Parents are shouldering a lot of the burden amid the student loan debt crisis, and a new report reveals which schools have left the highest number of indebted parents.
The report by the Texas Public Policy Foundation — which uses new data released by the Department of Education (ED)’s College Scorecard to examine typical college Parent PLUS loan debt — contributes to a burgeoning trend of transparency that’s aimed at scrutinizing the cost of tuition.
Parent PLUS loans are “almost like the neglected stepchild of higher education in terms of loan programs,” Andrew Gillen, senior policy analyst at the Texas Public Policy Foundation, told Yahoo Finance. “Everybody knew it existed, but there was never any data on it, so nobody ever talked about it.”
According to Gillen, parents of dependent undergraduate students can take out Parent PLUS loans from the U.S. government if they meet “minimal credit requirements.” There is no cap on how much parents can borrow, so a parent can borrow up to the full cost of attendance a college lists.
The median amount parents borrowed overall was $23,415. The median monthly payment for PLUS borrowers was $252.
College programs with the highest level of PLUS borrowing
The report included a list of schools that left parents with the highest levels of student loan debt.
The top school which left students with the highest median parent PLUS loan balance was Spelman College, a historically black liberal arts college for women based out of Atlanta. Thirty parents borrowed a median of $121,571 for their child to study economics.
Spelman parents also borrowed the highest levels of money — 361 parents borrowed more than $115,000 for their child to attend the college.
(Yahoo Finance reached out to Spelman and other colleges mentioned in this article for comment.)
Spelman was followed by 229 parents borrowing a median of nearly $120,000 for their child to attend Embry-Riddle Aeronautical University in Daytona Beach, Fla., to study air transportation.
Third on the list was the Savannah College of Art and Design, where 20 parents borrowed roughly the same amount for their children to study architectural sciences and technology.
Some performing arts degrees also incurred high levels of debt for parents. New York University’s left 285 parents with a median of $107,000 in debt while the American Musical and Dramatic Academy saddled 236 parents with $107,000 in median debt.
The American Musical and Dramatic Academy also had the second-highest debt level for parents.
Embry-Riddle CFO Randall Howard pushed back against the characterization that his school leaves parents of graduates with heavy debt levels, explaining that the degree comes at a higher cost because students taking it also graduate with their commercial pilot’s license.
“Comparing the cost (or the debt associated with it) of obtaining a degree in Aeronautical Science (AS) and a commercial pilot’s license to just the cost of obtaining a degree in economics, psychology, political science, communication, or any other field is not a fair comparison for multiple reasons,” he stated in an email to Yahoo Finance.
Howard added that obtaining a commercial pilot’s license outside of a college program was exorbitant, and all things considered, Embry-Riddle’s price tag comes with a “high” return on investment, given the school’s “partnerships with many of the world’s leading airlines” which allow many of their graduates to secure full-time jobs as pilots “before they even graduate.”
For every five student loan borrowers, there’s a parent with student debt
According to Gillen’s analysis, parents of students at more selective four-year colleges had more PLUS loans than those at inclusive four-year colleges.
The report also stated that there is one parent PLUS borrower for every five student loan borrowers.
“The total volume of Parent PLUS loan debt is roughly 30% of the volume of student debt for this cohort,” the report said. “This indicates that relying solely on student loan debt and ignoring parent PLUS lending will undercount educational borrowing by at least 30%.”
For many parents and their children throughout their life, they’ve heard that college was the ultimate end destination, Gillen said, adding: “There’s a much greater pressure on not only the students, but also the parents to send their kids to school.”
With the PLUS program, he continued, there is an “impression that the federal government thinks it’s the parent’s responsibility to be paying for this.”
And since the amount is based on the cost of attendance instead of how much the parent can actually afford, he explained, it can create a “dangerous mentality” leading to unchecked borrowing.