Federal Student Aid, an office of the U.S. Department of Education: Proud sponsor of the American mind. Federal Student Aid, an office of the U.S. Department of Education: Proud sponsor of the American mind.

Document Extenuating Circumstances (Appeal)

You may still be eligible to receive a Direct PLUS Loan. To become eligible, you may take one of the following actions:

1. Obtain an endorser and complete PLUS Credit Counseling.
  • An endorser is someone who does not have an adverse credit history and agrees to repay the loan if you do not repay it.
  • The endorser may not be the student on whose behalf you are requesting the Direct PLUS Loan.
2. Document to the satisfaction of the U.S. Department of Education that:
  • The information causing the adverse credit decision is incorrect.
  • OR
  • There are extenuating circumstances relating to the adverse credit history. (Note: Endorsers aren't eligible for this option.)
  • AND
  • Complete PLUS Credit Counseling.

Provide a statement that contains an explanation of your extenuation circumstances and the documentation applicable/appropriate to support your claim.

The Secretary is able to use discretion and, based on your circumstances, consider whether extenuating circumstances allow you to qualify for a loan.

  • The information below is a non-exhaustive list of examples of extenuating circumstances.
  • If you believe that your situation fits within these examples, or presents a situation that otherwise qualifies for extenuating circumstances, review the information under Proof of Extenuating Circumstances to determine if your circumstances could qualify you for review.
  • Review does not guarantee approval.
  • Previous approval based on extenuating circumstances does not guarantee further approvals.
  • Additional documentation may be required beyond the basic requirements listed below.
  • Loss of a job, poor economy, etc. alone are generally not considered extenuating circumstances.

You have one or more of the debts listed above with a combined total outstanding balance greater than or equal to $2,085.

Debts listed above are not considered to be adverse credit if the combined total outstanding balance of those debts is less than $2,085.

Description

Charged Off Account: Any account (open or closed) that has been charged off (written off) during the two years preceding the date of the credit report with a balance greater than zero.

Collection Account: Any account (open or closed) that has been placed in collection during the two years preceding the date of the credit report with a balance greater than zero.

90 or More Days Delinquent on any Debt: Any open account that is currently 90 or more days past due.

Proof of Extenuating Circumstances

  • Borrower is authorized user on the account.
  • Account has been paid in full.
  • Satisfactory repayment arrangement has been established and six months of voluntary, consecutive, on-time, full monthly payments have been made.
  • Example of documentation for the above:
    • Documentation on creditor company letterhead documenting one of the above.

  • Account/debt included in a Chapter 13 Bankruptcy.
  • Required documentation:
    • Final Order from the bankruptcy court indicating the account in question is included in the bankruptcy.

  • Debt Consolidation.
  • Required documentation:
    • A letter from the debt consolidation company on the company's letterhead showing all accounts included in the debt consolidation.
    • AND
    • Proof that six months of voluntary, consecutive, on-time, full monthly payments have been made.

  • Divorce.
  • Required documentation:
    • Final Divorce Decree showing that the borrower is not responsible for repayment of the debt in question.

  • Acceptable only for 90 or More Days Delinquent on any Debt:
  • Federal student loan has been consolidated.
  • Required documentation:
    • Proof of consolidation:
      • Letter from current lender showing loan in question was consolidated and the consolidation loan is not delinquent.
      • Letter from prior lender showing loan was bought through a consolidation and the consolidation loan is not delinquent.

  • Federal loan is no longer in default.
  • Required documentation:
    • Documentation on loan holder/servicer letterhead verifying that borrower has either made satisfactory repayment arrangements on the loan or has rehabilitated the loan.

Description

Borrower's wages have been garnished in the past 5 years preceding the date of the credit report.

Proof of Extenuating Circumstances

  • Garnishment has been released.
  • Required documentation:
    • Documentation on official letterhead showing the garnishment was released or paid in full.

Description

Borrower has had a repossession or an involuntary repossession within the past 5 years preceding the date of the credit report.

Proof of Extenuating Circumstances

  • Account has been paid in full.
  • Satisfactory repayment arrangement has been established and six months of voluntary, consecutive, on-time, full monthly payments have been made.
  • Borrower is authorized user on the account.
  • Example of documentation for the above:
    • Documentation on creditor company letterhead documenting one of the above.

