DePaul, Loyola Chicago Accused of Steering Low-Income Families to Take Out Large Loans

New report claims universities offered tuition breaks to wealthier students while pushing expensive loans on lower-income families.

Published on Feb. 14, 2026

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A new report from the progressive think tank New America has accused DePaul University and Loyola University Chicago of steering low-income families toward expensive student loans, including Parent PLUS loans, while offering tuition breaks to wealthier students. The report found that over 32,000 families of Pell Grant recipients at 41 universities had a median debt load of nearly $30,000 each, close to or exceeding their yearly earnings.

Why it matters

The report warns of a "potential subprime PLUS loan crisis" and argues that the Parent PLUS loan program, originally intended to help middle and upper-middle-income families, is now being used in a way that puts lower-income families at extreme financial risk. This raises concerns about college affordability and access, especially at selective private and public universities.

The details

The report found that at Loyola University Chicago, about 48% of PLUS loan borrowers were parents of Pell Grant recipients, yet the average PLUS loan debt for those families was around $46,446. At DePaul University, 53% of PLUS loan borrowers were parents of Pell Grant recipients, with an average PLUS loan debt of around $33,000. Both universities have endowments over $900 million, suggesting they have the resources to provide more financial aid to lower-income students.

  • The report was published on February 14, 2026.

The players

New America

A progressive think tank that published the report on colleges steering low-income families toward expensive student loans.

DePaul University

A private university in Chicago that was accused in the report of steering low-income families toward expensive loans while offering tuition breaks to wealthier students.

Loyola University Chicago

A private university in Chicago that was also accused in the report of steering low-income families toward expensive loans while offering tuition breaks to wealthier students.

Stephen Burd

The author of the report published by New America.

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What’s next

The report's author, Stephen Burd, has called for reforms to the Parent PLUS loan program to better protect lower-income families from taking on unaffordable debt.

The takeaway

This report highlights the concerning practice of some selective universities, including DePaul and Loyola Chicago, of steering low-income families toward expensive loans while prioritizing tuition discounts for wealthier students. It raises questions about college affordability and access, and the need for reforms to financial aid policies to ensure equitable opportunities for students from all economic backgrounds.