How Colleges, Wall Street, and Washington Preyed on America’s Parents
Over two million American families — most of them poor, working-class, and Black — were pushed into federal Parent PLUS student loans designed to trap them in debt for life. Their Social Security is being garnished. They cannot file for bankruptcy. This book proves it was fraud — and gives every victim the tools to fight back.
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The Problem
More than two million American families — disproportionately poor, working-class, and Black — are trapped in federal Parent PLUS student loans they can never repay. Unlike every other category of borrower in the United States, these parents cannot discharge this debt in bankruptcy. Their Social Security checks are being garnished by the same government that issued the loans. The program's design is not accidental: in 1992, Congress removed the annual borrowing cap and replaced meaningful underwriting with a near-worthless adverse-credit check, transforming Parent PLUS into an uncapped line of credit aimed at the families least able to repay it. A February 2026 report by New America senior fellow Stephen Burd identified forty-one universities systematically steering low-income families into catastrophic Parent PLUS debt while directing institutional aid to wealthier students. Credit-reporting agencies Equifax, Experian, and TransUnion billed the federal government for millions of credit checks that provided no meaningful protection to borrowers. Parents in active bankruptcy were approved. Scholarships were conditioned on loan applications. The result is $115 billion in outstanding debt carried by families who were coerced, misled, and legally abandoned.
Paragraph 2 — The Solution
The Great American Betrayal is the first book to prove — with forensic documentation, legal analysis, and eight years of original investigation — that the Parent PLUS loan program constitutes intentional fraud against America's most vulnerable families. It is both an exposé and a practical roadmap. Readers will come away with:
Why Thomas R. Borgers
Thomas R. Borgers is uniquely qualified to write this book — professionally, legally, and personally. He spent twenty-one years at JPMorgan as Head of Real Estate Lending and Structured Finance, giving him an insider's command of the lending systems that drive both mortgage and student loan markets. He served as a former certified fraud examiner for over two decades, retained as an investigator by Congress, the President, and the FDIC, and called upon as an expert witness in financial fraud cases. He served on the Financial Crisis Inquiry Commission, where he helped document the 2008 mortgage collapse — and recognized its exact structure when he encountered the Parent PLUS program years later. His investigation began personally: his wife Jeanne was coerced into a Parent PLUS loan at Saint Peter's University in Jersey City in 2015. What started as one family's fight became eight years of forensic research, fourteen documented victim cases, analysis of $115 billion in loan data, and presentations to more than thirty of America's top law firms. Borgers is seventy-six years old. His goal is to leave his salaried career behind, spend his remaining professional years as a full-time advocate for these families, and use proceeds from this book to build a nonprofit connecting Parent PLUS victims with attorneys who will represent them free of charge. He is not a bystander. He is a witness, an investigator, and a voice for two million families who have none.
This book is written for the more than two million American parents and grandparents — disproportionately Black, working-class, and low-income, ranging in age from their 40s through their 70s — who are currently trapped in federal Parent PLUS student loans they cannot repay, cannot discharge in bankruptcy, and cannot escape without legal intervention
Endorsement — Jon Oberg, Senior Expert on Department of Education Loan Programs and Federal Regulation
"There has never been a book about paying for college like this one. The author, a banker and fraud investigator with decades of high-level Wall Street and government agency experience, recounts his family's own encounter with the federal Parent PLUS loan program. He discovers a world of deception and coercion that ruins countless families financially, where regulators are not only indifferent, but complicit in blatant illegality. Identification of the perpetrators, and the stories of the victims, will surprise and shock readers. The author not only offers compelling insights, but common-sense remedies based on his long experience in banking and personal finance. Discerning readers will come away, however, with a new understanding of why fixes to this major federal program will be hard-won, if they happen at all. Any parent thinking about signing for a Parent PLUS loan should read this book first. And college administrators who think no one is on to their reckless disregard of consumer protections, must think again."
