Compare the average Parent PLUS loan received in the 2015-2016 award year, the percentage of parents who borrowed and other important financial data on a school-by-school basis in this table, based on New America's Education Policy Program analysis of data from the Department of Education. Institutions with fewer than 100 Parent PLUS loan borrowers in the 2015-2016 school year are not included. Click the headers to sort the data or type a college's name into the Search bar to see how it measures up. Click the links to learn more about schools ranked by U.S. News & World Report.Note: N/A means Not Available. Graduation rates reflect those graduating within 150 percent of the normal time, typically six years. Data were gathered from the Integrated Postsecondary Education Data System, the Federal Student Aid Data Center and the College Scorecard. Some university main and branch campuses may be aggregated into a single data point, depending on how they report loan data to the Federal Student Aid Data Center..
Susannah Snider
By the Time Parents Find Out How Much College Costs, It's Already Too Late
A common criticism of the Parent PLUS program is that it desensitizes parents to the actual cost of college. Financial aid offices have an incentive to push parent loans, encouraging Mom and Pop to delay the reality of paying for college by borrowing with wild abandon.That can make pricey private universities – and even some less-expensive public institutions – appear far more affordable than they truly are for low-income or cash-strapped families. Some critics also believe the government-funded loans enable schools to keep tuition and other costs high, because they fill the gap between what the colleges themselves are willing to offer in student aid and the posted "sticker price" of attending the school. Without the loans, schools might have to fund more scholarships and grants out of their endowments or cut prices to a more affordable level. Compounding the problem, parents often don't know what share of college costs they'll be expected to pick up when school applications are due. By the time they find out – when the financial aid letters roll in – it's too late. "I find this really troubling – how it shifts all of the responsibility onto the student and family and away from the school," says Ben Miller, senior director for postsecondary education at the District of Columbia-based Center for American Progress.[See: 10 Easy Ways to Pay Off Debt.]It's also virtually impossible for parents to figure out which universities are most likely to load them up with debt. While prospective students can easily compare publicly available data on undergraduate borrowing levels and default rates at different schools through Department of Education tools like the College Scorecard and College Navigator, those consumer-friendly tools don't log parental borrowing rates. So how can families determine if the school their child wants to attend is working to keep parent borrowing in check and give their child a realistic, affordable financial aid package? To calculate how much debt parents at individual schools are being saddled with, U.S. News partnered with New America to compare the average amount borrowed by recipients of Parent PLUS loans at private and public institutions across the country. The measure, which isn't simple for the average parent to find, provides a rough gauge of how heavy the cost burden is at individual schools. [See: Should You Invest or Pay Off Debt?]Parents who send their kids to private universities – both nonprofits and for-profits – tend to borrow the highest amount in Parent PLUS loans on a per-recipient basis. Many are arts or music schools located in pricey metropolises, such as Berklee College of Music in Boston. The private arts institution topped the list, with the highest average Parent PLUS loan totals. Parents of Berklee students borrowed $35,388, on average, for the 2015-2016 school year. In other words, by graduation, the average Berklee parent borrower could take on more than $140,000 to fund their child's undergraduate degree. And that would be on top of any debt their child had taken out on his or her own. That was the experience for Lynn, a Berklee parent who asked not to reveal her last name, who borrowed more than $100,000 in PLUS loans during the three years her son studied saxophone at the music college. She had originally intended to tap home equity, but her house lost half its value during the most recent financial crisis. "I haven't begun to pay back the student loans," she says. "But it's coming, and I'm terrified of it." Lynn, who is recently retired and takes half her husband's Social Security, anticipates her payments reaching $1,500 to $1,700 per month over a 10-year repayment plan, more than twice her monthly income. Even if she began receiving her own Social Security payments, they would be eaten up by her parent loan bills, she says. "As an adult, I know that loans have to be paid back, but I was in my 60s when they allowed me to take these loans, and things have changed again for me. I was sick last year, and I stopped working."She says that she regrets sending her son to Berklee, but it was his dream to study there. "When your child is like, 'I want to go there, I've been wanting to go there since I was in third grade,' how do you say no?"Berklee declined to speak on the record to U.S. News. Other private universities on the list include New York Film Academy, a for-profit arts school with campuses in New York, Los Angeles and South Beach, Florida, Dartmouth College and New York