Parent PLUS Loans a ‘Double-Edged Sword’ for Black Families

Parent PLUS loans have become a key tool for Black Americans to access higher education but come with high costs for borrowers, creating a “double-edged sword” for families, a new report argues. Parent PLUS loans, which are uncapped, require a credit check and come with higher interest rates, are increasingly used by parents with low incomes and low wealth to pay for college and to cover gaps left by financial aid. The repayment terms make the loan more difficult for low-wealth parents to pay off, the report says, saddling older Americans with debt and forcing some to put off retirement. The loans are not eligible for the more generous income-driven repayment plans.