New Direct PLUS Loan adverse credit history regulations will be implemented on March 29, 2015. The new standards and procedures relating to adverse credit history will apply to all PLUS Loan credit checks conducted on or after March 29, 2015, regardless of the loan period of the PLUS Loan or which Common Origination and Disbursement (COD) System version is used by an institution to originate the PLUS Loan.

Beginning on March 29, 2015:

1)    For any PLUS Loan credit check conducted on or after March 29, 2015, an applicant will be determined to have an adverse credit history if the total combined outstanding balance of the debts, including debts in collection or charged off during the two years preceding the date of the credit report, is greater than $2,085.

2)    Special loan counseling will be required for any PLUS Loan applicant who has an adverse credit history but who qualifies for a PLUS Loan through the process for reconsideration due to extenuating circumstances or by obtaining an endorser for the loan. While the counseling is mandatory only for these borrowers, the Department will offer voluntary counseling for all PLUS Loan borrowers. Note that this special PLUS Loan counseling is separate and distinct from the PLUS Loan entrance counseling that all graduate and professional student PLUS Loan borrowers must complete.

3)     USDE will modify its procedures so that a credit check for a PLUS Loan applicant will remain valid for 180 days, instead of the current 90 days.

An applicant who was denied a PLUS Loan because of an adverse credit history determination made prior to March 29, 2015, may have another credit check performed under the new standards by completing a Direct PLUS Loan Request on the website, or by submitting a request to the postsecondary institution the student is or will be attending.

If applicants receive an adverse credit history determination through the new credit check process, they can either obtain an endorser or request reconsideration through the extenuating circumstances process. In either case, applicants will be required to complete the special PLUS Loan Counseling on the Department’s website.

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