Outstanding Parent PLUS loan debt is in the billions, and more than 1 in 10 borrowers are defaulting on their loans just four years after their child graduates.
By
Senior Data Reporter
Jessica Bryant is a higher education analyst and senior data reporter for BestColleges. She covers higher education trends and data, focusing on issues impacting underserved students. She has a BA in journalism and previously worked with the South Fl...
Published on February 15, 2024
Edited by
Higher Education Research Analyst
Lyss Welding is a higher education analyst and senior editor for BestColleges who specializes in translating massive data sets and finding statistics that matter to students. Lyss has worked in academic research, curriculum design, and program evalua...
•
Fact-checked by Marley Rose
Learn more about our editorial process
By
Senior Data Reporter
Jessica Bryant is a higher education analyst and senior data reporter for BestColleges. She covers higher education trends and data, focusing on issues impacting underserved students. She has a BA in journalism and previously worked with the South Fl...
Edited by
Higher Education Research Analyst
Lyss Welding is a higher education analyst and senior editor for BestColleges who specializes in translating massive data sets and finding statistics that matter to students. Lyss has worked in academic research, curriculum design, and program evalua...
•
Fact-checked by Marley Rose
Published on February 15, 2024
Learn more about our editorial process
Image Credit: kate_sept2004 / E+ / Getty Images
Data Summary
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As of Q4 2023, approximately 3.8 million Americans owe $112.2 billion in outstanding Parent PLUS loans.[1] -
This debt accounts for 7% of the total $1.6 trillion of student loan debt.Note Reference [1] -
Since 2014, the outstanding balance on Parent PLUS loans has increased by more than 72%. However, the number of borrowers has only increased by about 19%.Note Reference [1] -
During the 2019-2020 academic year, just over 1 in 4 Black families (26%) utilized Parent PLUS loans to pay for their child's education.[2] -
Black families are disproportionately impacted by this debt as more than half are unable to contribute any funds to their child's education.[3] -
As of 2021, more than 1 in 10 Parent PLUS loan borrowers was in default four years after their child graduated.[4]
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.
There are nearly 4 million Parent PLUS loan borrowers in the U.S.
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%.
Parent PLUS loan debt has increased by 72% in less than 10 years.
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.
The average Parent PLUS loan amount exceeds $30,000.
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]
1 in 4 Black families with college students use Parent PLUS loans.
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]
Nearly 13% of Parent PLUS loan borrowers default within four years of their child's graduation.
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.
Understanding the Parent PLUS Loan Loophole
Unlike other federal student loans, Parent PLUS loans are not immediately eligible for income-driven repayment plans. To qualify for income-driven repayment, Parent PLUS borrowers must consolidate their loans.
However, there is a repayment loophole that allows borrowers to establish the lowest monthly payment option possible.
Borrowers must divide their Parent PLUS loans and consolidate the loans twice, otherwise known as double consolidation. The process involves requesting two different consolidations from two different student loan servicers using the ED form.[6]
By doing so, your loans can become eligible for President Biden's Saving on a Valuable Education (SAVE) plan.
For more information, visit our resource guide to Parent PLUS loans, which lays out qualifications, further repayment information, and the pros and cons of taking out this type of loan.
- Federal Student Loan Portfolio by Loan Type. U.S. Department of Education, Federal Student Aid. Accessed January 2024. (back to footnote 1 in content ⤶)
- Table 331.95. Percentage of undergraduate degree/certificate completers who ever received loans and average cumulative amount borrowed, by degree level, selected student characteristics, and institution control: Selected academic years, 1999-2000 through 2019-20. National Center for Education Statistics (NCES). June 2023. (back to footnote 2 in content ⤶)
- Table: Expected Family Contribution by Race/Ethnicity. U.S. Department of Education, NCES, National Postsecondary Student Aid Study: 2020 Undergraduate Students (NPSAS:UG). Accessed January 2024. (back to footnote 3 in content ⤶)
- College Scorecard. U.S. Department of Education. October 2023. (back to footnote 4 in content ⤶)
- Table: Dependent Students: Parents' Average Income by Race/Ethnicity. U.S. Department of Education, NCES, National Postsecondary Student Aid Study: 2020 Undergraduate Students (NPSAS:UG). Accessed January 2024. (back to footnote 5 in content ⤶)
- Parent PLUS Loan Consolidation Loophole and 2025 Cliff. Britannica Money. Accessed January 2024. (back to footnote 6 in content ⤶)
