Anyone Know About the Fed. Grad Plus Loan

[Anonymous]

So, I'm applying to grad school and am concerned about whether I will pass the credit check.  The first question is whether or not getting preapproved for the loan--using Citibank's preapproval process, for example--will result in a hard inquiry.  Second, I do have charge-offs registered on my account from 2005, but I have had a clean record since.  Will this count as adverse credit history?  I have found mixed reviews on whether they evaluate default on ANY loan or just default on Title IV loans.

[Anonymous]

http://www.studentaid.ed.gov/students/attachments/funding/PlusLoansQA.pdf

http://www.studentaid.ed.gov/PORTALSWebApp/students/english/PlusLoansGradProfstudents.jsp

You are considered to have an adverse credit history if you are 90 or more days delinquent on any debt or if, within 5 years of the date of the credit report, you have been the subject of a default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or writeoff of a Federal Student Aid debt (for example, a Direct Loan or Federal Stafford Loan).

[treschic]

I was reading somewhere on the us dept of education website that they also want (or recommend) you have atleast a 680+ fico score.  in addition to the above information. Hope that helps. 

[braznyc]

I'm a grad student, and I'm sure you already know this, but just in case you don't you must first have applied to the max on the Stafford money for grad school, before you can apply to this, which means you still must submit the FAFSA.

Also I'm sure Grad Plus is the one where a parent can be added if you have an adverse credit history. I know several people who got this loan with scores in the high 500 range, you can get this loan without being in the 600's fico score range, the biggest issue is adverse info like 90 days late, tax liens etc. The interest rate is fixed at 8.5% right now, and this doesn't depend on your score.


FAFSA Grad Info

Message Edited by braznyc on 02-25-2008 02:41 PM

[Anonymous]

Yes, I know score is NOT an issue.  What I'm trying to determine is whether or not past charge-off accounts are factored into this formula.  I am not currently delinquent on ANY account; I have past charge-offs, none of which involve Title IV loans so I was trying to figure out where I stand in this regard.

[treschic]

i too was a grad student, 2 years ago, when this first came about.  I was told that they do take into account your credit score (according to the dept of education website as well as one of the lenders that offers this loan-i forget their name).  and they do look at charge-offs, and collections accounts on your report. to qualify you have to have very good credit, thus the suggested 680+.  i may have been given wrong information however. and its not just adverse accounts related to student loans, but adverse accounts, including any ca or co or even recent late payments (atleast what i was told).

Message Edited by angiepharm on 02-25-2008 04:17 PM

[Anonymous]

Acutally, you can qualify with NO credit history, which speaks to the credit score issue.  I know it's not score based I'm just unsure of whether the "adverse history" refers to Title IV loans or any loan.  Again, I do have past charge-offs but I have a good score...so there is the catch 22.  I know you can qualify for private loans and be UNqualified for the Grad Plus.

[Anonymous]

Adverse credit history is all loans, not just Title IV. The criteria is the same for the Parent PLUS loan and I have seen many people be denied because of adverse credit history that are not Title IV.

If you are declined you may be able to use an endorser (like a co-signer) and I have seen many lenders do overrides for many different reasons. I don't know if you are going to a FFELP school or a Direct Lending school but that will make a difference when it comes to overrides.

Good luck!