The Federal PLUS loan program was established in 1981. Approximately one of every four parents with children in college borrows to pay higher-education expenses.
Some parents use more than one source of credit to pay college costs.
The USA Group analysis disclosed that slightly more than half of the PLUS borrowers had taken out two or more PLUS loans within three years of their first PLUS loan. Default rates on PLUS loans historically have been lower than the default rates on Stafford loans for students. U.S. Department of Education budget data project a default rate of approximately 10 percent over the life of PLUS loans issued in fiscal 1999. For comparison, the default rate projection for Stafford loans issued during the same year is nearly 16 percent for unsubsidized Stafford loans and nearly 17 percent for subsidized Stafford loans. Parents typically have more experience managing debt and more extensive financial resources than recent college graduates.