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

Savings in Millions of Dollars
  • 2016
  • 2017
  • 2018
  • 2019
  • 2020
  • 2021
  • 2022
  • 2023
  • 2024
  • 2025
  • 2016-2020
  • 2016-2025


Estimated costs based on fair value accounting are provided by the Congressional Budget Office on page 6 of “Fair-Value Estimates of the Cost of Selected Federal Credit Programs for 2015 to 2024,” May, 2014.


Technical Notes on Scoring

CBO Baseline

Unless otherwise noted, calculations for savings for each recommendation relies on the most recent Congressional Budget Office baseline, as found in “An Update to the Budget and Economic Outlook: 2014 to 2024,” published August 27, 2014, has been used.

Savings “Totals”

While totals for the five and 10 year savings are provided by section and for the complete set of recommendations, there are two reasons they should not be viewed as representing total savings for The Budget Book.

First, as noted in the introduction, The Heritage Foundation would recommend that the savings realized in the Function 050 Defense section would stay within the Department of Defense to strengthen the nation’s defense capabilities.

Second, the numbers cannot be deemed to represent the realized savings if every single recommendation were adopted because policy changes made in one program can impact spending levels in other programs.  Thus, the numbers in the table do not reflect any potential interactions between the various policy changes affecting spending or savings.


Heritage Recommendation:

Rein in college costs and loan debt burdening students and families by limiting borrowing. Specifically:

  • Eliminate Parent PLUS loans.
  • Eliminate Grad PLUS loans.

Under fair value accounting, this proposal costs $3 billion in 2016, and $33 billion over 10 years. This proposal is included because PLUS loans have led to higher levels of individual and family debt without easing the cost of college.


PLUS loans are plus-size. Cut them to slim down college debt.

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.

PLUS loans are plus-size. Cut them to slim down college debt.

Contributing Expert

Lindsey Burke researches and writes on federal and state education issues as the Will Skillman fellow in education policy at The Heritage Foundation. Burke focuses on two critical areas of education policy: reducing the federal role in education and empowering families with school choice.

See publications by Lindsey Burke

Lindsey BurkeWill Skillman Fellow in Education

Heritage Expert

Brittany Corona is a Research Assistant for Domestic Policy Studies with The Institute for Family, Community, and Opportunity

See publications by Brittany Corona

Brittany Corona Research Assistant

Additional Reading