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California Association of Private Postsecondary Schools

Education Dept. Proposes Loosening PLUS-Loan Credit Requirements

08/08/2014

The Chronicle of Higher Education. August 7, 2014.

The U.S. Education Department has released proposed rules changes for its PLUS program, which provides loans to graduate students and to the parents of undergraduates who cannot pay for college through other sources of financial aid alone. According to the department, the changes would result in 370,000 more applicants’ being declared eligible for the program.

The most prominent change would be in the program’s credit-history requirement. Under the proposed rule, if an applicant had less than $2,085 in certain types of overdue debt, he or she would pass the credit check. That would represent a significant easing of the rule. Under the current rule, an applicant with any debt in collection can be disqualified.

The proposed changes, to be published on Friday in the Federal Register, resemble a departmental draft proposal that was presented at a negotiated rule-making sessionearlier this year. The department tightened the program’s rules into their current form in 2011, causing an outcry among applicants—especially parents of students at historically black colleges and universities—who suddenly did not qualify.

The new proposal also would give the secretary of education the authority to adjust the $2,085 threshold over time.