By Laurel White
A new research project from a School of Education faculty member aims to shed more light on a widely-used loan parents take out on behalf of college students. The federal loan, called a Parent PLUS loan, has virtually no borrowing limit and is most often utilized by Black, Latinx, and low-income families.
Taylor Odle, an assistant professor in the Department of Educational Policy Studies, recently received a two-year grant to study Parent PLUS loans in the United States. While previous research has shown these loans are most often utilized by minority and low-income families, no prior work has illuminated students’ or families’ outcomes or what types of institutions most commonly rely on funding from PLUS loans. Odle’s work aims to fill that knowledge gap.
“Policymakers, advocates, and researchers alike need more information on the characteristics and outcomes of students whose parents borrow PLUS loans, as well as what institutions are most reliant on PLUS loans, how students and families navigate the borrowing and repayment process, and how current financial aid practice provides families with information and guidance on PLUS loans,” Odle says.
According to the College Board, a national nonprofit focused on educational testing and research, the average Parent PLUS loan for an undergraduate student in 2021-22 was $19,060. In contrast, annual borrowing limits for federal Direct Subsidized and Unsubsidized loans range from just $5,500 to $7,500.
Odle, along with research partners at Howard University and the University of Michigan, will use federal data, focus groups, and interviews to uncover how institutions communicate about Parent PLUS loans, who takes out the loans, and what outcomes are for borrowers. Their work will also examine how institutional financial aid administrators discuss and package PLUS loans.
Odle says the project aims to produce insights for federal policymakers, create better informed consumers, and provide a foundation for future research through both public-facing documents and academic publications.
“Insights from this project will build a foundation to not only study whether the program ‘works,’ but also who it does or does not work for,” he says.
Odle is the principal investigator on the project. His co-principal investigators are Jorge Burmicky, an assistant professor of higher education leadership and policy studies at Howard University, and Jeremy Wright-Kim, an assistant professor in the Center for the Study of Higher and Postsecondary Education at the University of Michigan.
Another UW–Madison School of Education faculty member, Nick Hillman, a professor in the Department of Educational Leadership and Policy Analysis, is one the project’s three advisory board members.
The project is funded by the Arnold Foundation, a philanthropic organization that funds a variety of policy-related research. It is expected to run through 2025.