  • Divorce.
  • Required documentation:
    • Final Divorce Decree showing that the borrower is not responsible for repayment of the debt in question.

  • Car loan has been reinstated.
  • Required documentation:
    • Documentation on creditor letterhead showing borrower is still responsible for paying the loan.
    • AND
    • Six months of voluntary, consecutive, on-time, full monthly payments have been made.

Description

Any Title IV debt that is currently in default.

Proof of Extenuating Circumstances

  • Federal student loan has been consolidated.
  • Required documentation:
    • Letter from current lender showing loan in question was consolidated.
    • Letter from prior lender showing loan was bought through a consolidation.
    • AND
    • The consolidation loan is not delinquent.

  • Loan is no longer in default.
  • Required documentation:
    • Documentation on loan holder/servicer letterhead verifying that borrower has either made satisfactory repayment arrangements on the loan or has rehabilitated the loan.

Description

Mortgage account has the loan listed as having the foreclosure process started.

Proof of Extenuating Circumstances

  • Divorce.
  • Required documentation:
    • Final Divorce Decree showing that the borrower is not responsible for repayment of the debt in question.

  • Loan Modification Agreement.
  • Required documentation:
    • Finalized signed and notarized modification paperwork and proof of payment in accordance with the modification agreement.

  • Mortgage is Paid-in-Full.
  • Required documentation:
    • Release of Deed from the lender.

  • Short Sale has been approved and completed.
  • Required documentation:
    • Notarized final HUD-1 statement.

Description

Deed in Lieu is being reported in the past 5 years preceding the date of the credit report.

Proof of Extenuating Circumstances

  • Divorce.
  • Required documentation:
    • Final Divorce Decree showing that the borrower is not responsible for repayment of the debt in question.

  • Mortgage is Paid-in-Full.
  • Required documentation:
    • Release of Deed from the lender.

  • Short Sale has been approved and completed.
  • Required documentation:
    • Notarized final HUD-1 statement.

  • Timing Issue regarding deed in lieu.
  • Required documentation:
    • Proof from Mortgage Company that Deed in Lieu is over 5 years old.

Description

Borrower has had a foreclosure in the past 5 years preceding the date of the credit report.

Proof of Extenuating Circumstances

  • Short Sale has been approved and completed.
  • Required documentation:
    • Notarized final HUD-1 statement.

  • Mortgage was paid in full before foreclosure.
  • Required documentation:
    • Cancellation of Sherriff Sale.
    • Release of Deed from the lender.

  • Timing issue regarding foreclosure.
  • Required documentation:
    • Proof from Mortgage Company that foreclosure is over 5 years old.

Description

Borrower has a discharged Chapter 7, 11 or 12 Bankruptcy in the past 5 years preceding the date of the credit report.

Proof of Extenuating Circumstances

  • Timing issue regarding bankruptcy.
  • Required documentation:
    • Discharge paperwork that shows bankruptcy was discharged over 5 years ago.

  • Bankruptcy chapter conversion.
  • Required documentation:
    • Discharge paperwork or paperwork showing that a Chapter 7, 11 or 12 bankruptcy has been converted into a Chapter 13 bankruptcy.

Description

Borrower has a State, County or Federal Tax Lien in the last 5 years preceding the date of the credit report regardless of file date.

Proof of Extenuating Circumstances

  • Satisfactory repayment arrangement has been established and six months of voluntary, consecutive, on-time, full monthly payments have been made.
  • Required documentation:
    • Documentation on official letterhead documenting one of the above.

  • Account/debt included in a Chapter 13 Bankruptcy.
  • Required documentation:
    • Final Order from the bankruptcy court indicating the account in question is included in the bankruptcy.

  • Lien was incorrectly filed.
  • Required documentation:
    • Letter on official letterhead showing that the lien was filed in error. This is sometimes in the form of a release.

  • Lien has been released.
  • Required documentation:
    • Copy of the actual release.
    • Proof of payment.
There may be other documentation required depending on your specific circumstances.

If you have reviewed the information above and no longer wish to document extenuating circumstances, you have the following options:

  • Obtain an endorser and complete PLUS Credit Counseling. Notify the school's financial aid office of your decision.
  • Not pursue a Direct PLUS Loan at this time. Contact the school's financial aid office to discuss other options that may be available.

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