About Jon Oberg: Jon Oberg is one of the nation's foremost experts on Department of Education loan programs and federal lending regulation. A whistleblower whose cases against multiple lending institutions — brought under the False Claims Act — documented systemic abuses in the way the student loan industry and the Department of Education handled federal aid, Oberg won most of his cases, helping the federal government recover substantial sums and forcing institutions to shut down or reform their practices. He served as a senior researcher and adviser on federal student loan policy for decades. Thomas Borgers describes him as "one of the greatest minds I have ever worked with in my long career" — and Oberg's endorsement of this book represents one of the most credible voices in America on exactly the fraud it exposes.
Thomas R. Borgers spent 21 years at JPMorgan as Head of Real Estate Lending and Structured Finance, giving him an insider's command of the federal lending systems that drive both mortgage and student loan markets. He served as a former certified fraud examiner for over two decades, retained as an investigator by Congress, the President, and the FDIC, and called upon as an expert witness in financial fraud cases across the private sector.
Borgers served on the Financial Crisis Inquiry Commission, where he helped document the systemic fraud underlying the 2008 mortgage collapse — and later recognized its exact architecture rebuilt inside the federal Parent PLUS student loan program. He has spent eight years investigating that fraud: interviewing hundreds of borrowers, conducting forensic analysis of fourteen victim families across twenty-four institutions, analyzing $115 billion in outstanding loan data, and presenting his findings to more than thirty of America's top law firms.
His investigation began personally. His wife Jeanne was coerced into a Parent PLUS loan at Saint Peter's University in New Jersey while in an active Chapter 13 bankruptcy — a loan that should never have been approved under federal law. That betrayal launched the most important investigation of his career. Borgers is 76 years old. His goal is to leave his salaried career behind, spend his remaining professional years as a full-time advocate for the two million families this book serves, and use a significant portion of the proceeds from this book to build a nonprofit connecting Parent PLUS victims with attorneys who will represent them free of charge.
– ACFE Examiner of the Year Award — Washington, D.C. Chapter (2009 & 2010), for work at the U.S. Financial Crisis Inquiry Commission
– Special Act of Service Award — U.S. Financial Crisis Inquiry Commission (2010)
– Contributor To Financial Crisis Inquiry Report to Congress and the President (2011)
– Spokesperson — New York City’s most successful food campaign for the homeless and poor (2013–2014)
– Advisor — Theodore Roosevelt Association (2013–2015)
– Advisor — John Jay College of Criminal Justice, Forensic and Investigation Department (2009–2015)
– Corporate Conference Chairman — Association of Certified Fraud Examiners, New York City Chapter (2011–2014)
– Author — The Great American Betrayal: How Colleges, Wall Street, and Washington Preyed on America’s Parents (2026). Exposes a $50 billion fraud in the federal Parent PLUS loan program affecting more than two million low-income American families. Draws direct parallels to the subprime mortgage crisis of 2008 and calls for urgent legislative reform.
– Contributor — Financial Crisis Inquiry Report to Congress and the President on the Causes of the Great Financial Crisis of 2008 (FCIC, 2011). One of the most consequential financial accountability documents in U.S. history, delivered to Congress and the President by the bipartisan Financial Crisis Inquiry Commission.
– Author — “Financial Crisis Inquiry Commission is Biggest Financial Investigation Since 1930s’ Pecora Commission,” Fraud Magazine, Association of Certified Fraud Examiners. Placed the FCIC’s work in historical perspective for fraud examiners and investigators nationwide.
– Contributing Author — JP Morgan International Newsletter and other banking publications during his 21-year tenure at JP Morgan, covering real estate lending, mortgage markets, and structured finance topics for a global institutional audience.
– Media Contributor — Expert commentator and spokesperson on financial fraud, the mortgage crisis, and student loan abuse for major news organizations. Appeared on Fox News in connection with Madoff scandal victim recovery work.
