DePaul & Loyola Accused of Steering Low-Income Families Toward Risky Parent PLUS Loans

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A new report by the progressive think tank New America accuses DePaul University and Loyola University Chicago, along with 39 other institutions nationwide, of steering low-income families toward substantial Parent PLUS loans while offering more favorable financial aid packages to wealthier students. This practice raises concerns about a potential 'subprime PLUS loan crisis' as families take on debt they may be unable to repay.

Why it matters

Parent PLUS loans have higher interest rates and fees compared to traditional federal student loans, making them a riskier option for low-income families. The report suggests universities may be incentivized to prioritize merit-based aid for affluent students, leaving lower-income families to rely on these burdensome loans.

The details

The report found that over 32,000 families with Pell Grant recipients at the 41 universities analyzed carried a median debt load of nearly $30,000, sometimes exceeding their annual income. At Loyola University Chicago, approximately 48% of Parent PLUS loan borrowers were parents of Pell Grant recipients, with an average debt of around $46,446. At DePaul University, 53% of PLUS loan borrowers were parents of Pell Grant recipients, owing an average of $33,000.

• The New America report was released on February 14, 2026.

What they’re saying

What’s next

The report is likely to spur increased scrutiny of university financial aid practices from policymakers, consumer advocacy groups, and the media. There may be calls for stricter regulations on Parent PLUS loans, including tighter eligibility requirements or limits on borrowing amounts. Universities may also face pressure to increase grant aid for low-income students and reduce their reliance on Parent PLUS loans.