Report Alleges Chicago Universities Push High-Interest Loans on Low-Income Families

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A new report by the think tank New America claims that Loyola University and DePaul University in Chicago are among 41 colleges that appear to push lower-income families toward high-interest Parent PLUS loans, while offering expansive financial aid packages to wealthier families. The report found that some parents are pushed to take out loans that exceed their annual earnings, putting them in unaffordable debt, while upper-income families with high-achieving students are often offered scholarships on the assumption that they could be high-value donors after graduating.

Why it matters

This report highlights concerns about predatory lending practices and unequal access to higher education, with lower-income families potentially being steered toward burdensome debt while wealthier students receive more institutional aid. It raises questions about the fairness and transparency of university financial aid policies, and the impact on social mobility and economic opportunity.

The details

The report found that in 2023, the 41 universities identified spent a collective $2.4 billion of their own financial aid funds on students who did not need aid. However, more than 32,000 families of Pell Grant recipients who graduated from or left the 41 schools in the recent past were struck with Parent PLUS loans, with a median debt load of about $30,000 each. More than half of DePaul students whose parents took out the high-interest Parent PLUS loans also received Pell grants, while at Loyola the figure was just under half.

• The report was published on February 16, 2026.

What’s next

The report's findings are likely to spur further scrutiny and potential investigations into the financial aid practices of the universities named, as well as broader discussions about equity and access in higher education.