August 18th 2023.
Going to college is a dream come true for both students and their parents; however, the journey to get that degree is often accompanied by a hefty financial burden. Parent PLUS loans have been a common source of funding for thousands of Black college students and their guardians, as Word in Black reports. These loans provide additional support for higher education, but they can have long-term detrimental effects on Black borrowers.
Senior policy analyst at The Education Trust, Brittani Williams, recognizes that many borrowers and their parents view the loans as a means of support rather than a trap. Without these uncapped, high-interest loans, Black Americans would continue to struggle to pay for college due to the cost and insufficient financial aid.
Unfortunately, those with fewer resources such as low-income families are often the ones turning to these loans, like Sheila Spence. At first, she viewed it as a blessing, but after sending her three daughters to college, it became a “double-edged sword.” She was willing to sign anything if it meant her children could get into the dorms.
The issue is further exacerbated by the fact that, according to Inside Higher Ed, Parent PLUS loans took up, on average, 25.3 percent of a typical Black family’s income, versus 14.2 percent of a typical White family’s income during the 2015–16 academic year. Researchers from the Century Foundation found that Black and Latino parents are disproportionately taking out Parent PLUS loans. Even 20 years after being approved, data show the average borrower will still owe 37 percent of what was borrowed.
Thankfully, there may be a glimmer of hope. The Biden administration’s plan to forgive up to $20,000 in federal student loans includes Parent PLUS loans borrowers. The country awaits the Supreme Court’s decision on student loan forgiveness, which could be a game changer for many. Until then, The Education Trust has offered several recommendations such as canceling at least $50,000 of federal student loans per borrower, lowering interest rates, doubling the Pell Grant, and creating federal-state partnerships to make public college debt-free.
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