Parents bear much of the burden amid the student loan debt crisis, and a new report reveals which schools have left the most parents in debt.
The report by the Texas Public Policy Foundation – which uses new data released by the Department of Education (ED) College Scorecard to examine the Parent PLUS loan debt of typical colleges – contributes to an emerging trend in transparency that aims to examine scholarship fees.
Parent PLUS loans are “almost like the overlooked stepson of higher education in terms of loan programs,” Andrew Gillen, senior policy analyst at the Texas Public Policy Foundation, told Yahoo Finance. “Everyone knew it existed, but there was never any data on it, so no one ever talked about it.”
According to Gillen, parents of dependent undergraduates can take out Parent PLUS loans from the US government if they meet “minimum credit requirements.” There is no cap on the amount parents can borrow, so a parent can borrow up to the full cost of attending college.
The median amount borrowed by parents overall was $ 23,415. The median monthly payment for PLUS borrowers was $ 252.
College programs with the highest level of PLUS loan
The report included a list of schools that left parents with the highest levels of student loan debt.
The best school that left students with the highest median PLUS parent loan balance was Spelman College, a historically black liberal arts college for women based in Atlanta. Thirty parents borrowed an average of $ 121,571 for their child to study economics.
Spelman’s parents also borrowed the largest amounts of money – 361 parents borrowed more than $ 115,000 for their child to attend college.
(Yahoo Finance has contacted Spelman and other colleges mentioned in this article for comment.)
Spelman was followed by 229 parents borrowing an average of nearly $ 120,000 to have their child attend Embry-Riddle Aeronautical University in Daytona Beach, Florida, to study air travel.
Third on the list was Savannah College of Art and Design, where 20 parents borrowed roughly the same amount for their children to study architectural science and technology.
Some performing arts degrees have also resulted in high levels of debt for parents. New York University left 285 parents with a median debt of $ 107,000, while the American Musical and Dramatic Academy imposed a median debt of $ 107,000 on 236 parents.
The American Musical and Dramatic Academy also had the second highest level of parental debt.
Embry-Riddle CFO Randall Howard has objected to the claim that his school leaves parents of graduates heavily in debt, explaining that the degree comes at a higher cost because students who take it also get their degree. commercial pilot license.
“Compare the cost (or the debt associated with it) of obtaining a degree in aeronautical sciences (AS) and a commercial pilot’s license with the only cost of obtaining a degree in economics, psychology, political science, communication or any other field is not a fair comparison for multiple reasons, âhe said in an email to Yahoo Finance.
Howard added that getting a commercial pilot’s license outside of a college program was outrageous, and all things considered, Embry-Riddle’s price comes with a “high” return on investment, being given the school’s âpartnerships with many of the world’s leading airlinesâ that allow many of their graduates to secure full-time jobs as pilots âbefore they even graduateâ.
For every five student loan borrowers, there is one parent with student debt
According to Gillen’s analysis, parents of more selective four-year college students had more PLUS loans than those of inclusive four-year colleges.
The report also states that there is one parent PLUS borrower for every five student loan borrowers.
âThe total volume of debt for the Parent PLUS loan represents approximately 30% of the volume of student debt for this cohort,â the report says. “This indicates that relying solely on student loan debt and ignoring parent PLUS loans will underestimate school loans by at least 30%.”
For many parents and their children throughout their lifetimes, they have heard that college is the ultimate final destination, said Gillen, adding: âThere is much greater pressure not only on students, but also on parents to send their children to school. “
With the PLUS program, he continued, there is “the impression that the federal government thinks it is the parents’ responsibility to pay for it.”
And since the amount is based on the cost of dating instead of what the parent can actually afford, he explained, it can create a “dangerous mentality” leading to uncontrolled borrowing.