The schools which leave parents the most indebted are not in the Ivy League universities but rather small private institutions and historically Black colleges, a Wall Street Journal analysis found.
The US Department of Education released its revamped college financial data for the year, revealing the sky-high levels of debt that are leaving parents on the hook.
While student loan debt has snowballed into a major problem, intergenerational debt is also leaving many families in the red. The Parent Plus federal loan program that issues loans directly to parents is now proving to be burdensome. At some colleges, parents are taking on six-figure loans to pay for their children’s tuition and rent.
Data’s Key Findings
According to Education Department data, at nearly 150 colleges, parents of graduate students took out loans totalling at least $50,000, while at over 500 schools, the overall amount was between $25,000 and $50,000.
Spelman College, a historically Black school in Atlanta, topped the list. Parents of graduates from Spelman borrowed an average of $112,000.
Ringling College of Art and Design, a private college in Florida, came in second with a median debt of $99,800 in Parent Plus loans while Berklee College of Music, a Boston-based private college, came third with a median loan debt worth $97,511.
In addition to private schools, some public colleges and universities, like the University of Alabama, have an average parent debt well above $50,000.
During his campaign, President-elect Joe Biden proposed loan repayment exemptions for families earning less than $25,000 annually. However, he hasn’t commented on federal programs like Parent Plus.
Footing the bill for some of these premium colleges is crushing some poor and middle-income parents. Although some world-famous schools, such as Princeton and Brown, waive tuition, room, and board for low and middle-income families, others like New York University show alarming figures. Parents of New York University graduates borrowed an average of $74,000 in Parent Plus loans — one of the highest in the country.
Since federal loans are burying families in loan debts, there has also been a steady rise in loan defaults. However, the analysis shows that although parents have taken on a greater share of their children’s college costs during the last few decades they are less likely to default on federal loans compared to their children.