Graduate Student Denied Grad Plus Loan

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Graduate Student Denied Grad Plus Loan

Postby gradmusicstudent » Thu Aug 12, 2010 5:16 pm

Okay, I thought I had a handle on these things, but now I'm just confused.

I applied to grad school. Got accepted and declined my acceptance due to having accepted an overseas teaching job. In June, the teaching job fell through, so I reopened my acceptance to the school. They lined everything up for me to still start this fall. So I applied for financial aid and got everything settled.

I have a subsidized loan, an unsubsidized loan, and a graduate plus loan. I received notification today, 2 weeks before school starts, that the Grad Plus loan was declined. This doesn't come as a huge shock, as I declared Chapter 7 Bankruptcy last August. However, I was told I could appeal. So, I appealed. I was told that a bankruptcy within 5 years has no appeal - there is nothing they could do and I should talk to my financial aid department. So I went in to the financial aid department. They told me I should appeal the direct loans again, or apply for a private loan. Direct Loans told me again there was nothing they could do, and to go back to financial aid.

I feel like a "Go ask your mother, go ask your father" game is going on. I'm a 28 year old graduate student that has a Chapter 7 Bankruptcy within the past year that is starting grad school in 2 weeks. I have my tuition covered, but I'm nervous to sign leases and get settled if I don't have this last loan in place. A Cosigner is not an option.


Advice?
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Re: Graduate Student Denied Grad Plus Loan

Postby ejacobs » Tue Aug 17, 2010 12:21 pm

A bankruptcy on your record definitely will make life difficult as far as getting credit-based loans.. not to state the obvious.

Unfortunately, a private student loan is near impossible to get on your own if your credit is troubled and do not have a cosigner. What I would recommend doing is this: try applying for a private student loan anyway and if you are denied, take that denial letter and the decline from the Grad PLUS loan and present them to your school through their financial aid appeal process. *Note this is different from the Direct Loans appeal... most schools also have their own appeal process.*

This may qualify you for special loans, grants or other aid that the school has pooled as a reserve for students that require more financial help. Also, you should know that if you are denied a Grad PLUS loan, you can go back to Direct Loans and get additional money in the form of another unsubsidized Stafford loan.

You can contact the Direct Loan Center at (800) 848-0979. Speak to a CSR and let them know that you applied for and were denied a Grad PLUS loan and are seeking additional Stafford loan funds.
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Re: Graduate Student Denied Grad Plus Loan

Postby gradmusicstudent » Tue Aug 17, 2010 2:11 pm

Thank you so much for your reply. Any advice or direction definitely helps. I'm considering any and every option at this point.

I will go ahead and apply for a private loan so I have more documentation that I'm being declined - that is a great suggestion. I will take it back to the school with the grad plus denial and appeal and see what they say.

However, I was told by both the school and direct loans that after being denied a Grad PLUS loan, I am not eligible for additional money in the form of another unsubsidized, however, you are not the first one to advise me this. I've read of other people stating this, but both organizations have told me it is an option reserved for parent plus loans / undergraduates. Any thoughts on why they'd be saying this, or how to obtain those unsubsidized loans?
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Re: Graduate Student Denied Grad Plus Loan

Postby ejacobs » Thu Aug 19, 2010 7:56 am

I always say this, "If the assistant is giving you a hard time, go right to the boss." In this case, if the school is being difficult, going straight to the Department of Education's Direct Loan Center will probably net you some more funds. Their main contact phone number is (800) 848-0979.
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Re: Graduate Student Denied Grad Plus Loan

Postby DLOCAP » Fri Aug 20, 2010 5:39 pm

When you are denied a Graduate PLUS loan, you are not eligible for any additional Unsubsidized loans, because your loans limit already include a higher Unsubsidized amount. That is why when Parent PLUS loans get denied the students receives additional funding, because as a Dependent student their loan limits are lower. Now, onto your Grad PLUS loan, because you had a Chapter 7 bankruptcy in the past 5 years you are not eligible to receive a Grad PLUS loan by yourself, buuuuut you can receive that Grad PLUS loan if you can find someone that is willing to endorse (cosign) the loan for you. Hope this helps.
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