Making the List

Until the start of this decade, it was not possible to detect whether specific colleges and universities were pressuring low-income families to take out Parent PLUS loans. That’s because there were no school-by-school data available indicating which parents were borrowing PLUS loans to send their children to those institutions.

We did know, however, that many colleges downplay the risks that low-income families can expect when they borrow PLUS loans. A significant share of colleges engage in the deceptive act of packaging PLUS loans in the financial aid offers they make to prospective students, often in the exact amount of their funding gaps.¹ As ProPublica and The Chronicle of Higher Education wrote in a joint 2012 article on Parent PLUS loans, “That can make it look like a family won’t have to pay anything at all for college, at least until they read the fine print.”² In addition, many schools omit key details about PLUS loans in their award letters, keeping students and their families in the dark about the potential hazards of using them. Borrowers often have buyer’s remorse and complain that their children’s colleges kept them in the dark.³

There have also been alarming trends in the national data available on Parent PLUS loan borrowing. In 2018, New America’s Rachel Fishman released an eye-opening report showing that low-income families—and particularly those of color—were increasingly taking out Parent PLUS loans.⁴ Fishman explained how discriminatory federal housing and lending policies had prevented most Black families from building wealth, forcing them to be more reliant on debt financing for college than white families. “Given the enormous collection powers of the federal government, the Parent PLUS loan program is becoming predatory for Black PLUS borrowers who are more likely to be low-income and low-wealth, and who will likely to struggle to repay,” she wrote.⁵

Other reports show that these problems are getting only worse. A 2022 paper from Georgetown University Law School’s Center on Poverty and Inequality found that the share of students whose families annually earned under $30,000 and borrowed PLUS loans grew from fewer than one in 10 in 2008 to one in five in 2018. The increase was sharpest for low-income Black students. The share of Black students whose families had annual incomes of less than $30,000 and borrowed PLUS loans “nearly tripled,” from 18 percent to a shocking 44 percent.⁶

The picture became clearer in January 2021, when the U.S. Department of Education added institution-by-institution PLUS loan borrowing and repayment data to its College Scorecard, an online consumer tool for college applicants and their families. With the changes, the Scorecard revealed the number of Parent PLUS Loan borrowers at each college or university whose children graduated or had left the institution in recent years. The Scorecard also broke down the data to show how many of those borrowers were the parents of Pell recipients. In addition, the Scorecard disclosed the median amount of Parent PLUS loan debt these low- and lower-middle-income families took out.

To compile the list of 41 public and private universities highlighted in this report, I analyzed the College Scorecard data, and I included only those schools at which the families of Pell Grant recipients made up at least one-third of PLUS loan borrowers and borrowed a median amount of $15,000 or more. Collectively, at the 41 schools, 45 percent of the borrowers were the parents of Pell recipients, and they borrowed a median amount of $29,102.

Because I was looking for universities that are big players in enrollment management, I examined more than 20 years of institutional financial aid data at more than 300 selective colleges and universities. These data are included in an annual survey that the college guidebook publisher Peterson’s conducts of colleges and universities. Colleges report these data in their Common Data Sets, and Peterson’s aggregates them for subscribers. I also examined the average net-price-by-income data that colleges have reported annually to the Department of Education’s Integrated Postsecondary Education Data System (IPEDS) since 2008. These data indicate the funding gaps that low-income students and their families face at these institutions. To be included on the list, the universities had to have charged the lowest-income families an average net price of $12,000 or more, after all grant and scholarship aid was awarded. To see all of the data that I took into consideration when determining that these 41 universities should be on the list, see the appendix.

Here’s how the 41 schools measure up in terms of how much they spend on institutional aid, meet financial need, and charge the lowest-income families:

• Amount of non-need-based aid: The median amount of non-need-based aid the 41 universities awarded in 2023 was about $50 million.
• Share of freshmen receiving non-need-based aid and median amount of non-need-based aid award they received: At the 41 institutions, the median share of freshmen receiving non-need-based aid was 28 percent and they received a median amount of nearly $15,000 each.
• Percentage of financial need met: The median share of financial need that the 41 universities met of their freshmen financial recipients was just 74 percent.
• Average net price the lowest-income freshmen pay: After all grants and scholarships were considered, these universities charged freshmen from families with annual incomes of $30,000 or less a median average net price of about $18,000.

Some readers may take comfort that this report identifies only 41 universities that appear to be steering low-income families to PLUS loans as part of their financial aid leveraging efforts. However, the list does not aim to identify all colleges that are pushing low-income families to borrow PLUS loans. This list, for example, does not include historically Black colleges and universities (HBCUs), which are heavily reliant on PLUS loans to help their students’ parents pay for college. These institutions have been historically underfunded and, compared to the universities on this list, have much less money to devote to financial aid. The omission of HBCUs is not meant to excuse these schools for burdening their students’ families with risky loans. But they are not pushing their students’ parents to borrow PLUS loans to try to rise to the top of the U.S. News rankings.

The list also does not include art schools, which tend to be the country’s most expensive colleges because they require students to buy expensive tools and supplies.⁷ While these institutions are highly competitive, they are niche, and not representative of higher education as a whole.

And I was conservative in compiling the list, including only universities that appear to be leveraging a great deal of their aid. It is likely that a lengthier investigation would reveal other schools that put low-income students’ families in financial jeopardy as well.