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Does PLUS Push? A Multilevel Analysis of the Relationship Between PLUS Loans and Persistence for Low-Income Students Open Access

Does PLUS Push? A Multilevel Analysis of the Relationship Between PLUS Loans and Persistence for Low-Income StudentsGiven the growth of the PLUS loan program and its increasing importance in facilitating college access for many students, makes it critical to better understand the relationship between this form of federal financial aid and student outcomes. Using data from the National Postsecondary Student Aid Study (NPSAS: 12), conducted by the U.S. Department of Education’s National Center for Education Statistics, this study examined the impact receiving a PLUS loan has on persistence for low-income students. Both logistic regression and hierarchical generalized linear modeling were used to determine whether the relationship between a PLUS loan and persistence exists when moderated by family income level and the percentage of minority student enrollment (PME) at the institution. Analyses also examined the nested effects of student and institutional characteristics on persistence of PLUS borrowers. Five key findings emerged from the analyses. First, receiving a PLUS loan has no meaningful effect on persistence when compared to loans other than PLUS. Secondly, low-income students are more likely to persist than students from middle to upper incomes, even when receiving a PLUS loan. Third, PLUS borrowers were more likely to persist when all student characteristics are included in the logistic regression model. Fourth, a significant relationship between receiving a PLUS loan and the institution’s percentage of minority student enrollment was found. Lastly, significant cross level relationships were found between student’s major, undergraduate classification, parent’s highest level of education, and race, once interacted with an institutional level predictor (i.e. selectivity, tuition, control, and PME). More specifically, as the percentage of minorities attending an institution increased, the more likely a non-white student would persist.This study’s overall finding is that PLUS does not meaningfully influence student persistence when compared to other loans. This finding supports the importance of expanding financial aid counseling to parent borrowers. As college costs increase, students will continue relying more heavily on their parent’s finances to assist them in covering their unmet need. However, this study found parent borrowing does not necessarily impact student persistence. Therefore, it is critical that potential PLUS borrowers and the institutions likely to serve them, provide a thorough examination of the drawbacks and benefits of this program.

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