From October 2011 to October 2012, the rejection rate for PLUS loans jumped from 28 to 38 percent, and the loan denials disproportionately affected students attending for-profit schools and historically Black colleges and universities (HBCUs).
Although HBCUs leaders have been publicly critical of the U.S. Education Department for tightening credit check criteria for Parent PLUS loan applicants, a new report released by the New America Foundation Wednesday is urging new reforms to ensure that the program does not burden parent borrowers with debt they cannot pay back. Next month, the Education Department begins negotiations with higher education organizations over changes to the eligibility requirements to Parent PLUS Loans.
