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Department of Education to Ease Restrictions on Student Loans

New loan restrictions expected to go into effect fall 2015

student loan debt

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The Department of Education has announced that it will make it easier for parents and students with past credit problems to get approved for a college loan.

The changes will allow people with debt up to $2,085 to have easier access to loan approval, while also shortening the length of time their bad debt is scrutinized from five years to two years.

“These changes allow us to continue to be good stewards of taxpayer dollars and open the doors of college to ensure all students have the opportunity to walk through them,” said Education Secretary Arne Duncan.

Federal restrictions that currently exist on Parent Plus loans have had a major impact on African American families, leaving many parents unqualified for loan support and resulting in less than 17,000 students attending black colleges. But with the new restrictions, the department predicts that about 370,000 more borrowers will clear the government’s credit check.

The Department of Education expects to finalize these new rules by November, with plans to take effect in the fall of 2015.

SOURCE: ABC News