Grad Plus and Adverse Credit History

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5+ Year Member
Sep 25, 2015
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Rising MS2 here and my cosigner has passed away so I need to figure some stuff out.

I think the law changed recently so I wanna double check some things are still true:

1) I will qualify for a Grad Plus Loan as long as my balance on charged off accounts within the past TWO years is less than about $2000.

2) The unpaid collection accounts that occurred prior to TWO years before applying for the loan do not count against me unless they are: bankruptcy, foreclosure, etc.

If the two above statements of true then I am all set. However, if they include ALL past charged off accounts I will definitely not qualify. I have some adverse credit history (charge offs and 2 collections more than 2000 from 3-4 years ago).



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May 26, 2020
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Very good question!!!

The way they have the regulation written is that while charge-offs and collections remain on your credit reports for 7.5 years based on the Fair Credit Reporting Act (FCRA), the collections and charge-offs that were FIRST reported prior to the TWO years before the credit report for a GRAD Plus are not counted. In other words, it seems like this policy would not consider charge-offs and collections that were FIRST reported PRIOR to the two year look-back period, but that are continuing to be reported as charged-off or continues to be in collection even though they have had this status for more than TWO years.

I contacted the Student Loan Center's live chat feature on the Federal Student Aid website and they could not give me a satisfactory answer to confirm whether this interpretation is accurate. They claimed that what ever is being reported by the national credit bureaus determines the adverse credit history for GRAD Plus which would seem like the look-back period is longer than the TWO years in their regulation. This response did not really answer the question that you and I have unfortunately. If they look at whatever the national credit bureaus are reporting, then it seems like the look-back period is 7.5 years (consistent with FCRA) for those who have charge-offs/collections greater than $2,085 plus another 2 years after the charge-offs/collections stop reporting to the national credit bureaus after the 7.5 years required by FCRA. If this is the correct interpretation, then it would seem to encompass charge-offs/collections that continue to be reported to the national credit bureaus after two years and would suggest that you have to wait 9.5 years to apply for another GRAD Plus.

I guess you just have to apply for a GRAD Plus and find out and appeal the decision if you get denied after more than TWO years have passed since the charge-off/collection was FIRST reported. This seems to be the only way to confirm which interpretation of this policy is accurate since the Student Loan Center does not provide a satisfactory nor definitive response.

Could you inform me if you find out more?
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