- Guardians of the Land Speech by Thomas R. Borgers December 2025
- Sixty Minutes CBS Overtime Special -Behind the financial crisis: A fraud investigator talks Tom Borgers
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For eight years, I have questioned whether I was the only person who could see it — the same fraud that nearly destroyed the American economy in 2008, rebuilt piece by piece and aimed this time at parents through the Parent PLUS loan program. The details are different, but the architecture is identical: poor and working-class families are turned into collateral, the government looks the other way, and the institutions responsible walk away whole while Main Street burns.
I am seventy-six years old. I have spent my life as a banker, a regulator, a former certified fraud examiner, and a senior investigator for the U.S. Congress in the Financial Crisis Inquiry Commission, where I helped document the causes of the 2008 collapse for the President and Congress. I warned that the mortgage crisis was coming years before it happened. I sat inside the FCIC watching my predictions come true, watching the evidence pile up, and watching the government make a deliberate choice to protect Wall Street instead of Main Street.
Now I am watching history repeat itself.
The Parent PLUS loan program is subprime mortgages all over again — same targeting of the poor, same abandonment of underwriting standards, same mountains of defective loans, same government complicity. And I am very angry. I am angry because I tried to stop the first crisis and no one would listen. I am angry because I have tried for eight years to expose the Parent PLUS fraud, and once again, no one will listen — not the law firms, not the regulators, not Congress, not the press. I am angry because the same people who were hurt in 2008 are being hurt again, and this time there is not even the pretense of a bailout or relief. There is only garnishment, offset, and a lifetime of debt that follows parents into old age.
The numbers did not lie. You cannot build a stable financial system on NINJA loans (no income, no job, no assets), stated-income fraud, teaser rates designed to explode, and adjustable-rate mortgages with prepayment penalties that trapped families when rates reset. I told colleagues. I told powerful people on Wall Street and in Washington. Most of them dismissed me. When the crash finally came, I was not surprised. I was enraged.
I agreed to serve on the Financial Crisis Inquiry Commission because I thought that if we could document what had happened clearly enough — if we could show the American people and their government exactly how the fraud had worked — the system would learn and it would never happen again. I believed that transparency and accountability would force change. I was wrong.
Fannie Mae and Freddie Mac had contractual rights — representations and warranties written into every purchase agreement — that allowed them to force Wall Street banks to take back defective loans. If a loan file showed that the lender had not followed the underwriting rules it had promised to follow, if the income documentation was missing or fabricated, if the appraisal was inflated, if any representation was false, Fannie and Freddie had the right to demand a putback: 'Take this loan back. We will not absorb the loss. You sold us a defective product, and you must make us whole.'
Here is the part that almost no one outside the system understands, and the part that makes me angriest when I think about what could have been done but was not: It did not have to be a 'material' defect. Any defect, even a minor one, could trigger a putback under the contracts. A missing signature. An undisclosed second lien. An income figure that did not match tax records. A property appraisal that was $10,000 too high. Any of these could justify forcing the loan back to the originator. And many loans had multiple defects — not just one or two, but five, six, ten violations stacked on top of each other.
This was not a borderline case. This was pure fiction, transparent fraud, and it sailed through the system because everyone involved — the broker, the lender, the securitizer, the rating agencies — was being paid to approve loans, not to assess risk. When the loan inevitably defaulted, Fannie Mae or Freddie Mac owned the loss. Under the representations and warranties in the purchase agreement, they had the absolute contractual right to force that loan back to the originator. The income misrepresentation alone was enough. But they did not. The loan stayed in the pool, the loss was absorbed by the taxpayers, and the broker and lender kept their fees. That waitress lost her home. The bank kept the profits. And the government chose not to enforce the contract that would have made the bank pay.
