Brooklyn, N.Y. – Congresswoman Yvette D. Clarke today become a co-sponsor of H.R. 4480, the Protecting Educational Loans for Underserved Students Act (the PLUS Act), which will allow more families to access student loans to send their children to college.
On October 11, 2011, the Department of Education changed its interpretation of the definition of “adverse credit” for the purposes of determining eligibility for the federal Parent PLUS Loan (PPL) program, with which parents and students pay college expenses. Under this definition, any delinquency of more than ninety days could result in denial of a Parent PLUS Loan. Delinquency includes, charge-offs (when a creditor determines a debt will not likely be paid), collections on medical bills, and even late payments of mobile telephone bills.
H.R. 4480 would establish a different definition of “adverse credit” for the purposes of Parent PLUS loans, defining those with “adverse credit” as borrowers who are ninety days or more delinquent on a debt exceeding $2,000 or borrowers who have been subject to a default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or discharge of an unpaid Title IV loan.
“These restrictions have already prevented hundreds of thousands of families from accessing Parent PLUS loans, often for problems that were unavoidable in the worst economic crisis since the Great Depression,” said Congresswoman Clarke, who has worked to reduce interest rates on federal student loans.
“I am concerned that more than 28,000 families with students enrolled at Historically Black Colleges and Universities were denied low-interest loans and as a result, some students had to leave college during the semester because tuition payments had become unaffordable. It compounds the financial distress of these families by putting these students and their families at further economic risk by adding the financial burden of having to pay back loans without the benefit of having completed their college educations in one of the most difficult job markets in our nation’s recent history. The situation has become a real crisis that must be addressed. In the Twenty-First Century, we have an obligation to expand access to higher education, to provide the opportunities that will allow young women and men to fulfill their educational aspirations and pursue the American Dream.”
The bill also includes a provision for loan counseling to assist parents who receive PLUS Loans fully understand the terms and conditions of the loans and their repayment obligations.
U.S. Representative Yvette D. Clarke is a member of the House Committee on Small Business, Ethics, and Homeland Security, where she is the Ranking Member of the Subcommittee on Cybersecurity, Infrastructure Protection, and Security Technologies. She represents many neighborhoods in central and southern Brooklyn, NY which include Brownsville, Crown Heights, East Flatbush, Flatbush, Gerritsen Beach, Madison, Midwood, parts of Park Slope and Flatlands, Prospect Heights, Prospect-Lefferts Gardens, Sheepshead Bay, and Windsor Terrace.