Author: Adam Looney and Vivien Lee
Source: The Brookings Institution
A new Brookings report discusses trends among parents who take out Parent PLUS loans, a program launched in 1980 that allows parents to borrow the amount required for their children to attend college after deducting student aid. In 2018, 3.4 million Parent PLUS borrowers owed $87 billion, or 6 percent of federal student loans.
The report’s key findings include:
- The average annual amount for parent borrowers has tripled over the last 25 years, reaching $16,100 in 2014. Of parents entering repayment on their last loan in 2014, 8.8 percent owed more than $100,000, compared to 0.4 percent in 2000.
- Default rates have increased from 7 percent in 2000 to 11 percent in 2009. For borrowers at for-profit institutions, the five-year default rate in 1999 was 11.5 percent and 16.3 percent in 2009.
- Parental repayment outcomes vary across institutions and are lower than the repayment rates of undergraduate student borrowers. For-profit institutions account for 55 percent of institutions in the bottom 10 percent of repayment.
To read the full report, visit the Brookings website.