Students with bad credit backgrounds can still acquire financial aid following a federal ruling last week that updated the Federal Direct PLUS Loan Program.
The new regulations are intended to educate students about debt by implementing a loan counseling program and a more efficient application process for new borrowers, according to a federal release. The ruling was published in the Federal Register on Thursday and will go into effect July 1.
Sarah Sullivan, a 21-year-old UF political science senior, uses the federal loan program in conjunction with other subsidized and unsubsidized loans to pay for her studies.While Sullivan thinks that the proposed amendments sound “political, idealistic, mostly noncommittal and unclear,” she is supportive of the measure.
Sullivan said the proposed changes are a step in the right direction, but she said more needs to be done to minimize the degree of debt students are expected to undertake in order to pay for school.
“We need to have smart, capable and well-rounded individuals who are talented and dedicated enough for development and innovation across all fields of study — that’s how we progress,” she said.
Rick Wilder, director of UF student financial affairs, said as long as parents with bad credit have a cosigner and opt to go through loan counseling, students can still participate in the loan program.
This new loan counseling tool will assist all borrowers with customized information regarding their financial aid, he said, not just those with poor credit.
Wilder said he believes most UF students will not be affected by the changes, as most students’ parents have good credit. For those whose parents have bad credit, however, the new regulations will be helpful.
“Any time there is an opportunity to educate parents and students on borrowing money in a responsible way, it’s a good thing,” Wilder said.
[A version of this story ran on page 5 on 10/28/2014]
