Changes in Parent PLUS Borrowing and Repayment Following Shifts in Program Provisions

To help families bridge the gap between high upfront college costs and funds they have available, the Department of Education enables parents of dependent undergraduate students to borrow Parent PLUS loans to pay for college expenses. In the last decade, more families have turned to Parent PLUS loans to pay for college, and outstanding debt from these loans increased by more than 75 percent—from just over $62 billion in 2014 to nearly $110 billion in 2024. Key differences set Parent PLUS loans apart from traditional undergraduate loans. For example, parent borrowers are not subject to the annual and aggregate borrowing limits of federal student loans, face less favorable repayment terms, and are not directly eligible for loan forgiveness or most income-driven repayment plans. With parents taking on more debt each year and limited options for avoiding default and its consequences, borrowers with lower incomes may face substantial burden in repaying these loans. Certain flexibilities afforded borrowers during the pandemic, including how late and missed payments are handled, will be phased out by July 2025, raising the stakes for individuals and the program overall. Over the years, changes to the program’s credit standards have tried to balance concerns over parents taking on loans they could not repay with demands to increase the availability of PLUS loans as a way to improve access to college. The Department seeks to learn from policy changes to Parent PLUS loans to inform potential program improvement.