---
kind: "section"
citation: "34 C.F.R. § 685.200"
title: "34"
number: "685.200"
heading: "Borrower eligibility."
url: "https://uscodex.org/cfr/34/685.200"
---

# §685.200. Borrower eligibility.

- (a) **Student Direct Subsidized or Direct Unsubsidized borrower.**
  - (1) A student is eligible to receive a Direct Subsidized Loan, a Direct Unsubsidized Loan, or a combination of these loans, if the student meets the following requirements:
    - (i) The student is enrolled, or accepted for enrollment, on at least a half-time basis in a school that participates in the Direct Loan Program.
    - (ii) **The student meets the requirements for an eligible student under 34 CFR part 668.**
    - (iii) In the case of an undergraduate student who seeks a Direct Subsidized Loan or a Direct Unsubsidized Loan at a school that participates in the Federal Pell Grant Program, the student has received a determination of Federal Pell Grant eligibility for the period of enrollment for which the loan is sought.
    - (iv) In the case of a borrower whose previous loan or TEACH Grant service obligation was discharged due to total and permanent disability, the student—
      - (A) In the case of a borrower whose prior loan under title IV of the Act or TEACH Grant service obligation was discharged after a final determination of total and permanent disability, the borrower—

        (1) Obtains a certification from a physician that the borrower is able to engage in substantial gainful activity; and

        (2) Signs a statement acknowledging that neither the new Direct Loan the borrower receives nor any previously discharged loan on which the borrower is required to resume payment in accordance with [paragraph (a)(1)(iv)(B)](#a-1-iv-B) of this section can be discharged in the future on the basis of any impairment present when the new loan is made, unless that impairment substantially deteriorates;

      - (B) In the case of a borrower who receives a new Direct Loan, other than a Direct Consolidation Loan, within three years of the date that any previous title IV loan or TEACH Grant service obligation was discharged due to a total and permanent disability in accordance with [§ 685.213(b)(4)(iii)](/cfr/34/685.213.md?p=b-4-iii), 34 CFR [674.61(b)(3)(v)](/cfr/34/674.61.md?p=b-3-v), [34](/cfr/34/34.md) CFR 682.402(c)(3)(iv), or [34 CFR 686.42(b)](/cfr/34/686.42.md?p=b) based on a discharge request received on or after July 1, 2010, the borrower resumes repayment on the previously discharged loan in accordance with [§ 685.213(b)(7)](/cfr/34/685.213.md?p=b-7), 34 CFR [674.61(b)(6)](/cfr/34/674.61.md?p=b-6), or [34](/cfr/34/34.md) CFR 682.402(c)(6), or acknowledges that he or she is once again subject to the terms of the TEACH Grant agreement to serve before receiving the new loan; and
      - (C) In the case of a borrower whose prior loan under title IV of the Act was conditionally discharged after an initial determination that the borrower was totally and permanently disabled based on a discharge request received prior to July 1, 2010—

        (1) The suspension of collection activity on the prior loan has been lifted;

        (2) The borrower complies with the requirement in paragraph (a)(1)(iv)(A)(1) of this section;

        (3) The borrower signs a statement acknowledging that neither the new Direct Loan the borrower receives nor the loan that has been conditionally discharged prior to a final determination of total and permanent disability can be discharged in the future on the basis of any impairment present when the borrower applied for a total and permanent disability discharge or when the new loan is made, unless that impairment substantially deteriorates; and

        (4) The borrower signs a statement acknowledging that the suspension of collection activity on the prior loan will be lifted.

