Archives for : student loans

What happened to the parent’s PLUS loans at historically Black Colleges?


via The Chronicle of Higher Education

A tightening of the PLUS  loan program’s eligibility criteria two years ago has hit historically black colleges  especially hard, as they serve many students who rely on the loan, and a considerable share whose families no longer qualify. Seeing enrollment declines, some colleges have formed a coalition to protest the change. Students, meanwhile, have had to drop out or scramble to find other forms of financing.

At Morgan State, students’ families received about $4-million less in PLUS loans this year than they did in 2012, said Tanya Wilkerson, director of financial aid. “We’ve really taken a hit with the new changes,” she said between advising students on reinstatement day. “It’s just been a big ordeal for us with our students not being able to meet the gap,” she said, “especially for those who have been eligible for the parent PLUS loan in the past.”

U.S. Education Secretary Arne Duncan apologized to historically black colleges last month for what he called poor communication by the department on the changes in loan eligibility. Until 2011, applicants were approved for a PLUS loan as long as they were not more than 90 days delinquent on any debt, and did not have any foreclosures, bankruptcies, tax liens, wage garnishments, or student-loan defaults in the past five years. Under the new standards, unpaid debts in collection and student loans written off as unpayable in the previous five years also count against applicants.

Leaders of historically black colleges and in the African-American community are lobbying the Education Department to change the standards back, arguing that there was no evidence of high default rates on parents’ PLUS loans.


Senator Elizabeth Warren wants Big Changes in Student Loans


Senator Elizabeth Warren wants to reform our nation’s student loan policies.  She believes:
  • Student loans should be easier to eliminate in bankruptcy, Sen. Elizabeth Warren (D-Mass.) says.
  • In a speech, Warren called student loans the worst kind of consumer debt because they start early and “you can’t get rid of them.”
  • Warren also proposed eliminating government profits from student loans

The federal government stands to make $175 billion in profit on student loan interest in the next decade.

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