Department Cancels Parent PLUS Loan Auction

The U.S. Department of Education has announced that, due to a lack of lender participation, it is canceling a scheduled auction of the rights to make parent PLUS loans. In an April 10 announcement the Department reported that, in all states, fewer than the minimum of two required lenders had submitted prequalification information to participate in the auction, and in many states no lenders had submitted the information.

The failure of the auction was expected given the impact of the global credit crunch on education lending. As a result, the Department announced that, for the 2009-2010 and 2010-2011 award years, parents of dependent undergraduates attending eligible postsecondary institutions will continue to be able to apply for parent PLUS loans through any eligible lender.