5 Financial Aid, Student Loan Changes to Anticipate in 2015

Credit standards for PLUS borrowers are easing this year, say experts.

The past several years brought some notable changes to student loans and financial aid .

Everything from how interest is calculated on federal loans to which loans are available to graduate students has shifted.

But 2015 should be different, say experts.

Generally, we don’t anticipate too many major changes this year, says Megan McClean, the National Association of Student Financial Aid Administrators' managing director of policy and federal relations.

Still, there are some student loan tweaks on the docket in 2015. Some are certainties, others are proposals.

Here are five to expect.

​1. Federal student loan interest rates will ​rise or fall. Prepare for changes on the interest rates of Direct subsidized, unsubsidized and PLUS loans.

Rates will reset, based on 10-year Treasury rates in May, says Jason Delisle, director of the Federal Education Budget Project at the New America Foundation, a nonprofit think-tank​.

Experts are split on whether 2015 will bring an increase or decrease to interest rates.

But even if rates rise, federal student loans are still one of the most forgiving forms of student debt, says Lauren Asher, president of the Institute for College Access Success. They’re by far the safest way to borrow if you need to borrow for school, she says.

The new rates will only apply to loans disbursed between July 1, 2015 and June 30, 2016. They will not retroactively change the rates of loans from previous years.

2. Pell Grant amounts will increase. The maximum amount a student can receive in federal Pell Grants, one of the most generous types of federal financial aid, will increase to $5,830 in the 2015-2016 academic year​ – a $100 increase from the previous year.

Pell Grants​, which don't need to be repaid, are typically awarded to families making less than $40,000, says Asher.

3. Pay As You Earn is set to expand. ​ President Barack Obama announced plans last ​June to expand access to Pay As You Earn. a federal repayment program that allows borrowers to limit student loan payments to 10 percent of their discretionary income and forgives the remaining balance after 20 years.

Currently, only relatively recent borrowers have access to the plan. Students who borrowed before October 2007 or haven't borrowed since October 2011 can't access PAYE but may repay through different, less generous income-driven plans.

The expansion would make borrowers who took out earlier loans eligible to switch into Pay As You Earn.

The Department of Education estimates that as many as 5 million borrowers will become eligible to enroll in Pay As You Earn after the expansion, which is slated for late 2015.

[Obama] wanted this to be in effect by December of this year, says McClean. That would be assuming that everything goes on time.

4. PLUS loans will become more accessible. In 2011, federal lenders tightened the credit standards required to borrow PLUS loans, resulting in hundreds of thousands of rejection letters. Students of historically black colleges and universities and for-profit schools were hit particularly hard .

Borrowers of federal Parent and Grad PLUS loans in 2015 will see an easing of the criteria used to determine whether an applicant has a clean enough credit record to qualify for PLUS loans. This could potentially increase the number of applicants who pass the credit check by 370,000, says the Department of Education .

Another change to the program: PLUS borrowers who sign on with an endorser will be required to receive loan counseling before receiving the loan, says McClean, of NASFAA​.

5. The federal rating system is scheduled for publication. The proposed federal rating system. which will rate colleges based on access, affordability and outcomes, is slated to become available by the 2015-2016 academic year. The ratings aim to give families a better sense of a college's value and eventually tie federal funding for financial aid to a college's performance.

The U.S. Department of Education released a framework recently and is accepting feedback from the public until Feb.​ 17, 2015.

If the department​ sticks to its timeline, the rating system is supposed to be out sometime this year, says McClean.

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Clarified on Jan. 14, 2015: This article has been updated to clarify the name of the New America Foundation.