FAFSA Parent PLUS loan denied for 2018 charge-off - Will paying it help reapplication?

Yes, paying off the charge-off can definitely help! I was in a similar situation last year when my PLUS loan was denied due to a medical collection account. I paid it off, waited for it to update on my credit report (took about 3 weeks), and then submitted an appeal for reconsideration. My second application was approved. The key steps are: 1. Pay off the charge-off completely 2. Get documentation showing it's been paid 3. Wait for your credit report to update OR provide the documentation to FSA 4. Submit a new PLUS loan application Alternatively, your daughter can also accept additional unsubsidized loans in her own name due to your PLUS denial - that's an automatic option that many parents don't realize exists.

OMG this exact thing happened to me!! My son's PLUS loan got denied over a stupid $2,100 charge-off from a department store card. I called and SCREAMED at the financial aid people because nobody told me this would be an issue?? Like why check credit for college loans when the entire system is broken anyway!!! I ended up having my brother apply as the parent borrower instead since we have a unique family situation. Could someone else apply for your daughter maybe??

Paying the charge-off is a good first step, but there are some important details to understand about the Parent PLUS loan process: 1. The charge-off will remain on your credit report for 7 years from the date of first delinquency, even after payment. However, the status will change to "Paid Charge-off" which looks better to lenders. 2. For PLUS loans specifically, the Department of Education is looking for "adverse credit history" which includes charge-offs, collections, etc. that are ACTIVE in the past 5 years. Paying it moves it to inactive status. 3. You have two options after paying: - Submit a new PLUS application (fastest option) - File an appeal with documentation of extenuating circumstances - Complete PLUS credit counseling and then reapply 4. If your daughter needs funding immediately while this gets sorted out, she should contact her financial aid office about the Additional Unsubsidized Federal Direct Loan that becomes available to dependent students when parents are denied a PLUS loan. For sophomores, this is typically $4,000 additional per year.

i had a similar issue. i paid off the charge off and then disputed it with all 3 bureaus. took about 6 weeks to get removed completely then got approved for the plus loan. might be too late for this semester tho.

I've been helping families navigate FAFSA and PLUS loan issues for years, and this is actually a common problem. Many parents don't realize that PLUS loans use different credit criteria than regular loans. The Department of Education specifically looks for: - Accounts with total outstanding balance greater than $2,085 that are 90+ days delinquent, charged off, or in collection within the past two years - Default determinations, bankruptcies, foreclosures, repossessions, tax liens, wage garnishments, or write-offs of federal student aid debt in the past five years The good news is that your 2018 charge-off is getting older, and paying it off will help. But there's also an immediate solution: you can still get the PLUS loan by obtaining an endorser (similar to a co-signer) who doesn't have adverse credit. Alternatively, you can document extenuating circumstances surrounding the charge-off. Have you tried calling the Federal Student Aid office directly? They can guide you through your options. Though fair warning - the hold times are ridiculous right now with all the FAFSA changes this year.

Update: I paid the charge-off this morning and got an email confirmation. I'm planning to reapply for the PLUS loan next week. The financial aid office at my daughter's school also told me that if I'm denied again, she can get an additional $4,000 in unsubsidized loans in her own name. It's not as much as the PLUS would cover, but it's something! Thanks everyone for your help.

ur supposed to get an endorser thats what we did when my mom got denied. its like a cosigner and then the loan got approved right away. its an option right on the website when u get denied just sayin

Just to clarify some misinformation in this thread: A PLUS loan endorser doesn't have to be a relative. It can be any creditworthy individual who agrees to repay the loan if you don't, but they must be a US citizen or eligible non-citizen and must not have adverse credit history themselves. However, finding an endorser is often difficult for the reasons you mentioned. This is why I typically recommend either: 1. Documenting extenuating circumstances for your credit issues (job loss, medical problems, etc.) 2. Having your student take the additional unsubsidized loans 3. Looking into private student loans as a last resort (though federal loans have better terms) Also, while paying off the charge-off is good, I recommend specifically requesting a "paid as agreed" or "paid in full" status update from the creditor rather than just letting it show as a "paid charge-off" - this subtle difference can sometimes help with approval.

