Loosening standards to borrow money for college

The U.S. Department of Education process Parent PLUS loan applications. It is an easier way to borrow money for college education at a cheaper interest rate. Parent PLUS loans are more popular because parents are not required to start repayment until six months after the kid leave college. When the program was introduced in 1980s, parents were required to start paying back the loan immediately after the kid leave college. People with bankruptcy, default, or foreclosure during the last five years are not approved for loans. Also payment delinquencies within last 90 days are a reason to reject applications. Trying to make college education more affordable, a group of legislators are proposing to reduce the time period to two years from five and to ignore up to $2,100 bad debt when applications are considered. Many critics say this will lead to more Parent PLUS loan defaults.

Parent PLUS loans are easier to qualify for many because assets and income are not part of deciding criteria. Only important criterion considered appears to be credit history. Having more than $62 billion already loaned under the program, Parent PLUS loans are considered one of more popular college education loan programs.

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