University. The list, which didn't count schools with fewer than 100 parent borrowers, had 12 schools that posted an average Parent PLUS borrowing amount of more than $30,000 for a single year.It's not only pricey private universities that encourage parents to take on outsized debt. At the University of Alabama, the average parent loan recipient took on more than $24,000 for a single year. At Auburn University and the University of Colorado–Boulder, the average Parent PLUS loan came to nearly $23,000.At these public institutions, parents may take on high average debt for different reasons. Representatives of a number of public universities with relatively heavy parental borrowing say that it's largely due to out-of-state enrollment. The University of Oregon, for one, has battled increasing state disinvestment in higher education by encouraging nonresidents from states like California to enroll and pay higher tuition."The states have gotten out of the business of funding public universities and shifted the burden to parents and families, which has ultimately led to more loan borrowing," says Roger Thompson, vice president for student services and enrollment management at the University of Oregon, where parents borrowed $22,178, on average, to pay tuition, living expenses and other costs that totaled around $47,000 for out-of-staters in 2015-2016. Indeed, there's a stark difference between out-of-state and in-state parental borrowing at the University of Colorado–Boulder, which breaks down PLUS loans by resident status. Parents of out-of-state undergraduates from the class of 2016 who borrowed took on an average of nearly $93,000 over four years, or more than $23,000 annually, according to the school's data. Parents of in-state students who borrowed took on a more modest $41,100, or about $10,000 in each of four years.Covering college costs at a four-year university such as the University of Colorado–Boulder without parental help is nearly impossible these days, says Ofelia Morales, the university's director of financial aid. "Just student loans might be enough to cover community college, but if you're wanting to go to university, the federal lending side has just not kept up with what it actually costs to go to school now," she says. Dependent college students can typically only borrow up to between $5,500 and $7,500, depending on their grade level. For many schools, that's simply not enough to cover the cost of attendance, even after accounting for additional scholarships or work-study aid. While not all parent loan borrowing is ill-advised, problems arise when families without the means to repay these loans are encouraged to take on outsized debt, experts say. "We've kind of 'back-doored' this way into being able to finance education, especially for low-income folks, and it does put them in a very hard spot," says Persis Yu, a Boston-based staff attorney and director of the Student Loan Borrower Assistance Project at the National Consumer Law Center. Parents must choose between "making it possible for your kids to go to school and have a future or, you know, preserving your own financial future – being able to retire," she adds.[See: 8 Financial Steps to Take After Paying Off a Debt.] Financial aid officers and other university representatives reject the criticism that they benefit at the expense of their students' families. They say it isn't their job – or within their capabilities – to discourage parental borrowing. Parent PLUS loans are federal products, they point out, maintained and administered by the Department of Education; schools don't have the systems in place to evaluate an individual parent's borrowing risk, like a bank or a lender would. And they can't forbid a parent from taking a loan that the government has approved. “Like most of our peer institutions, Georgetown [University] analyzes what portion of their child's education a parent has the ability to pay, and it is up to individual families to determine if they will pay out of current earnings and assets or finance this portion,” says a spokesperson for Georgetown University, where parents who borrowed took on an average $30,789 in the 2015-2016 award year. Some counseling for parents is available, including credit counseling required for parents initially denied a PLUS loan and schools' own financial aid services. "Financial aid administrators have a responsibility to make sure they work with borrowers and answer questions and help them understand how the PLUS loan fits into the broader package," says Megan McClean Coval, vice president of public policy and federal relations for the National Association of Student Financial Aid Administrators, a nonprofit membership organization representing financial aid professionals.But she notes that the loan is ultimately a federal product that parents can take if they meet the criteria, including having no adverse credit history and meeting the enrollment requirements, no matter what a financial aid officer recommends in a counseling session. "It's not like this is a loan coming from the school," Coval adds. "It's a resource that's offered at a federal level, so if we're really going to be critical of it, we need to take a look at the programs from a federal policy perspective." Editor’s Note: This story was produced in partnership with the McGraw Center for Business Journalism at the City University of New York Graduate School of Journalism. It is the second in a series of stories exploring the high cost and financial impact of federal student loan borrowing among the parents of college undergraduates..
