Direct PLUS Loan

[rg2o3]

Has anyone on here had trouble being approved for the Direct PLUS Loan? I have some credit card debt that I am fearing will hinder my ability. I am not sure what I would do if I was unable to receive the loan. Thanks.

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[IntheClouds4ever]

Credit card debt won't hurt as long as your score isn't horrible

 

[rg2o3]

delete.

 

[rg2o3]

Credit card debt won't hurt as long as your score isn't horrible

Thanks for the response! My score is in the low 700's.

 

[cardiacfarts]

Thanks for the response! My score is in the low 700's.

actually, it's your credit score that does not matter. You can't have more than $2,065 dollars in outstanding CC debt. Google "adverse credit history" in regard to Direct Plus loans.

You can however get an endorser (cosigner) and you will receive the loan with no problems.

 

[Yhorm the Giant]

actually, it's your credit score that does not matter. You can't have more than $2,065 dollars in outstanding CC debt. Google "adverse credit history" in regard to Direct Plus loans.

You can however get an endorser (cosigner) and you will receive the loan with no problems.

Well when you say outstanding, do you mean delinquent? Like can you not have more than that amount in your rotating credit? Or that amount that is past due?

 

[cardiacfarts]

Well when you say outstanding, do you mean delinquent? Like can you not have more than that amount in your rotating credit? Or that amount that is past due?

You cannot have more than that amount in your current rotating credit. As far as "delinquent" or charged off debts are concerned, you cannot have any at all.

I was in a similar situation as you, and what I did, was that I simply borrowed money from a few friends...paid off enough CC debit to get below the $2,065 (maybe 2,085) amount, made sure that the credit card updated the amount I now owed (<2k) to the credit agencies. Once that was reported to the credit agencies, I then applied for the grad plus loan--it goes through the same day, and then, I simply venmo'd my friends back with my credit card.

For example, if your CC company reports to credit agencies every month on the 12th of each month, make sure you're below the 2K amount before the 12th.

After the 12th, they will have reported the updated CC debt to creditors, and you are free to apply for the grad plus loan. Once you apply and are approved, you can then return the money to your friends (paid via credit card through venmo) and the next time FAFSA will check your credit is an entire year later when you re-apply for the direct plus loan.

 

[Yhorm the Giant]

You cannot have more than that amount in your current rotating credit. As far as "delinquent" or charged off debts are concerned, you cannot have any at all.

I was in a similar situation as you, and what I did, was that I simply borrowed money from a few friends...paid off enough CC debit to get below the $2,065 (maybe 2,085) amount, made sure that the credit card updated the amount I now owed (<2k) to the credit agencies. Once that was reported to the credit agencies, I then applied for the grad plus loan--it goes through the same day, and then, I simply venmo'd my friends back with my credit card.

For example, if your CC company reports to credit agencies every month on the 12th of each month, make sure you're below the 2K amount before the 12th.

After the 12th, they will have reported the updated CC debt to creditors, and you are free to apply for the grad plus loan. Once you apply and are approved, you can then return the money to your friends (paid via credit card through venmo) and the next time FAFSA will check your credit is an entire year later when you re-apply for the direct plus loan.

I REALLY appreciate that, that is great advice. My own friends and parents are pretty poor and can't do that, but my in-laws are pretty well-off and are always offering to help, I'm just stubborn and don't take it, but this looks like one instance where I will have to take them up on their offer. It'll be totally worth it thank you so much!

 

[cardiacfarts]

I REALLY appreciate that, that is great advice. My own friends and parents are pretty poor and can't do that, but my in-laws are pretty well-off and are always offering to help, I'm just stubborn and don't take it, but this looks like one instance where I will have to take them up on their offer. It'll be totally worth it thank you so much!

no worries brothaman, I've been there haha, gluck!

 

[Jaxey]

You cannot have more than that amount in your current rotating credit. As far as "delinquent" or charged off debts are concerned, you cannot have any at all.

I was in a similar situation as you, and what I did, was that I simply borrowed money from a few friends...paid off enough CC debit to get below the $2,065 (maybe 2,085) amount, made sure that the credit card updated the amount I now owed (<2k) to the credit agencies. Once that was reported to the credit agencies, I then applied for the grad plus loan--it goes through the same day, and then, I simply venmo'd my friends back with my credit card.

For example, if your CC company reports to credit agencies every month on the 12th of each month, make sure you're below the 2K amount before the 12th.

After the 12th, they will have reported the updated CC debt to creditors, and you are free to apply for the grad plus loan. Once you apply and are approved, you can then return the money to your friends (paid via credit card through venmo) and the next time FAFSA will check your credit is an entire year later when you re-apply for the direct plus loan.

