Worse Than a Last Resort? Estimating the Effects of Parent PLUS Loans on Student Success

• In Event: The Pitfalls and Promise of Student Financial Aid

Abstract

Though Parent PLUS Loans (PPLs) comprised 12 percent of all borrowing in 2017-18, they have been largely been overlooked by existing research. Leveraging data on nearly 17,000 postsecondary students, we identify student, parent, and institutional factors associated with PPL borrowing and estimate causal effects of PPLs on students’ retention and persistence. Using complementary logit and linear probability models—and propensity-score weighting techniques derived from machine learning and generalized boosting—we produce doubly-robust estimates to suggest PPL borrowing is associated with significant reductions in student outcomes. Additionally, we find PPL students have lower educational expectations and high-school GPAs and higher cumulative loan balances than non-PLL peers. This study extends prior literature and identifies important policy implications.

Authors

• Adam K. Edgerton, Learning Policy Institute

• Taylor K. Odle, University of Pennsylvania