You need a crystal ball to know for certain whether you'll have to tap long-term health care in your old age. But for many people, the specter of pricey long-term care bills, and the burden they might place on family, is enough to make them consider buying long-term care insurance. In recent years, substantial premium hikes have earned long-term care insurance a reputation for being unaffordable. Experts say that rate increases primarily impacted older policies that were based on flawed assumptions, and consumers buying long-term care insurance today likely won't experience the same volatility. In the interim, the market has shifted and changed, with fewer providers offering traditional long-term care coverage. Curious about what you should know about long-term care insurance? Here's what to understand.What Is Long-Term Care Insurance?Long-term care insurance offers coverage for certain expenses associated with chronic health conditions, including professional help eating, bathing, dressing and using the bathroom. "It's health insurance for things you won't recover from," says Evan Beach, certified financial planner with Campbell Wealth Management in Alexandria, Virginia. Policyholders typically pay premiums on a regular basis until they pass away or need to obtain care. If they tap long-term health care, the insurance company will dole out a daily or monthly benefit amount to pay for eligible services, such as hiring a home health aide, utilizing adult daycare services or entering a nursing home. "Here's the rationale for even thinking about it," says Jesse Slome, executive director for the American Association for Long-Term Care Insurance. "If you live a long life, chances are that at some point between now and when you die, you're going to need services that are categorized as long-term care. That's typically care in your own home, or it might be in a facility like a nursing home."People often look into purchasing long-term care insurance policies when they're in their 50s or early 60s and still relatively healthy. Typically, younger purchasers are more likely to qualify and can score lower rates. Why Should I Buy Long-Term Care Insurance?Long-term care insurance provides coverage for expenses associated with chronic conditions and not covered by Medicare. Those who choose to buy a long-term care insurance plan are often hoping to avoid burdening a spouse or child with the work and expense of at-home or inpatient care. They may be seeking to protect their assets or concerned that long-term care costs will pulverize their financial legacy. Experts note that discussing the potential value of long-term care insurance is especially important for women, who statistically live longer than men, potentially outliving a male spouse, and spend more time utilizing long-term health care services. It's important to note that long-term care insurance isn't the right choice for everyone. Beach says that it's a worthwhile consideration for consumers in the "doughnut hole" or "dangerous middle." Those are people who have too many assets to consider Medicaid for long-term health care needs, but not enough assets to pay for long-term care out of pocket. Other consumers may decide they're willing to bet on friends or family to take care of them physically or financially in old age. And some may choose to roll the dice, crossing their fingers that whatever illnesses they experience later in life won't be long-lasting or require extended care services. But for those who are worried about burdening a spouse or children and want to ensure that their assets aren't hoovered up by pricey long-term care costs, long-term care insurance is an option. How Do I Buy Long-Term Care Insurance?Here's where it's starting to get a little tricky. Fewer insurers offer traditional long-term care coverage these days, experts say. And you want to make sure you truly understand the policy fine print, including cost of living adjustments, elimination periods, application guidelines, shared care options and other details before you sign on the dotted line. Shoppers can look to purchase a policy through an insurance broker – Slome suggests choosing one who's knowledgeable about the long-term care insurance market – or via an individual insurance company. Experts note that there are fewer insurance companies selling long-term care insurance products now than there were a decade ago. Some major companies selling long-term care insurance products include Genworth, Northwestern Mutual and New York Life. Your employer may also offer long-term care insurance, which is underwritten on a group basis, as an employee benefit. It can be slightly less costly than individual coverage to the employee and may extend to other family members. The process for applying and being approved for long-term care insurance will vary depending on the type of policy. But for traditional long-term care policies, "you can't tap it unless a doctor gives the OK," says Les Masterson, managing editor for Insurance.com, Insure.com and CarInsurance.com. Applicants for a traditional policy should be prepared to undergo a health screening, including a physical exam, blood, urine and memory tests, Beach says. If you're already experiencing problems bathing, walking, performing daily errands or are battling certain chronic health conditions, chances are good you won't be approved and will find it difficult to get the green light in the future. "If you apply and get declined, it goes into a database and you have to disclose it," Beach says. Another option is to shop hybrid long-term care policies. It's increasingly common to see insurers package a long-term care rider with a permanent life insurance plan, which allows you to use the death benefit for long-term care needs. Or it may be packaged as a long-term care annuity. The function and approval process for these types of hybrid products is different than for traditional long-term care insurance, so make sure you research the differences. What Strategies Can I Use to Reduce My Long-Term Care Insurance Premiums?Long-term care insurance has a reputation for being expensive, and it's deserved. According to data provided by the American Association for Long-Term Care Insurance, a single woman at age 55 could pay $2,700 as a 2019 annual premium for a pool of benefits initially worth $164,000. Over the long haul, she could pay five figures' worth of premiums for a policy she may never need to tap.It's a gamble that makes some people nervous. If the price itself has you turned off, know that there are strategies for reducing the cost of long-term care insurance. Consumers should shop around and compare prices from several different insurers to get the best deal. They should also start discussing the potential need for long-term care insurance while they're relatively young. Applying when you're healthy can reduce your premiums. Consider reducing your benefit, including daily limits, lifetime benefits and cost of living adjustments, to receive less expensive coverage. Don't forget that you may have access to a pension, home equity and other assets that can help cover the cost of long-term care, so you don't necessarily need the plan to cover 100% of expenses. "I will go to my grave saying some coverage is better than none," Slome says..
