The Obama administration on Friday will formally propose changes to the PLUS loan program that would largely loosen the credit requirements needed to obtain them.
The proposal, which was tentatively agreed to by a negotiated rule making panel earlier this year, will clarify in regulation the department's current practice of considering accounts more than 90 days delinquent as "adverse credit" that generally hurt a person’s chances of getting a loan.
But the department is also including several provisions that would relax the current standards for obtaining the loan. The new rules would exempt up to $2,085 in delinquent debt from the adverse credit history that counts against a borrower.
It would also reduce from five years to two the amount of time the department reviews when analyzing a prospective borrower's credit history for most adverse credit events. More serious credit events, such as a bankruptcy, however, would still count against a prospective borrower for up to five years.
"The Obama administration is committed to keeping college accessible and affordable and helping families make thoughtful and informed choices to fund a higher education in today's economy," Education Secretary Arne Duncan said in a statement. "These changes allow us to continue to be good stewards of taxpayer dollars and open the doors of college to ensure all students have the opportunity to walk through them."
Read more at Inside Higher Ed: https://www.insidehighered.com/news/2014/08/08/us-seeks-relax-requirements-federal-plus-loan-program