The Department of Education announced changes to its Federal Direct PLUS Loan Program last week.
The Department says the rule will help more students and families pay for college, and ensure that they have the proper tools and resources to make sound decisions about financing their education.
The new regulations will both expand student access to postsecondary education and safeguard taxpayer dollars by reflecting economic and programmatic changes that have occurred since the program was established more than 20 years ago.
“The Department’s top priority is to ensure more students can access and successfully complete a postsecondary education,” said U.S. Secretary of Education Arne Duncan. “The updated borrowing standards for the PLUS loan program demonstrate our commitment to ensuring families have access to the financing they need to reach their goal, while being good stewards of taxpayer money.”
The final regulations target the definition of “adverse credit history” for PLUS loan applicants. It implements a streamlined application process for borrowers to obtain a PLUS loan, specifically for those with adverse credit histories. The update will ensure the regulations reflect the country’s current economic conditions, as they’ve changed considerably in the last 20 years.
The Department is also taking action to provide families with more clear, detailed information about their loan obligations to support college financing decisions to ensure their loan debt stays manageable. Prior to the regulatory changes implemented last week, the definition of “adverse credit history” had not been updated since the Direct Loan program’s establishment in 1994.
Hopefully the new updates can provide a more clear understanding for students of color to make sound financial decisions regarding their education.
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