PLUS Loan In 2015, Kimara Shields faced a crucial decision when her daughter, Ashante, prepared for post-high school life. Shields, a wound care technician in Baltimore County, Maryland, was determined to send Ashante to college, recognizing its importance for her dream of becoming a teacher.
Bridging the Financial Gap
Despite their working-class income covering basic needs, the aid Ashante received for Stevenson University, a local private four-year institution, fell short. To make Ashante’s college dreams a reality, Shields took decisive action, opting for a parent PLUS loan.
The Burden of Parent PLUS Loans
Ashante successfully graduated, but Shields now grapples with a staggering $154,000 parent PLUS debt. The post-COVID resumption of federal student loan payments brings a monthly bill rivaling her mortgage, creating an unforeseen financial strain.
Parent PLUS Loans: Unveiling a Hidden Challenge
Parent PLUS loans, born in the 1980s for affluent parents, have evolved into a common choice for low-income families, particularly in communities of color. However, this financial tool, designed to bridge gaps, has become a trap for many.
Inadequate Information and Conflicting Choices
Reflecting on her decision, Shields acknowledges the lack of information surrounding parent PLUS loans. This sentiment resonates with many Black parents who, driven by the belief in the transformative power of education, find themselves in a conflicted situation.
The Accessibility Trap
Parent PLUS loans, with no income requirements and borrowing limits, are easily accessible to parents and caregivers. Critics argue that colleges, by endorsing these loans, inadvertently contribute to the inflation of tuition costs, perpetuating a cycle of increasing debt.
Advocating for Transparency and Inclusivity
Efforts to address the challenges include a college cost transparency initiative, urging colleges to distinguish parent PLUS loans in financial aid letters. However, the higher interest rates for these loans exacerbate the financial burden, prompting calls for inclusivity in new income-driven repayment plans.
The SAVE Plan Debate
The Biden administration’s SAVE Plan, while offering relief for some borrowers, has faced criticism for excluding parent PLUS borrowers. Advocates, including the NAACP, highlight the disproportionate impact on Black parents and call for adjustments to ensure inclusivity.
The Political Challenge of Reform
Parent PLUS loans are described as a “third rail” with little political appetite for reform. Despite President Biden’s promises to fix the student loan system, parent PLUS borrowers find themselves with limited recourse for forgiveness or relief.
Voices of Struggle and Hope
In the face of financial challenges, parent PLUS borrowers like Cindy Slattery express frustration with high monthly payments and limited options. While acknowledging their choices, they call for a more equitable system, better information dissemination, and reforms to address the flaws in the current student loan landscape.