The Department of Education (ED) added unpaid (with a balance greater than zero) collection accounts and charge-offs in their review of PLUS applicants’ credit history, effective with the COD release at the end of October.
Adverse credit history is defined in 685.200(c)(1)(vii)(B) to mean that as of the date of the credit report, the applicant—
Unpaid collection accounts and charge-offs represent debt that is delinquent for 90 or more days, so they fall under that category in the regulatory definition.
In response to NASFAA's inquiry, ED will be issuing an Electronic Announcement in the near future that officially notifies schools of this change.
Publication Date: 12/9/2011