Think about that. More than one in four loans was defective. And of the defective loans flagged by the independent reviewer, nearly four in ten were knowingly sold anyway, with full awareness that they violated the guidelines. At the same time, Richard Bowen, a senior vice president and chief underwriter at Citigroup, was raising alarms internally. Bowen warned Citigroup's senior management — including Robert Rubin and the board's risk committee — that 60 to 80 percent of the mortgages Citi was purchasing and then selling to Fannie and Freddie were defective under Citi's own underwriting standards. He documented this in writing. He escalated it up the chain. And he was ignored.
When you combine Clayton's 28 percent baseline rejection rate, the 39 percent waiver-in rate, and Bowen's 60–80 percent defect rate at one of the largest originators, a terrifying picture emerges: the mortgage pools that Fannie Mae and Freddie Mac purchased from Wall Street were riddled with defects. My own analysis of the files we reviewed led me to believe that 50 to 60 percent or more of the mortgages in certain pools had at least one defect that could justify a putback under the plain language of the contracts. We were not talking about a few bad loans scattered across the system. We were talking about systematic, pervasive fraud on a trillion-dollar scale.
And then I told them the part that made me angry: Fannie Mae, Freddie Mac, and the FHFA were pushing for banks to buy back only 3 to 8 percent of the defective loans they had the right to return. The federal agents asked me a direct question: 'How high do you think the putback percentage should have gone?' I gave them my honest answer: 'We should have told the banks that they have to pay back 25 to 50 percent of these loans. If we had enforced the contracts fully, we could have recovered a trillion dollars or more and used that money to help out Main Street.'
The room went quiet. One of the agents wrote down the numbers. And then the meeting ended, and as far as I know, nothing came of it. The signal that was sent was unmistakable: if you are big enough, if you are connected enough, if you are important enough to the financial system, you can commit fraud on a massive scale, and the government will protect you. That is the lesson Wall Street learned. And it is the lesson that the architects of the Parent PLUS system learned as well.
In subprime mortgages, originators and brokers were paid to close loans and pass the risk to someone else. In Parent PLUS, colleges and enrollment-management consultants are paid to fill seats and generate tuition revenue. They push Parent PLUS loans to close the gap, then pass the risk to the federal government and the parents. In subprime, underwriting standards were gutted — stated-income loans allowed brokers to fabricate earnings. In Parent PLUS, there is no real underwriting at all. A parent earning $25,000 a year can be approved for $100,000 in uncapped federal loans with no analysis of whether repayment is possible.
In subprime, when the crash came, homeowners lost their houses, their savings, and their stability. Banks were bailed out. Executives faced almost no criminal prosecution. In Parent PLUS, when parents cannot pay, they face wage garnishment, tax refund seizure, and Social Security offset. The schools keep the tuition revenue. The servicers keep their contracts. The consultants keep billing. And the parents — many of them in their sixties and seventies, many of them earning under $30,000 a year — are told there is no escape, no bankruptcy, no relief. They will die in debt. The pattern is identical. The only difference is that this time, the federal government is not just the referee looking the other way — it is the lender, the collector, and the enforcer, all wrapped into one.
Burd identified forty-one universities — twenty-three private and eighteen public — that systematically steer low-income families into large Parent PLUS debts while awarding billions of dollars in institutional aid to wealthier students who do not need it. These forty-one schools collectively enrolled more than 32,000 Pell Grant recipients whose parents carried median Parent PLUS loan balances near $30,000 — often equal to or exceeding the family's annual household income. They awarded approximately $2.4 billion in institutional grant aid to students who did not demonstrate financial need. They generated more than $1.2 billion in Parent PLUS loan volume from families in the bottom two income quintiles — families earning under $50,000 a year, families least able to afford the debt.
When I read Burd's report, I felt a shock of recognition. Several of the forty-one schools he identified are the same schools where my fourteen core families borrowed. The tactics he describes — conditioning aid on PLUS applications, coaching parents through denials, ignoring adverse credit — are the same tactics I documented in my case files. The outcomes he quantifies — median debts approaching annual income, parents trapped in forbearance watching balances double — are the same outcomes I saw in family after family. Burd's work proves that what I found is not a few bad actors. It is a national pattern, operating at scale, with federal complicity.
