I think the biggest culprit is the Parent Plus loan. A parent could be earning virtually nothing, receive welfare and be living in Section 8 housing, but as long as credit is ok, that parent could borrow hundreds of thousands on Parent Plus.
The story I told above is about a single mom who works fast food. Very modest income. Right now, she has two in college. #3 is a couple years younger. #1 is a junior and #2 is a freshman. At this point, no Plus payments are due. None of her kids got any merit and the only FA they received was Pell, WS and Stafford loans. The OOS public costs about $30k AFTER fed aid.
The mom “thinks” her kids are going to pay back these plus loans as well as their Stafford loans. Each child will have about $170k of debt upon graduation. The older son’s career goal, journalist, will likely be unbelievably modest paying upon graduation. Very likely, those Plus loans will go in arrears quickly. That suggests to me that #2 child’s education will get disrupted because mom’s Plus loans will then be in arrears. #3 child will likely be totally screwed.
I can only guess that the feds made qualifying for Plus easy (no income req’ts, no ratios, no FICO score) because there was pressure not to exclude low/modest income families from getting these loans. So short-sighted. I can’t imagine how many modest/low income parents are burdened with these loans.