Universities: Study on parent loan debt accurate but incomplete

A recent Wall Street Journal report that examines the level of debt parents take on to give their kids a college education paints an incomplete picture, according to officials from some of the Connecticut higher education institutions that find themselves toward the top of the list.

“It is one piece of the puzzle,” said Julie Savino, executive director of University Financial Assistance at Sacred Heart University in Fairfield.

For some families, Savino said, a low-interest Parent Plus loan represents a smart thing to do, particularly for those who haven’t saved a lot and don’t want to pass a lot of debt onto their kids.

The Wall Street Journal report looked at newly released data from the U.S. Department of Education that for the first time singled out the level of debt parents took on through a federal college loan program called the Parent Plus program. Then it ranked schools based on the size of debt burdens and also looked at the amount of debt low-income parents assume.

Previous reports focused on debt assumed by students, not their parents.

This analysis looked at “pooled cohorts” of the 2017-18 and 201819 academic years at predominantly bachelor’s degree granting institutions. It found at more than 500 colleges, the median total amount borrowed by parents to help pay their child’s tuition ranged between $25,000 and $50,000.

At one institution, Spelman College in Georgia, the average parent who took out Parent Plus loans borrowed an average of $112,127 to pay for their child’s schooling.

In all, five Connecticut schools — all private — made it into the top 101 of the 1,305 colleges ranked. They include Quinnipiac University in Hamden, University of New Haven in West Haven, Sacred Heart University in Fairfield, Fairfield University and the University of Hartford.

The report ranked Quinnipac 12th nationwide. There, the average Parent Plus loan debt was $78,439, with low-income parents borrowing an average of $47,500.

John Morgan, an associate vice president for public relations at Quinnipiac, said less than 12 percent of undergraduate families take the Parent Plus loans specified in the federal data release.

“Quinnipiac provides financial aid to a majority of its students as we are always concerned about affordability and access to higher education,” Morgan said. “This study of student debt only applies to a small portion of our student body.”

Other data sources, he pointed out, show that earning a degree from Quinnipiac is one of the best long-term investments a student can make.

A 2019 Georgetown University Center on Education and the Workforce study ranked Quinnipiac in the top 3 percent for long-term return on investment and among the top 100 institutions in the U.S. for its graduates’ median 10-year earnings after graduation, Morgan said.

The University of New Haven ranked 66th on the list, with the average parent debt at $57,138. For low-income parents, the average loan debt was $32,814.

At UNH, Greg Eichhorn, associate vice president for enrollment, said the university is always concerned with the cost of higher education and potential debt burden for students and families.

“The University is one of the lowest net cost private institutions in the state with more than 95 percent of our students receiving assistance from the school,” Eichhorn said. “We are constantly trying to control costs while providing an outstanding education that prepares our students for life after college, whether it be graduate school or into the workforce.”

Eichhorn pointed out that New Haven recently placed 17 on a Princeton Review ranking of career placement.

“Both our undergraduate and graduate students have over a 94 percent career placement rate,” Eichhorn said. In other words, families will have the means to pay the loans back.

Sacred Heart University ranked 69th, with parents taking out an average Parent Plus loan of $56,710. Low-income parents took out an average of $31,747.

Savino doesn’t doubt that the information is accurate, but said it leaves out that more than one third of students at Sacred Heart leave debt free because their parents foot the bill, not only through loans but in other ways.

“Sacred Heart always recommend that families hatch a plan that avoids loans from the start,” Savino said. “And to evaluate what is available to them. Decisions to borrow are pretty complex.”

Savino said for many parents, the Plus program is an inexpensive loan that allows their child to pursue lucrative careers, such as nursing, where some are getting signing bonuses.

“What is wrong with that?” Savino said.

At Fairfield University, parents take out an average of $55,000 in Parent Plus loans. The low-income debt was $36,942. That puts Fairfield 85th on the list of 1,305.

Jennifer Anderson, vice president for marketing and communications at Fairfield, said families finance their education in a variety of ways.

“Fairfield University has continued to increase its need-based financial aid budget each year,” Anderson said. “The data shows that a Fairfield education has a strong return on investment.”

She, too, referenced the Georgetown University’s workforce study that found 98 percent of recent Fairfield grads secure full-time employment, placement in a graduate or professional school or are participating in a volunteer service program within six months after graduating.