The Victims' Stories: Fourteen Families and the Price They Paid
Over several years, I interviewed hundreds of parents and conducted deep-dive analyses on fourteen families at a range of institutions. Their stories did not just move me; they sharpened my hypotheses, revealed patterns of gross negligence and fraud, and helped me see how the Parent PLUS system works in practice. I owe much of the expertise in this chapter to the hours they spent with me, walking through their bank statements, medical bills, collection letters, and financial-aid files.
Dear reader, these are the actual words of some of the parents I have interviewed. Please listen to them. Their lives have been turned upside down by a federal program they were told to trust. Open your heart, your mind, and your soul to these mothers, fathers, and grandparents; they could be your neighbors, your cousins, your brother or sister, or even you.
I have lost hope after all these years of suffering, unable to seek help amid the chaos of the corrupt student loan system that has ruined my life and financial future. That has stolen my good credit history and put me in such extreme debt that I have been unable to secure a loan at any time over the years due to a high debt-to-income ratio. A loan that I should never have been approved for. I also have no hope that the current administration will look out for the people who have been victimized. I was misled by the institution my child attended and taken advantage of by the student loan system itself. Make no mistake, I am a victim and so are the rest of the parents who tried to help their children and had no idea what they were getting into. With regard to my child's institution, I could not assent to terms that I had no knowledge of and were never disclosed to me. Unfortunately, this has ruined any chance for me to find peace and financial stability as I near my retirement years. I'm not sure what my future holds but if I were to guess it looks as bleak as the past has been.
Parent 2
Parent PLUS loans should not have been issued to me because I was not eligible for them. Approval of these loans when not eligible placed a crushing and unjust burden on my family. Further, the ineligibility of these loans should have created more opportunities for my children; however, because we were approved for these loans, my children were not counseled on other opportunities or resources that might be available to them. The payments have created constant fear, emotional distress, and economic hardship, forcing impossible choices between basic necessities such as housing, utilities, and medical care. This debt has caused ongoing stress and long-term financial instability that was not foreseeable at the time the loans were accepted.
Parent 3
Having this Parent PLUS Loan debt all of these years is like facing a mindless beast. Logic, decency, and rescue have no part to play in this nightmare. Although we literally cannot pay the $5,000 monthly payment they want, yet they insist we pay — it is like being tortured to give up information that you don't have. It's unrelenting and brutal. The enormity and unrelenting stress of this is incalculable. We lost our home and our peace of mind because of these unpayable loans. They destroy lives and our own government is doing it to us.
Parent 4
The main way these loans affected me has been decades of extreme stress and financial insecurity. When my daughter was in school, or when she was not in school, when I was working or when I was unemployed, it didn't matter. They wanted their payment or an expensive deferment. Around the time of the parent loans, I was taking out payday loans for essential car repairs or so mortgage or utility payments didn't bounce. That continued in the years following. It adversely affected my credit, and given the fact employers check one's credit now before hiring, was probably a factor in my mostly unemployed or underemployed job history after taking out the loans. From the age of 61, I was unemployed and unable to find a job. Even the ones I was overqualified for would not interview me. So I finally officially retired when I reached my full retirement age, having wasted what should have been my highest-earning 15 years — forever limiting my Social Security payments, my potential savings, and my life post-retirement.
Parent 5
I had the joy and pride of sending my child to a good school, believing I was doing the right thing as a parent, but no one ever told me the truth about Parent PLUS Loans. What followed has quite literally upended my life. Knowing that I can never discharge this debt in bankruptcy has stripped away any sense of security and is destroying what should have been my retirement years. At times, it feels utterly hopeless, as if we are living in a great republic yet are the only group denied its most basic protections. We struggle every single day just to pay our bills, and no one truly understands the relentless stress and fear we live with — the crushing interest rates, the compounding of interest upon interest, and the cruel irony of deferments that only make the balance grow. After years in deferment, the principal can double or worse, turning a promise to help our children into a lifelong financial sentence.
