500 Education, Training, Employment & Social Services:Eliminate the PLUS Loan Program

Rationale:

Part B of Title IV of the Higher Education Act authorizes federal PLUS loans. The $21 billion PLUS loan program provides federal loans to graduate students and the parents of undergraduate students. Parents of undergraduate students are able to borrow up to the cost of attendance at a given college. During the 2011–2012 academic year, the PLUS loan program provided 879,000 parents of undergraduate students with an average of $12,575. There is no limit (either in number of years or aggregate dollars) on how much a parent can borrow, and the loans are available in addition to federal loans that are already available to the students themselves. The availability of Parent PLUS loans, created in 1980, has resulted in families incurring substantial debt, while failing to ease the cost of college over time. The Parent PLUS loan should be terminated.

Similarly, the Graduate PLUS loan program, open to graduate students who take out loans to finance graduate school, enables students to borrow up to the full cost of attendance. A graduate student may borrow up to the cost of attendance at a given school, less any other aid received. During the 2011–2012 academic year, the PLUS loan program provided 360,000 graduate students with an average loan of $19,958. ((National Association of Student Financial Aid Administrators, “National Student Aid Profile: Overview of 2013 Federal Programs,” 2013, (accessed December 12, 2014).)) Undergraduate and graduate students already have access to up to $138,500 in federal loans through the Stafford Loan program, and students enrolled in school to become health care professionals can borrow up to $224,000. Borrowing above those already high amounts should not be encouraged, and the Grad PLUS program should be eliminated.