I just dealt with this exact situation and found that calling FSA directly was the most helpful approach. The agent walked me through all my options and helped me understand which would be fastest vs. best long-term. But I couldn't get through for days until I used Claimyr (claimyr.com) - they have this service that holds your place in the FSA phone queue and calls you when an agent is available. Saved me hours of frustration! They have a video showing how it works: https://youtu.be/TbC8dZQWYNQ

One more important tip: After you've paid the charge-off, pull your credit reports from all three bureaus through annualcreditreport.com (the official government-authorized site) to verify the account shows as paid. Sometimes it takes 30+ days for creditors to report updates, and you want to make sure it's properly recorded before submitting your new PLUS application. If you're in a rush, you can also use the "PLUS Loan Adverse Credit Appeal" process by submitting documentation directly to the Department of Education showing you've resolved the issue, rather than waiting for credit bureaus to update. This can be significantly faster. The appeal form is available through studentaid.gov after your denial.

I'm new to this community but dealing with a similar situation right now! My PLUS loan was just denied due to an old collection account, and reading through all these responses has been incredibly helpful. One thing I wanted to add - if you're dealing with multiple credit issues like I am, it might be worth considering having your daughter maximize her federal student loans first (subsidized and unsubsidized) before relying on PLUS loans. The interest rates and terms are usually better for the student loans, and PLUS loans should really be a last resort anyway since they have higher rates and fewer protections. Also, @Chloe Taylor, I saw you mentioned your daughter already accepted her aid package - make sure to contact the financial aid office ASAP about the PLUS denial. They can often adjust the package to include that additional $4,000 unsubsidized loan that several people mentioned, and sometimes they have emergency funds or institutional grants that can help bridge the gap while you sort out the PLUS situation. Good luck with everything! This process is so stressful but it sounds like you're taking all the right steps.

I'm so glad to see this thread helping so many families navigate PLUS loan denials! As someone who's been through this process, I wanted to share a few additional resources that might be helpful: 1. Many schools have emergency loan programs or short-term payment plans that can help cover the gap while you're sorting out the PLUS situation. These are often interest-free and can buy you time. 2. If you're still having trouble after paying off the charge-off, consider reaching out to your state's Department of Higher Education - they sometimes have grant programs specifically for families facing financial aid challenges. 3. For future reference, you can check your credit report for free annually and address any issues before applying for PLUS loans. This saves so much stress! @Chloe Taylor, it sounds like you're handling this really well and taking all the right steps. The combination of paying off the charge-off and having the additional unsubsidized loan as backup should put you in a much better position. Keep us updated on how the reapplication goes! The financial aid system can be overwhelming, but threads like this show how much we can help each other navigate it. Thanks to everyone sharing their experiences and advice!

Welcome to the community, everyone who's new here! As someone who's been dealing with financial aid issues for a few years now, I wanted to jump in with a couple additional thoughts that might help. @Chloe Taylor, one thing I learned the hard way is that timing can be everything with PLUS loans. Since you've already paid off that charge-off, I'd recommend calling the creditor directly to ask when they typically report updates to the credit bureaus. Some report monthly, others quarterly. If you can get them to expedite the reporting or provide a letter confirming payment, it could speed up your reapplication process significantly. Also, for anyone else reading this thread who might be in a similar boat - it's worth noting that Parent PLUS loans have pretty strict credit requirements compared to other federal loans, but they don't actually require a minimum credit score. They're mainly looking for that "adverse credit history" that several people mentioned. So even if your overall credit isn't great, as long as you don't have those specific red flags (recent charge-offs, defaults, etc.), you might still qualify. The community advice here about maximizing student loans first before going the PLUS route is really solid. Those lower interest rates can save thousands over the life of the loan. Good luck to everyone navigating this process!