The primary credit requirement for a Grad PLUS Loans is not to have an adverse credit history. In some circumstances, a prospective borrower may be able to qualify for a PLUS Loan by documenting to the U.S. Department of Education’s satisfaction that extenuating circumstances exist.
What causes an adverse credit history:
- A current delinquency of 90 or more days on more than $2,085 in total debt; or
- More than $2,085 in total debt in collections or charged off in the past two years (before the date of the credit report); or
- Default, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off of federal student loan debt in the past five years (before the date of the credit report)
Note that Grad PLUS Loans do not use any kind of a debt-to-income ratio or FICO score, unlike private student loans.