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Department of Education Proposes “Adverse Credit” Definition Change

To counter the sharp increase in loan disapprovals recently, the Department of Education has issued a notice of proposed rulemaking to update the rules of creditworthiness for PLUS loans to graduate students and parents. Published earlier this month in the Federal Register, the notice includes a revision of the “adverse credit” definition for PLUS loans, and proposes that an applicant meets the adverse credit history requirement “if the applicant has one or more debts with a total combined outstanding balance greater than $2,085 that are 90 or more days delinquent as of the date of the credit report, or that have been placed in collection or charged off during the two years preceding the date of the credit report.” Over time, the Department of Education can adjust the $2,085 limit and publish any changes in the Federal Register.

For the full story, visit the National Association of College and University Business Officers’ site. Cherry Bekaert also offers a wide range of specialized services for the Education industry.

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