Grad Plus Loan issue

[Tyrone.]

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I won’t be applying for a few years but I was doing research because I remembered I have bad credit due to a debt that went to collection because of health issues and being out of work for a while. Even if it is paid off and my credit score goes up it’ll still show that I had delinquent credit issues. Anyone able to give input/advice?


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[DBC03]

I’m not an expert, but what I have gathered from the financial aid presentations I’ve had at my interviews thus far, you are allowed to borrow up to the Cost of Attendance (COA) through the Federal Stafford unsubsidized loans. You take these out first. They don’t look at your credit for these, as far as I know. If you need additional funds, then you take out the Grad Plus Loan. I’ve heard Grad Plus does not look at credit score - it will look at serious credit issues. I don’t think debt collection will be a problem.

EDIT: Poster below stated that Stafford provides up to $40,500, then the rest can be in Grad PLUS, which sounds right. I’ll verify when I get home and can review financial info.

That said, this happened to my family - a $20 bill that never made it to us ballooned to over $1000 years later. We called the creditor and said we would pay it off immediately if they would take it off our credit statement. IF you are able to pay it off, you might be able to come to an agreement like that. Get it in writing, if you can. Good luck!


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[chaim123]

I’m not an expert, but what I have gathered from the financial aid presentations I’ve had at my interviews thus far, you are allowed to borrow up to the Cost of Attendance (COA) through the Federal Stanford unsubsidized loans. You take these out first. They don’t look at your credit for these, as far as I know. If you need additional funds, then you take out the Grad Plus Loan. I’ve heard Grad Plus does not look at credit score - it will look at serious credit issues. I don’t think debt collection will be a problem.

That said, this happened to my family - a $20 bill that never made it to us ballooned to over $1000 years later. We called the creditor and said we would pay it off immediately if they would take it off our credit statement. IF you are able to pay it off, you might be able to come to an agreement like that. Get it in writing, if you can. Good luck!


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From my experience, this is not entirely accurate. The Federal Unsubsidized stafford loans are limited to $40,500 annually, or something like that. Everything in addition to that up to the cost of attendance can be borrowed through Grad Plus

 

[DBC03]

From my experience, this is not entirely accurate. The Federal Unsubsidized stafford loans are limited to $40,500 annually, or something like that. Everything in addition to that up to the cost of attendance can be borrowed through Grad Plus

Thanks for clarifying! That makes more sense (I don’t have any documentation in front of me). My first three interviews were state schools where COA mostly fell within the Stafford amount, so that might have been why I wasn’t sure I would need Grad Plus.

EDIT: it keeps autocorrecting Stafford to Stanford. Sheesh.

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[lpp06]

This PDF may apply here:

https://studentaid.ed.gov/sa/sites/default/files/plus-adverse-credit.pdf

 

[Styrene]

I won’t be applying for a few years but I was doing research because I remembered I have bad credit due to a debt that went to collection because of health issues and being out of work for a while. Even if it is paid off and my credit score goes up it’ll still show that I had delinquent credit issues. Anyone able to give input/advice?


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I think my credit score was around a 615 when I started med school. No issue with either type of loan.

 

[Tyrone.]

I think my credit score was around a 615 when I started med school. No issue with either type of loan.

But I have something from collections that went delinquent because I couldn't pay it

 

[Styrene]

But I have something from collections that went delinquent because I couldn't pay it

Do you know your credit score?

 

[Tyrone.]

Do you know your credit score?

Yes. Right now 532, but I won't be applying for a few years. 2020/2021at the earliest

 

[Tyrone.]

This PDF may apply here:

https://studentaid.ed.gov/sa/sites/default/files/plus-adverse-credit.pdf

I think I'll either be ok from paying it off and the time between now and then will help that fade away, or I'll have to find a cosigner.

 

[Styrene]

Yes. Right now 532, but I won't be applying for a few years. 2020/2021at the earliest

I highly doubt the credit score will matter. You could boost it significantly with a credit card, which is worth a try if you haven’t looked into that already.

 

[Tyrone.]

Yea, I think it'll go up. That delinquent thing kind of worries me because even after paying it, it won't disappear for a number of years. But we'll see how this works out! I'm just going to do everything I can, and when it comes time to apply, we'll see what happens!

 

[DBC03]

Yea, I think it'll go up. That delinquent thing kind of worries me because even after paying it, it won't disappear for a number of years. But we'll see how this works out! I'm just going to do everything I can, and when it comes time to apply, we'll see what happens!

Contact the company where you are delinquent. Tell them that you plan to pay that off and give them the timeframe. Ask them if they are willing to remove it from your credit report if you pay as promised. They are likely to agree if you have been making payments. Get it in writing. Pay it off and check your report to see that they remove it. This worked for us and there’s no reason not to be proactive in this situation. Pm if you have questions.