This is wrong! This is directly from studentaid.edu.gov:
you’re considered to have an adverse credit history if you have one or more debts with a total combined outstanding balance greater than $2,085 that are 90 or more days delinquent as of the date of the credit report, or that have been placed in collection or charged off (written off) during the two years preceding the date of the credit repor

 

[cardiacfarts]

This is wrong! This is directly from studentaid.edu.gov:
you’re considered to have an adverse credit history if you have one or more debts with a total combined outstanding balance greater than $2,085 that are 90 or more days delinquent as of the date of the credit report, or that have been placed in collection or charged off (written off) during the two years preceding the date of the credit repor

so wait, if my credit card bill has more than 2K in debt, however that I am still making payments, and that I am in "current status" does that mean I am not in delinquent debt?

 

[radian313]

Folks, delinquent means your more than “$2,085” is not paid and has been sent to collections. I know folks who had more than 15K debt yet were making payments on time had no issue getting the loan. Morale of the story? If you are in doubt print out your credit history and see whats going on.

 

[cardiacfarts]

Folks, delinquent means your more than “$2,085” is not paid and has been sent to collections. I know folks who had more than 15K debt yet were making payments on time had no issue getting the loan. Morale of the story? If you are in doubt print out your credit history and see whats going on.

bloody hell, that saves me a lot of stress.

thank you for clarifying, I hope the OP doesn't take my prior post and run with it

 

[radian313]

bloody hell, that saves me a lot of stress.

thank you for clarifying, I hope the OP doesn't take my prior post and run with it

I know its confusing as hell. Thats why SDN is useful.

 

[rg2o3]

Thanks for all of the input guys. I have no delinquent debt, have never missed a payment and have a solid credit score. I just do have a bit of CC debt from some hard times in the past. Have been working hard to get it down. However difficult as a student, hah.

 

[BishopFaust]

Just to clarify, if you have a chunk of undergrad debt (~30k) and credit card debt (much) greater than $2,085 but in good standing with all creditors and have a low 700 / high 600's credits score you should be able to get the Direct PLUS Loan? I'm thinking about taking out a loan and consolidating my credit card debt over the Summer. Would this hinder my chances of getting this kind of loan?

I also see something about parents credit scores getting checked as well. Is this true? If so, I'm in trouble. My parents haven't financially supported me since my early teens... don't know the application is asking for their information.

 

[kamakazi5]

To use myself as an example. I have roughly 25k in student loans and 30k in credit card debt (don't be like me kids). I also have a decent sized car loan and was approved with zero issue for the full grad plus loan amount that I needed. This is after a mistake caused my credit score to drop nearly 100 points to below 650. If I can get approved, almost anyone can, assuming no collections or delinquent accounts.

 

[ciestar]

Just to clarify, if you have a chunk of undergrad debt (~30k) and credit card debt (much) greater than $2,085 but in good standing with all creditors and have a low 700 / high 600's credits score you should be able to get the Direct PLUS Loan? I'm thinking about taking out a loan and consolidating my credit card debt over the Summer. Would this hinder my chances of getting this kind of loan?

I also see something about parents credit scores getting checked as well. Is this true? If so, I'm in trouble. My parents haven't financially supported me since my early teens... don't know the application is asking for their information.

My parent’s credit was never checked and my dad declared for bankruptcy and one point and my mom’s credit is in the low 500s.

 

[Durty-Trixxx]

I also see something about parents credit scores getting checked as well. Is this true? If so, I'm in trouble. My parents haven't financially supported me since my early teens... don't know the application is asking for their information.

I think parents' credit scores only get checked if you're an undergrad, right?

Professional students are considered independent students with regard to financial aid, so that means only YOUR credit scores are checked to qualify for the Direct PLUS loan. Your parents could be homeless paupers or multi-millionaires and it wouldnt affect your chances either way.

 

[whirlpool159]

What if you don’t have a credit card? Does that affect your ability to receive Direct PLUS?

 

[samac]

What if you don’t have a credit card? Does that affect your ability to receive Direct PLUS?

You need to have some form of credit to have a credit Score. It doesn’t have to be credit cards.

Folks, as long as you’re not delinquent/ filed a recent bankruptcy you’ll be ok. Your parents information isn’t ncessary.

 

[ciestar]

I think parents' credit scores only get checked if you're an undergrad, right?

Professional students are considered independent students with regard to financial aid, so that means only YOUR credit scores are checked to qualify for the Direct PLUS loan. Your parents could be homeless paupers or multi-millionaires and it wouldnt affect your chances either way.

Yes and this was the Parent Plus loan