The PLUS Loan Problem

"This week, the U.S. Department of Education announced changes to the PLUS loan underwriting standards that may help previously denied PLUS loan applicants obtain loans. This will be welcome news to previously approved loan applicants who found themselves unexpectedly denied last year. But federal PLUS loans can be risky business for graduate students and parents of undergraduates who can use them to borrow up to the full cost of attendance at college," NASFAA President Justin Draeger writes in an opinion piece for Inside Higher Ed. "Much more can be done to protect consumers from getting too deeply into debt. The Department of Education recently added PLUS loan underwriting standards to its list of items to potentially consider during negotiated rule-making, the process where students, advocates and colleges work with the federal government to hash out new regulations. The National Association of Student Financial Aid Administrators offers three recommendations to add vital consumer protections to Federal PLUS loans. Separate Parent PLUS Loans from Graduate PLUS Loans. ... Increase Loan Underwriting Standards on Parent Loans for New Students. ... More Transparency in Federal PLUS Borrowing."

 

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