liquid. It has since become more popular among lower-income parents. That’s possible because the program does not check the ability to repay, considering only the borrower’s credit history.

When parents borrow, the debt can weigh down families for generations. But the burden falls particularly hard on low-income black families.

Few white families with low incomes take out the loan – just 10% of white Parent PLUS borrowers earn $30,000 or less. Comparatively, 40% of black Parent PLUS borrowers have incomes that low.

Atlanta colleges illustrate this dichotomy of borrowing.

Parents of students at three of the city’s historically black colleges – Clark Atlanta University, Morehouse College and Spelman College – combined took out more than $102 million in Parent PLUS Loans in 2018. Meanwhile, parents of students at majority-white Emory University – which has nearly the same number of students as those three historically black colleges and universities together – borrowed only $7 million in Parent PLUS Loans that year.

Parents borrowing for their children’s education isn’t new. The program has existed long enough for families to see one of the consequences of taking out large loans: generations of overlapping debt.

In Texas, Prairie View A&M University graduate Tania White needed her mother to take out Parent PLUS Loans for her undergraduate education 30 years ago. White’s mother borrowed $12,000 for White’s three years of college. She is still paying it back. Since White’s graduation in 1992, her mother’s debt has accrued to more than $100,000. White said the interest rate on Evans’ $100,000 debt is about 9%.

“You know how something is so outrageous where you have no expression or feeling behind it? That’s where we are with that,” White said, remarking that paying back student debt has become a routine for her family.

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SOURCE: USA Today, Ariana Puzzo and Kelly Rissman