Yes, a credit check is conducted as part of the application process for a Direct PLUS Loan.
Understanding the Direct PLUS Loan Credit Check
When applying for a Direct PLUS Loan, the U.S. Department of Education, which serves as the lender, performs a credit check on the applicant. This step is crucial because applicants must not have an adverse credit history to be eligible for the loan.
The primary purpose of this credit assessment is to determine if you meet the creditworthiness requirements set by federal regulations. Unlike some other federal student aid, Direct PLUS Loans have a credit history requirement.
Key Aspects of the Credit Check:
- Purpose: To ascertain that the applicant does not have an adverse credit history.
- Lender: The U.S. Department of Education is the direct lender for these federal loans.
- Implications: If an adverse credit history is identified, you may still be able to obtain the loan by:
- Obtaining an endorser who does not have an adverse credit history.
- Documenting to the satisfaction of the U.S. Department of Education that there are extenuating circumstances related to your adverse credit history.
For detailed information on Direct PLUS Loans and the credit requirements, you can visit the official Federal Student Aid website.
