PLUS Loans in Financial Aid Packages
College admission counselors have raised concerns that some institutions are combining Federal PLUS Loans with other financial aid in students’ award packages. At last month’s National Association for College Admission Counseling (“NACAC”) meeting, financial aid professionals argued that including PLUS loans with award packages could make a family’s overall cost appear smaller. It may also mislead students into thinking they’re eligible for the loans, which are not guaranteed. A motion to exclude PLUS loans from an institution’s original financial aid letter was accepted last week, and will be presented to the NACAC’s Board of Directors in November. More on Federal PLUS Loans is available on Inside Higher Ed.
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.