Parent Eligibility for College PLUS Loans Reviewed
It may be easier for parents to get for low-interest federal student loans to cover college expenses as a result of new action being taken by the Obama administration.
The U.S. Department of Education is making changes to the criteria in the reconsideration process for loan qualification in the Parent PLUS program. Critics have charged that it has been too difficult for families with minor credit problems to obtain PLUS loans.
In October 2011, screening criteria for lending to parents was tightened by the federal government. It began looking at delinquencies over 90 days when reviewing the credit history of parent applicants. Now, the department says that families with recent, but small-scale debt, may be eligible for PLUS loans through appeals. The agency will reconsider loans that had been rejected because of adverse credit history if families can document extenuating circumstances. A letter this week to financial aid officers outlined efforts to inform applicants who may qualify for the reconsideration process.
The current interest rate on PLUS loans is 6.41 percent.