President Barack Obama has signed off on the policy that supporters say could make college affordable for more families. Changes towards the PLUS loan program allows families with small amounts of outstanding debt which have been denied loans under new, more stringent lending rules, to lodge an benefit of that decision.
Members of the Congressional Black Caucus together with presidents of historically black colleges happen to be calling for the change since the tougher rules entered effect. Unlike other federal student loan programs, parents PLUS loans are unlimited, but they carry the greatest interest rates associated with a federally sponsored loans.
The protests over the PLUS program initially arose after the US Department of Education made a decision to consider delinquencies of more than 90 days when deciding weather to approve or reject applicants in 2011. Representative Marcia Fudge of Ohio has recently written a letter protesting the change, stating that it disadvantaged groups of students signed up for historically black schools.
“Actions taken through the Department of Education have disproportionately and adversely impacted students across this nation; particularly, more than 28,000 HBCU students. It is time to stop the bleeding,” she said.
Parents whose loan applications are denied may ask for reconsideration under the new policy.
The Education Department said students whose parents are denied PLUS loans automatically become entitled to an extra $4,000 in loans that are more flexible and carry lower rates of interest.
The DOE has taken prior steps to reduce the impact from the change. Earlier this summer, officials announced that they would begin sending letters to applicants turned down for PLUS loans advising them on steps they are able to take to enhance their credit scores. Now, the officials also promised to send information about loan reconsiderations to presidents of historically black colleges so that they may monitor what percentage of their students’ parents were able to eventually obtain a loan after being rejected initially.
Shaquille Brewster of the Associated Press writes the United Negro College Fund reports that just about 30,000 of HBC families were rejected for PLUS loans. The entire for the entire country is 400,000, although various studies concluded that a greater number of families were affected.
The PLUS change is in line with the recent call by the President for easier college affordability on filling out the compromise legislation which lowered rates of interest for federal student education loans and tied them to treasury bills.
However, at the signing ceremony, Obama warned that this measure is only the first step with what will prove to be a hard legislative battle to come up with a more comprehensive means to fix the problem of college affordability. Speaking in the Oval Office, Obama praised lawmakers on both sides of the aisle for the work installed in to reach a compromise, but added that \”our job is not done.\”