What Should I Communicate To First-Time Parent PLUS Borrowers Now?

With award letters hitting mailboxes over the next few weeks, a question that has come up frequently within the financial aid community is: 

• How should I communicate with first time Parent PLUS borrowers that they will need to wait to apply until the dust settles on the PLUS auction process (winners should be announced prior to April 24th)? 

Here is what I found across the web:

• From Missouri State University financial aid blog:

        CHANGES PENDING FOR THE PARENT LOAN PROGRAM (PLUS) FOR 2009/10

Congress has voted to change the way FFELP PLUS loans will be processed in the future.  This change will affect only NEW PLUS loan borrowers starting in 09/10.  A new policy is being established that will assign one financial institution to be the PLUS lender within each state; that lender will be designated to process all PLUS loans for all schools in their state.

Several details regarding this new process are pending final determination, including who will act as Missouri’s lender.  Therefore, we strongly recommend that any parent considering a PLUS loan for the 2009 school year delay applying until we are able to provide definite procedures for doing so.

• Delaware Valley College posted this message on their Parent PLUS lender list page:

If you are an ongoing PLUS loan borrower, the following notice DOES NOT apply to you, and you may skip this information.

If you are planning to apply for a new PLUS loan for the 2009-10 academic year, please read the following information carefully and completely.

Do not complete your loan applications at this time. The Department of Education recently announced changes to the way PLUS loans are to be handled. The newly announced program (Competitive Loan Auction) is scheduled to be put in place for the 2009-2010 academic year and only applies to new first time borrowers. We expect to receive more details from the Department at the end of April. If you are interested in reading more about the Department's Competitive Loan Auction Pilot Program, copy and paste this link into your web browser: http://www.ed.gov/about/offices/list/ope/plus-auction/index.html. 

• Baldwin-Wallace College posted this messsage atop their PLUS lender list:

Important Note for all NEW 2009-10 PLUS borrowers...
Since current federal legislation may have an impact on the PLUS loan program, it is highly recommended that you wait until after June 1, 2009 to apply for any funds through this program.