The U.S. Department of Education announced a final rule to strengthen the Federal Direct PLUS Loan Program. The announcement, made Wednesday, affects students everywhere, including those at Sonoma State University receiving loans and grants.

These new regulations changed the definition of “adverse credit history,” which now allows more people access to obtain a PLUS loan. The definition was not updated since the Direct Loan Program was created in 1994.

According to the Federal Student Aid office of the Department of Education, PLUS loans are federal loans that graduate students and parents of dependent undergraduate students are eligible to use to assist in paying for college or career school.

The Department of Education had to take many steps including four public hearings across the country for feedback and recommendations from students, families, higher education leaders and community organizations.

The committee negotiating the rule then held sessions from February to May debating and ultimately reaching a finalized draft of the rule. The draft was then published in the Federal Register and was given a month for public comments and opinions before it was officially finalized.

Besides changing the definition of adverse credit history, the updated rule also highlights changes in definitions, such as what it means for debt to be “charged off” and “in collection.”

Also, it changed the amount of time of a borrower’s credit history from the past five years to the past two years, which will affect the determining adverse credit history.

The final regulations will not go into effect until July 1, 2015, according to the Higher Education Act (HEA). The Department of Education is working hard to get the new regulations implemented sooner.

This will not directly affect SSU students until next fall. However, it will give students a better chance to receive loans and grants they were not eligible for.

“About 60 percent of the students enrolled in Fall 2014 are eligible for some sort of federal or state financial aid, and almost 800 parents have accepted PLUS loans,” said Susan Gutierrez, the director of financial aid for SSU.

This change in the regulations will consequently play an affect on students. It will open up a door to more parents being eligible for approval with very minor adverse credit history.

In the past, many were denied from the PLUS loans and would have to get a co-signer on the loan or have the student borrow from Unsubsidized Direct Loan funds in his or her own name. Student loans can increase quickly and are sometimes difficult for the student to pay off once they graduate. 

Giving parents a greater chance to receive the PLUS loans should reduce the amount of student loans being taken out and therefore make financial obligations easier on students and parents.