1 / 9

Parent PLUS Loans: A Primer

Parent PLUS Loans: A Primer. New America Foundation January 8, 2014 # PlusLoan. Parent PLUS vs. Stafford Loans. Source: Loan figures are from the U.S. Department of Education’s Federal Student Aid Data Center for the 2012-13 award year. Parent PLUS Credit Check Requirements.

venus
Download Presentation

Parent PLUS Loans: A Primer

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Parent PLUS Loans: A Primer New America Foundation January 8, 2014 #PlusLoan

  2. Parent PLUS vs. Stafford Loans Source: Loan figures are from the U.S. Department of Education’s Federal Student Aid Data Center for the 2012-13 award year.

  3. Parent PLUS Credit Check Requirements • Higher Ed Act: No adverse credit history • Only affects if you can borrow, not the amount • ED regulations define adverse credit history as: • No credit history is not adverse credit • Regulatory and statutory requirements have not changed

  4. ED Changed How it Evaluates 90-Day Delinquency • Each debt on a credit check has one current payment status

  5. ED Changed How it Evaluates 90-Day Delinquency • Each debt on a credit check has one current payment status

  6. ED Changed How it Evaluates 90-Day Delinquency • Pre-October 2011 PLUS Loan approved • Post-October 2011 PLUS Loan denied

  7. What happens if you fail the credit check? • Find a qualified co-signer • Show exceptional circumstances: • Debt resolved • Small debt levels • Students can borrow $4k to $5k more each year in Stafford Loans

  8. ED’s Rationale for Change • Aligns with old bank-based student loan system • Ensure parents aren’t taking loans they can’t pay back

  9. The change resulted in more PLUS loan denials • Denial rates increased by 50% • Overall: 28% to at least 38% • HBCUs: 40-50% to 70% From Q3 2011 to Q3 2013 • Over $1 billion less disbursed • 207,000 fewer recipients • Biggest decreases at for-profit colleges and HBCUs

More Related