Parent 6
I have had this catastrophic debt for about 19 years now. I wanted to help my only child with college, not realizing I would ruin my financial future in the process. I know this sounds naive, but I had no idea what I was getting into. I was going through a divorce at the time and I was told by the Bursar's office what to do. Each semester my son's schedule would be held hostage until all funds were dispersed. At the time I was only working part time and going myself to school and I was always approved for thousands and thousands of dollars in loans on a $13,000 annual salary. I had no idea what this was amassing to until he graduated, and I saw almost $70,000 in Parent PLUS loans. In November of 2016 Dowling College closed and filed for bankruptcy and had all its debt erased. I was not so lucky. I unfortunately had to file for bankruptcy but unlike Dowling College I could not claim this huge amount of Parent PLUS loans in my bankruptcy. My main concern is that as I am getting older and unable to pay this huge debt, my Social Security will be garnished. I have no idea what I will do or how I will live or survive.
Parent 7
We both grew up raised on the American Dream. We met on a basketball court, fell in love, and began our pursuit of the White Picket Fence that our upbringing promised. We were blessed with two children. We worked opposite shifts minimizing the time our kids spent out of our care. I worked for the post office; my spouse worked for a nonprofit home care agency. We lived paycheck to paycheck and sadly still do. We bought a small house, read to them and they to us, did homework, took them to swim class and dance lessons, baseball and football practice, volunteered in the classroom. They both thrived and we were all happy. When it came time for our oldest to apply to college, the reality of the cost of higher education hit like ten million sacks of pennies. We were advised to take out Parent PLUS loans. Our credit was questionable, yet somehow we were approved. I'm now permanently disabled and trying to get Total and Permanent Disability Forgiveness. The stress is unbearable at times. Sadly, we are not alone, so many other parents are trapped in this mess. The system is broken and the American Dream we so earnestly tried to achieve has become our Nightmare.
Parent 8
My Parent PLUS loan has trapped me into deep debt. I carry the heavy burden of it every day. I think about how I could have done things differently so I wouldn't be in this constant state of stress. I see my daughter thriving though and making a difference in the world through her work as a reporter in Philadelphia and I know that the college education she received launched her career. My $100,000 loan is now $150,000. My payments are being applied just to interest. I work as an employment specialist and case manager in a halfway house serving formerly incarcerated men suffering from addiction. Needless to say, I don't make a lot of money, but I have made a significant impact. Thank you, Tom, for listening to my story. I have hope that your book will be read by many and will have a powerful and positive influence in the way our country invests in the needs of people wanting higher education.
Every one of these parents was told, explicitly or implicitly, that Parent PLUS was how families like theirs pay for college. Not one of them was told that federal law said they might not be eligible. Not one was told that their bankruptcy, their garnishments, their payday loans, or their past-due utilities might constitute adverse credit under 34 CFR 685.200(c). Not one was told that a denial could have unlocked more grants and student loan eligibility for their child. And not one was told that if they ever fell behind, the government could garnish their Social Security, their wages, and their tax refunds — forever.
That silence was not an accident. It was a design. The same design that pushed a waitress into a million-dollar mortgage in 2005. The same design that is now pushing post office workers, cafeteria employees, and disabled parents into six-figure federal loans they can never repay. The architecture is identical. Only the program name has changed.
These parents are not statistics. They are the reason this book exists. And they are the reason I intend to spend the rest of my working life fighting to give them back what was stolen.
End of Sample Chapters | The Great American Betrayal | Thomas R. Borgers | Complete manuscript available upon request.
The author hasn't added any updates, yet.
You da Grad
on May 13, 2026, 4:20 p.m.
I strongly recommend supporting this book. Parent Plus Loan borrowers have been illegally treated like sheep at the slaughter by the federal student loan industry, the colleges, and the lenders.
They need JUSTICE!