Your debt-to-income ratio is an important metric when it comes to determining whether you qualify for certain types of loans. It's typically associated with mortgage loans, but lenders may use it to determine eligibility for auto loans, personal loans or other types of credit.It's one of those key financial metrics that lenders use to evaluate you as a credit risk, so understanding what it is, how it relates to creditworthiness and how to improve it is essential. [Read: 10 Easy Ways to Pay Off Debt.] If you're considering taking on a loan, you might have these questions about debt-to-income ratio:How is debt-to-income ratio calculated?What is a good debt-to-income ratio?How does debt-to-income ratio relate to my credit score?How can I improve my debt-to-income ratio?Why is debt-to-income ratio important?Read on for the answers to each of these questions.How Is Debt-to-Income Ratio Calculated?To calculate this financial figure, lenders divide your monthly debt payments into your gross income (what you earn before taxes and other deductions). For example, if you owe $1,000 per month in mortgage payments, $500 per month in auto loan payments and $500 per month in credit card payments and other debts, then your total debt is $2,000. If you earn $5,000 in gross income per month, your debt-to-income ratio would be $2,000/$5,000, or 40 percent. Lenders often accumulate the data used to calculate the ratio when you submit a loan application, which may require everything from pay stubs to tax returns and bank statements, depending on the type of loan for which you are applying. Additional debt information can come from your credit report.[Read: How to Remove Yourself as a Co-Signer on a Loan.]What Is a Good Debt-to-Income Ratio?Typically, a lower debt-to-income ratio is preferable because it demonstrates that you have sufficient income to repay outstanding loans. One important figure for mortgage debt is 43 percent. In most cases, 43 percent is the highest ratio a borrower can have and still get what's called a qualified mortgage, according to the Consumer Financial Protection Bureau. A qualified mortgage is a safer, more transparent loan for borrowers who are eligible. An important caveat to keep in mind: Debt-to-income ratios don't tell the whole story about a person's financial health, says Gerri Detweiler, education director for Nav, a San Mateo, California-based service that matches small-business owners to financing options. "Debt-to-income ratios can mask some pretty extensive debt," she says. For example, when determining credit card debt, lenders will include the minimum required monthly payment in your debt-to-income ratio, not the larger amount required to pay off your bill each month. How Does Debt-to-Income Ratio Relate to My Credit Score?A history of making good credit decisions and only taking on loans you can repay is smart for your debt-to-income ratio and your credit score. But beyond that, the relationship between debt-to-income and credit strength isn't always clear-cut. "The more important thing that consumers need to be aware of is debt-to-available-credit," says Bill Hardekopf, CEO of LowCards.com. That metric, sometimes called the credit utilization ratio, is a measure of how much debt you take on versus how much is available to you. It factors into the calculation of most commercial credit scores, unlike debt-to-income, and experts recommend keeping it below 30 percent. [See: 20 Financial New Year's Resolutions for 2019.]How Can I Improve My Debt-to-Income Ratio?Paying down debt or selling financed assets, such as pricey cars, will improve your debt-to-income ratio. But that strategy may have an unintended impact on your credit score, Detweiler warns. For example, say you decide to aggressively repay your car loan to improve your debt-to-income ratio. "Paying off a car loan may cause your credit to drop a little bit (because) now you don't have an open-installment loan," Detweiler says. "I would definitely talk to your mortgage professional before you make any drastic moves related to your credit."Why Is Debt-to-Income Ratio Important?While your debt-to-income ratio shouldn't be the deciding factor in what home – and in what price range – you choose, it can have an important impact on the kinds of loans you can get. And the types of loans for which you qualify, especially mortgage loans, can have a measurable effect on your lifestyle. "Good debt-to-income could mean the difference between a good school district and not-so-good," Detweiler says. "It can matter a great deal to not just what you can afford, but your quality of life.".
