If	your	school	participates	in	the	Direct	PLUS	program	but	a	student9s	parent	cannot	obtain	a	Direct	PLUS	Loan,	the
student	is	allowed	to	borrow	additional	unsubsidized	funds	(see	<Criteria	for	Dependent	Students	to	Receive	Additional
Direct	Unsubsidized	Loan	Funds=	in	Chapter	4	of	this	volume).
Required	Counseling	for	Direct	PLUS	Loan	Applicants	With	Adverse	Credit
Any	student	or	parent	Direct	PLUS	Loan	applicant	who	has	an	adverse	credit	history	but	qualifies	by	obtaining	an	endorser
or	documenting	that	there	are	extenuating	circumstances	must	also	complete	PLUS	Loan	Credit	Counseling	on	the
Department9s	StudentAid.gov	website.
Adverse	Credit	History	and	Default
Although	a	default	on	a	
Title	IV	loan	will	generally	appear	in	a	student	or	parent	Direct	PLUS	Loan	applicant9s	credit	record
and	result	in	the	individual	being	determined	to	have	an	adverse	credit	history,	being	in	default	on	a	Title	IV	loan	and
having	an	adverse	credit	history	are	separate	eligibility	issues.	A	Direct	PLUS	Loan	applicant	who	is	identified	through	the
Department9s	National	Student	Loan	Data	System	(NSLDS)	as	being	in	default	on	a	Title	IV	loan	and	who	has	also	been
determined	to	have	an	adverse	credit	history	(due	to	the	default	and/or	other	adverse	credit	conditions)	cannot	qualify	for
a	Direct	PLUS	Loan	simply	by	obtaining	an	endorser	or	by	providing	acceptable	documentation	of	extenuating
circumstances.	The	applicant	must	also	separately	resolve	the	default	status	by	one	of	the	means	discussed	under
<Resolving	Default	Status=	in	Volume	1,	Chapter	3.
In	some	cases,	the	Direct	PLUS	Loan	credit	check	may	not	reveal	a	default	on	a	Title	IV	loan,	particularly	if	the	default	is
not	recent.	If	a	student	or	parent	Direct	PLUS	Loan	applicant	who	is	identified	in	NSLDS	as	being	in	default	on	a	Title	IV
loan	does	not	have	any	other	adverse	credit	issues,	the	applicant	will	pass	the	PLUS	credit	check.	In	this	circumstance	you
cannot	assume	that	the	approved	credit	check	result	supersedes	the	information	in	NSLDS.	The	default	must	be	resolved
before	you	can	disburse	Direct	PLUS	Loan	funds	or	other	Title	IV	aid	to	the	applicant.
Direct	PLUS	Loan	Application
Schools	that	offer	Direct	PLUS	Loans	have	the	option	of	requiring	student	and	parent	Direct	PLUS	Loan	applicants	to
complete	the	
Direct	PLUS	Loan	Application	(formally	known	as	the	"Federal	Direct	PLUS	Loan	Request	for	Supplemental
Information")	on	the	Department's	StudentAid.gov	website	as	the	first	step	in	applying	for	a	Direct	PLUS	Loan.	The	Direct
PLUS	Loan	Application	collects	the	requested	loan	amount,	the	period	of	enrollment	for	which	the	loan	is	intended,	and
other	information	related	to	processing	the	requested	Direct	PLUS	Loan.
Use	of	the	Direct	PLUS	Loan	Application	on	StudentAid.gov	is	not	required.	Schools	may	choose	to	develop	their	own
processes	for	obtaining	the	information	needed	to	originate	Direct	PLUS	Loans.
Although	the	Department9s	FAFSA	Processing	System	(FPS)	matches	student	Direct	PLUS	Loan	applicants	against	NSLDS
to	determine	if	they	are	in	default	on	a	Title	IV	loan,	it	does	not	perform	this	match	for	parent	Direct	PLUS	Loan	applicants.
However,	the	Department	conducts	an	NSLDS	default	check	on	all	Direct	PLUS	Loan	applicants	(both	students	and
parents)	who	complete	the	Direct	PLUS	Loan	Application	on	StudentAid.gov.
Schools	that	use	the	Direct	PLUS	Loan	Application	are	notified	of	the	result	of	the	NSLDS	default	check	through	the
Common	Origination	and	Disbursement	(COD)	System.	The	result	is	reported	as	one	of	the	following	values:
"N"	=	The	borrower	is	not	in	default	on	any	Title	IV	loan.
Definition	of	<Adverse	Credit	History=
34	CFR	685.200(c)(2)(viii)(B)
34	CFR	685.200(b)(5)
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