Absolutely not true.
You’re assuming that all of these parents who are taking out these loans have children attending schools that “meet need.” Absolutely not the case, and more likely, not the case in most instances.
Most schools don’t meet need. Most schools gap, particularly state schools, mid/low level private schools and OOS public schools.
There are many families with EFCs that are between 0 and $20k who’ve been given lousy aid pkgs with $30k-60k gaps.
All one has to do is watch threads on College Confidential or in Facebook parents groups. There are plenty of low/modest parents borrowing huge amounts so that their child can go to their “dream school.”
Do you know how many threads we’ve seen in the past where a low/modest income parent takes on huge Plus loans so that their child can go to NYU???
Personally, I know a modest income single mom with 2 kids attending an OOS flagship. The only FA they’re getting are Pell Grants and federal loans. She’s taken out Plus loans for both kids. It makes me sad and physically ill that, so far, she has over $150k in Plus loans and her second child is only a freshman! She will easily end up with over $200k in debt. She is “opting to break the bank” even though her kids aren’t getting aid EVEN THOUGH her EFC is low enough to qualify.