For many families, the cost of day care and other child care services swallows up entire paychecks, blows up budgets and makes it difficult to save for other financial goals. These days, child care costs frequently outpace mortgage and food bills, according to a 2018 report from Child Care Aware of America. In fact, the cost of child care for two children exceeds mortgage costs in 35 states and the District of Columbia. In 28 states and the District of Columbia, center-based infant care is pricier than annual tuition at a public four-year college. The high cost of child care leaves many families struggling to cobble together affordable care arrangements or worrying about whether it makes sense for two partners to stay in the job market. "It's definitely one of the most pressing issues that's facing working families with children," says Zane Mokhiber, data analyst at the Economic Policy Institute, which provides an interactive state-by-state breakdown of child care costs. So how do families afford the pricey cost of child care and day care? Here's what to know.What Does Child Care Cost?The national average cost of child care is about $9,000 to $9,600, according to the 2018 report from Child Care Aware of America. But experts note that those figures don't tell the whole story. What you'll spend on child care expenses, including infant care or day care, will vary based on where you live, the age of your child and the services you access. Families will typically pay more to place an infant in care because they require lower staff-to-child ratios, says Jessica Tercha, director of research at Child Care Aware of America. Families may also pay more for center-based child care over family child care services. In general, high cost-of-living states, such as Massachusetts, California and the District of Columbia, tend to see high child care costs as well. For example, the least affordable state for center-based toddler care was Massachusetts, with the annual cost running $18,845 per year, according to Child Care Aware. That's 65% of median single-parent income and 15.5% of married-couple median income. Child care becomes unaffordable if it costs more than 7% of a family's income, according to the U.S. Department of Health and Human Services.And, experts note, that while day care and infant care are expensive for families, child care workers are also struggling to make ends meet. "Child care is unaffordable for families, but child care providers are a lot of times just barely getting by," Tercha says. So expecting providers to accept lower pay is often not a popular solution. Instead, families have to learn how to budget carefully, take advantage of federal and state subsidies and tap their networks. It isn't easy, but it can make a difference to their out-of-pocket costs. How Can I Reduce the Cost of Child Care?Families struggling to afford the cost of child care should look to tap federal, state and employer-based benefits, experts say. Here are some resources for reducing the cost of child care: Federal and state tax credits. Employee benefits. Child care subsidy programs. Your personal network.Federal and state tax credits. Tax credits can take a bite out of your day care bills, as long as you can wait until tax season to reclaim some of the money spent on child care. Some tax credits may not be tied to paying for child care exclusively but can still be used to reduce those expenses. The child and dependent care tax credit is available to families who paid care expenses for an eligible child or adult. The credit amount is based on a percentage of your adjusted gross income and can be no more than $3,000 for a single child or $6,000 for two or more qualifying children. It is a nonrefundable credit, meaning it can bring your taxes to $0 but can't trigger a tax refund. The child tax credit is for eligible families and worth up to $2,000 per qualifying child. A portion of the credit is refundable, and it begins to phase out, or lose value, for families making above a certain modified adjusted gross income. The earned income tax credit can also reduce taxes for eligible moderate- and low-income families, with larger credit amounts available to larger families.Your state may offer tax credits to complement these federal offerings, so make sure you look into claiming any of your local tax credits as well. Employee benefits. Check with your employer to determine whether there are employee benefits parents can utilize. "I always remind clients to revisit this during open enrollment and take advantage of flexible saving accounts," wrote Marguerita M. Cheng, certified financial planner and co-founder of Blue Ocean Global Wealth in Gaithersburg, Maryland, in an email.A dependent care flexible spending account allows parents to save up to $5,000 in pretax money to cover child care, including day care, nannies and infant care, for a dependent younger than age 13. Your employer may also offer access to child care services or flexible work arrangements, such as a work-from-home day per week in order to help defray child care costs. When her kids were young, Cheng managed to arrange a late start in order to avoid paying for before-school care. Child care subsidy programs. You may be able to find assistance via the Child Care and Development Block Grant through which the federal government offers grants to states to provide for child care subsidies or vouchers to low-income families. Reach out to your local or state child care resource agency to investigate your options, Tercha says. The child care and development block grant is "not a perfect program, but it does make a real difference for families who are able to receive it," says Karen Schulman, child care and early learning research director at the National Women's Law Center. She notes that some states are more generous than others, and you may have to sit on a waiting list, even if you're eligible. So look into whether you qualify to receive this subsidy early in your child care search. Your personal network. If you're fortunate enough to live near friends and family, consider taking advantage of their help to reduce the cost of child care services. Can you engage in a nanny share with a neighbor? Is there a nearby parent or sibling willing to help watch your child one day per week? "I would say to start looking early, ask for referrals. If you don't have family in the area, consider helping a neighbor out," Cheng says. If lack of access to affordable child care has you peeved, experts recommend acting on a larger scale. Parenthood is busy, but take a moment to call your senator or speak with local representatives about policy changes public officials can enact to make access to affordable child care the norm. Being able to afford astronomical child care expenses isn't always about learning to budget better, Mokhiber says. "This is not just an issue of personal inadequacies in budgeting; it's more of a widespread problem that we think should be a significant target for public policy and investment.".