PLUS Credit Requirements

Federal law requires that lenders check the credit history of PLUS applicants. Applicants may be denied a Federal PLUS Loan due to adverse credit, which is defined as:

• The applicant has been subject to a default, tax lien, write-off of an educational debt, bankruptcy discharge, foreclosure, repossession, or wage garnishment during the previous five years.

• The applicant is delinquent on the repayment of any debt as follows:

• During the period January 1, 2007 through December 31, 2009, the applicant can be no more than 180 days delinquent on a mortgage payment on their primary residence, no more than 180 days delinquent on any medical bill payments, and no more than 89 days delinquent on the repayment of any other debt.
• For all other periods of time, the applicant can be no more than 90 days delinquent on the repayment of any debt.

In some cases, an applicant may appeal an adverse credit determination. If you have been denied a PLUS loan for adverse credit, contact your lender to ask about the appeal process.

Additionally, if a parent is denied a PLUS loan due to adverse credit, the dependent student may be able to borrow additional unsubsidized Federal Stafford Loan funds (see limits for independent students).

Contact your school's financial aid office for more information about this option.