The PLUS Loan Problem

Career College Central summary:

  • Last week, the Department of Education announced changes to the PLUS loan underwriting standards that may help previously denied PLUS loan applicants obtain loans. The move 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. Much more can be done to protect consumers from getting too deeply into debt.
  • The National Association of Student Financial Aid Administrators offers three recommendations to add vital consumer protections to Federal PLUS loans.
  1. Separate Parent PLUS Loans from Graduate PLUS Loans.
  2. Increase Loan Underwriting Standards on Parent Loans for New Students.
  3. More Transparency in Federal PLUS Borrowing.

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