Parents borrowing to help their children continue their education is disproportionately burdening Black families and students enrolled at historically Black colleges and universities, a recent report found.
In stark contrast to past years when the federal government’s Parent PLUS Loan had become popular among lower-income parents, as a last-ditch effort to help afford education costs, the loans are now placing parents under debts that reach up to six figures, according to the Medill News Service report.
The Parent PLUS Loan, which began in the 1980s to help upper- and middle-income families pay for their children’s education while keeping their assets liquid. While not ideal for households in lower-income brackets, the Parent PLUS loan is sometimes the last remaining option for many families who want to educate their children.
The loans are also often a final attempt at covering the costs that remain after students exhaust other options.
Forty percent of Black Parent PLUS borrowers have incomes of $30,000 a year or less, compared to 10 percent of white Parent PLUS borrowers with incomes that low. As a result, the Parent PLUS Loan’s adverse effects are especially evident at HBCUs, the report found.