Grad PLUS Credit FAQ's

The information below, as well as additional Grad PLUS loan information can be found by accessing Questions and Answers About Direct PLUS Loans for Graduate and Professional Students.

 

Does my debt to income ratio, credit score, or employment status count against me?

These factors are not taken into account when your credit history is reviewed. A lack of credit is not considered adverse credit.

What is considered "Adverse Credit"?

A credit history is a summary of your financial strength, including your history of paying bills and your ability to repay future loans. To qualify for a PLUS loan, you cannot have an adverse credit history. Your credit history may be considered adverse if you are experiencing any of the following credit conditions:

  • Bankruptcy discharge within the past five years. 
  • Voluntary surrender of personal property to avoid repossession within the last five years.
  • Repossession of collateral within the last five years.
  • Foreclosure proceedings started.
  • Foreclosure within the last five years.
  • Conveying your real property that is subject to a mortgage (by deed) to your lender to avoid foreclosure (deed in lieu of foreclosure).
  • Accounts currently 90 days or more delinquent.
  • Unpaid collection accounts.
  • Charge-offs/write-offs of federal student loans.
  • Wage garnishment within the last five years.
  • Defaulting on a loan, even if the claim has been paid.
  • Lease or contract terminated by default.
  • County/state/federal tax lien within the past five years.

 

What are my options when I am declined?

You may either obtain an endorser , or you may choose to document to the satisfaction of the U.S. Department of Education that there are extenuating circumstances related to your adverse credit history. Once either of these courses of action have been completed you're also required to complete PLUS Credit Counseling on our secure StudentLoans.gov Web site.

Contact the school's financial aid office as soon as possible to let them know whether you plan to pursue a Direct PLUS Loan by obtaining an endorser or submitting documentation of extenuating circumstances.

If you decide not to pursue a Direct PLUS Loan, the school's financial aid administrator may be able to provide information concerning other options to assist you with paying for your or the student's education.

Obtain an Endorser

An endorser is someone who does not have an adverse credit history and agrees to repay the loan if you don't repay it. If you're a parent borrower, the endorser may not be the student on whose behalf you're requesting the Direct PLUS Loan.

If you choose to obtain an endorser, the endorser may complete the endorser addendum on our secure StudentLoans.gov Web site. To complete the endorser addendum online, the endorser will need the borrower's last name and either the endorser code (if you applied for a PLUS loan on this Web site) OR the Loan/Award Identification Number and an FSA ID. If you applied for a PLUS loan on this Web site, the endorser code may be found in the confirmation e-mail you received or may be found on the "My Documents" page. If you did not apply for a PLUS loan on this Web site, the Loan/Award Identification Number may be obtained from the school.

After you have obtained an endorser  your're also required to complete PLUS Credit Counseling on our secure StudentLoans.gov Web site.

Complete PLUS Credit Counseling.

Document Extenuating Circumstances

Document to the satisfaction of the U.S. Department of Education that:

  • The information causing the adverse credit decision is incorrect or has been corrected.

OR

  • There are extenuating circumstances relating to the adverse credit history. (Note: Endorsers aren't eligible for this option.)

After you document to the satisfaction of the U.S. Department of Education that there are extenuating circumstances related to your adverse credit history. You're also required to complete PLUS Credit Counseling on our secure StudentLoans.gov Web site.

Complete PLUS Credit Counseling

 

If I am declined and decide to document extenuating circumstances (appeal), how long will this process take?

Applicant Services will contact you. Once all documentation has been received, a determination will be made and provided to you within 7-10 business days.


How do I begin the process of documenting extenuating circumstances?

If you believe there are extenuating circumstances related to the adverse credit information that should be considered in evaluating your eligibility for a Direct PLUS Loan, you may begin the process in one of the following ways:

1.      Log In to StudentLoans.gov and select "Appeal Credit Decision". Follow directions. The Student Loan Support Center will contact you with further instructions.

2.     Contact the Student Loan Support Center via Phone, Email, or Live Chat. Contact information is available on the Contact Us page.