Lawmakers Turn Attention to Student Loans
In efforts to alleviate the burden of student loans, policymakers have recently taken steps to introduce new laws. As part of an executive order, President Obama issued a presidential memorandum that directs the secretary of education to allow five million student loan borrowers to limit their payments at 10 percent of their incomes. The memorandum also asks the secretary of education to provide more effective communication methods and increased loan counseling for borrowers. Separately, Senator Elizabeth Warren presented the Bank on Students Emergency Loan Refinancing Act (“S. 2432”). The bill would lower rates and the costs of new loans, and. Read More.
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. Read More.