What to Know About Parent PLUS Loans: 5 Startling Statistics

Parent PLUS loans were initially introduced as a way to help upper-middle-class families cover their expected family contribution (EFC). However, as the program grew, it was increasingly utilized by a large number of lower-income families who needed additional assistance in paying for their children to go to college.

As a result, many families have been left with significant debt and little means to pay it back. Over the last decade, the total outstanding debt for these loans has surged more than three times faster than the number of borrowers.^{Note Reference [1]}

In this report, we cover five startling statistics about Parent PLUS loans and the loophole that help borrowers with their repayment.

Recent data from the Department of Education (ED) reveals that as of Q4 2023, 3.8 million people in the U.S. were Parent PLUS loan borrowers.^{Note Reference [1]} Over the last five years, the number of borrowers has increased by about 200,000 or 5.5%.

In 2014, the total outstanding balance on Parent PLUS loans was $65.1 billion.^{Note Reference [1]} By the end of 2023, that debt had increased by 72.3% to $112.2 billion.

During that same period, however, the number of Parent PLUS loan borrowers only increased by just under 19%, from 3.2 million to 3.8 million.

Parent PLUS loan debt currently accounts for 7% of the total $1.6 trillion student loan debt.

According to the most recently available data from the National Center for Education Statistics (NCES), the average loan amount for Parent PLUS loans in 2019-2020 was $34,630. When adjusting for inflation, that’s $37,970 in 2021-2022 constant dollars.^{Note Reference [2]}

Since 1999-2000, the average loan amount for Parent PLUS loans has increased by 174%.^{Note Reference [2]}

During the 2019-2020 academic year, 25.9% of Black students pursuing a bachelor’s degree had a parent take out a Parent PLUS loan to help fund their education.^{Note Reference [2]} By comparison, only about one-tenth of white (12.6%) and Hispanic students (11.3%) and just 7% of Asian students during that year had a parent do the same.

In addition to being most likely to borrow Parent PLUS loans, Black families are disproportionately impacted by these loans and student debt as a whole.

In 2020, more than half of all Black families in the U.S. (55%) had an expected family contribution (EFC) of zero, meaning they had no available funds to contribute to their child’s education as calculated by the ED.^{Note Reference [3]}

During that same academic year, the average Parent PLUS loan amount borrowed by Black families for students pursuing bachelor’s degrees was $33,440.^{Note Reference [2]} Black families’ average income that year, however, was only $54,500, meaning the average PLUS loan was about 61% of average income.^[5]

Data from more than 2,000 institutions reveals that as of 2021, an average of 12.7% of Parent PLUS loan borrowers have defaulted on their loan just four years after their child completed their degree.^{Note Reference [4]}

Despite this average, default rates vary greatly from one school to another, and more than 4,000 other schools throughout the nation have not provided recent data on default rates for these loans.