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[Tyrone.]

If I recall, as long as yiu have a payment plan on place (with letter from creditor) it will past muster eith DOE

Forgive me, but by DOE do you mean determination of eligibility? I'm new to all of this, and that's all I could come up with. If so, this is good to know. I actually had to travel half of the day to make it to Vanderbilt Med today, so I can be seen by some of their specialists for this same issue. But once I'm out of treatment tomorrow, I will be in contact with the company to set up a plan and get it taken care of.

 

[Tyrone.]

Oh. Slightly embarrassing. I should've figured that ha

 

[Tyrone.]

I called the credit union because I wanted more information about this matter. They said that since I had two accounts go delinquent, they will be on there for 7 years, expiring in 2023. So, that's going to be there. I could bring my credit score up, yes, but those points that I wasn't able to pay off those medical bills will be there for the loan companies to see. They're going to see it as me being irresponsible and not paying it, when I was really ill. I literally just got back from Vanderbilt less than 24 hours before thanksgiving because I was having treatment for a disorder that I have. It's on the upswing, but before I was correctly diagnosed medical bills and procedures piled up. There is an extenuating circumstance I saw, but I'm not sure if they will see this as falling under that.

 

[kardom11]

you will probably need a cosigner

 

[DBC03]

I called the credit union because I wanted more information about this matter. They said that since I had two accounts go delinquent, they will be on there for 7 years, expiring in 2023. So, that's going to be there. I could bring my credit score up, yes, but those points that I wasn't able to pay off those medical bills will be there for the loan companies to see. They're going to see it as me being irresponsible and not paying it, when I was really ill. I literally just got back from Vanderbilt less than 24 hours before thanksgiving because I was having treatment for a disorder that I have. It's on the upswing, but before I was correctly diagnosed medical bills and procedures piled up. There is an extenuating circumstance I saw, but I'm not sure if they will see this as falling under that.

Send me a PM- we have successfully gotten these things removed from our credit and I would be happy to help you!



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[Tyrone.]

Send me a PM- we have successfully gotten these things removed from our credit and I would be happy to help you!



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Message Sent!

 

[Tyrone.]

Free Credit Repair Information from CreditInfoCenter.com

This website is a wealth of information for credit repair. It has helped me immensely.

I have two delinquencies from collection that I faulted on, so even if my credit score goes up, it'll still be there for 6 more years according to the credit bureau 🙁

 

[monty55]

Hey OP I had a pretty bad credit score from medical bills as well. In order to get Grad Plus for my masters, i just had to prove that there was nothing currently in collections. My credit score was around yours or maybe worse.

 

[de Ribas]

I have two delinquencies from collection that I faulted on, so even if my credit score goes up, it'll still be there for 6 more years according to the credit bureau 🙁

actually they can get off the record much sooner. They don't have to stay all 7 years.
Get your report, if there are mistakes, dispute them. This can raise your score by much. My wife's score had risen from like 560 to 780 in less than 2 years. My score was around 705-715 at one time, and after disputing one mistake, It went to 790 next month.

Now I monitor my score couple times a month.

 

[21Rush12]

While grad plus does check credit, as long as you don’t have a bankruptcy or sub600 credit score they are generally approved.

Had a similar issue and I had 0 problem with the 40k Stafford and the rest in grad plus.

I recommend talking to the financial aid office at a medical school for more detailed reassurance, and if you’d like you’re welcome to send me a PM for more specific details

 

[Tyrone.]

I dealt with a case from a few years ago similar to yours. As long as there was a payment plan in place, approved by the creditors, even if $5 bucks a week, DOE was fine with it. This was a person who had multiple medical bill delinquencies and a home foreclosure (job loss and divorce in rapid succession during the recession)

So, even if I'm paying it and it's delinquent? I'm just trying to make sure I'm understanding correctly. Also, it was all medical bills. It has been a crazy year.

 

[Tyrone.]

UPDATE: I spoke with the credit bureau again today and I paid off all three of my debts, and one I set up a payment plan with, that isn't in collection but it's with a hospital that I had extensive work done earlier this year with a huge bill. I'm guessing as long as I keep making payments towards it, it won't go into collection. One of the companies I spoke with said they would remove it completely from my credit report since I paid in full today, and the others the credit bureau service agent sent dispute notes to those collection agencies to request them be removed since I had paid them in full as well. I will find out my fate with all of that in 30 days, she said. So, I really appreciate everyone's help and advice! I was feeling my dreams circling the drain last night, but my dream still feels very much alive, and my bank account nearing empty now. I just hope my health continues to improve and I can finish off my pre-reqs really strong, and I'll be able to write a long ass success story on here in a few years. Fingers crossed! Thanks everyone