    - (v) In the case of a student who was enrolled in a program of study prior to July 1, 2012 and who seeks a loan but does not have a certificate of graduation from a school providing secondary education or the recognized equivalent of such a certificate, the student meets the requirements under 34 CFR [668.32(e)(2)](/cfr/34/668.32.md?p=e-2), [(3)](/cfr/34/668.32.md?p=e-3), [(4)](/cfr/34/668.32.md?p=e-4), or [(5)](/cfr/34/668.32.md?p=e-5).
  - (2)
    - (i) A Direct Subsidized Loan borrower must demonstrate financial need in accordance with title IV, part F of the Act.
    - (ii) [Reserved]
- (b) **Student PLUS borrower.**
  - (1) A graduate student or professional student is eligible to receive a Direct PLUS Loan if the student meets the following requirements:
    - (i) The student is enrolled, or accepted for enrollment, on at least a half-time basis in a school that participates in the Direct Loan Program.
    - (ii) **The student meets the requirements for an eligible student under 34 CFR part 668.**
    - (iii) The student meets the requirements of paragraphs [(a)(1)(iv)](#a-1-iv) and [(a)(1)(v)](#a-1-v) of this section, if applicable.
    - (iv) The student has received a determination of his or her annual loan maximum eligibility under the Direct Unsubsidized Loan Program and, for periods of enrollment beginning before July 1, 2012, the Direct Subsidized Loan Program; and
    - (v) The student meets the requirements that apply to a parent under [paragraphs (c)(2)(viii)(A) through (G)](#c-2-viii-A..c-2-viii-G) of this section.
  - (2)
    - (i) Beginning on July 1, 2026, a graduate student or professional student may not borrow a Direct PLUS Loan.
    - (ii) The limitation for making new Federal Direct PLUS Loan awards described in [paragraph (b)(2)(i)](#b-2-i) of this section shall not be applicable to student borrowers during the period of the student's expected time to credential, if—
      - (A) the student is enrolled in a program of study at an institution as of June 30, 2026; and
      - (B) a Direct Loan was made for such program of study prior to July 1, 2026.
  - (3) If the student withdraws in accordance with [§ 668.22](/cfr/34/668.22.md) or otherwise ceases to be enrolled in the program of study at any point after receiving the exception under [paragraph (b)(2)(ii)](#b-2-ii) of this section, the limitations under [paragraph (b)(2)(i)](#b-2-i) shall apply.
- (c) **Parent PLUS borrower—**
  - (1) **Definitions.** The following definitions apply to this [paragraph (c)](#c):
    - (i) Charged off means a debt that a creditor has written off as a loss, but that is still subject to collection action.
    - (ii) In collection means a debt that has been placed with a collection agency by a creditor or that is subject to more intensive efforts by a creditor to recover amounts owed from a borrower who has not responded satisfactorily to the demands routinely made as part of the creditor's billing procedures.
  - (2) **Eligibility.** A parent is eligible to receive a Direct PLUS Loan if the parent meets the following requirements:
    - (i) The parent is borrowing to pay for the educational costs of a dependent undergraduate student who meets the requirements for an eligible student under [34 CFR part 668](/cfr/34/part668.md).
    - (ii) **The parent provides his or her and the student's social security number.**
    - (iii) The parent meets the requirements pertaining to citizenship and residency that apply to the student under [34 CFR 668.33](/cfr/34/668.33.md).
    - (iv) The parent meets the requirements concerning defaults and overpayments that apply to the student in [34 CFR 668.32(g)](/cfr/34/668.32.md?p=g).
    - (v) The parent complies with the requirements for submission of a Statement of Educational Purpose that apply to the student under [34 CFR part 668](/cfr/34/part668.md), except for the completion of a Statement of Selective Service Registration Status.
    - (vi) **The parent meets the requirements that apply to a student under paragraph (a)(1)(iv) of this section.**
    - (vii) The parent has completed repayment of any title IV, HEA program assistance obtained by fraud, if the parent has been convicted of, or has pled nolo contendere or guilty to, a crime involving fraud in obtaining title IV, HEA program assistance.
    - (viii)
      - (A) **The parent—** (1) Does not have an adverse credit history;

        (2) Has an adverse credit history, but has obtained an endorser who does not have an adverse credit history, and completes PLUS loan counseling offered by the Secretary; or

        (3) Has an adverse credit history but documents to the satisfaction of the Secretary that extenuating circumstances exist and completes PLUS loan counseling offered by the Secretary.

      - (B) For purposes of this [paragraph (c)](#c), an adverse credit history means that the parent—

        (1) Has one or more debts with a total combined outstanding balance greater than $2,085, as may be adjusted by the Secretary in accordance with paragraphs [(c)(2)(viii)(C)](#c-2-viii-C) and [(D)](#c-2-viii-D) of this section, that are 90 or more days delinquent as of the date of the credit report, or that have been placed in collection or charged off, as defined in [paragraph (c)(1)](#c-1) of this section, during the two years preceding the date of the credit report; or

        (2) Has been the subject of a default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off of a debt under title IV of the Act during the five years preceding the date of the credit report.

      - (C) The Secretary increases the amount specified in paragraph (c)(2)(viii)(B)(1) of this section, or its inflation-adjusted equivalent, when the Secretary determines that an inflation adjustment to that amount would result in an increase of $100 or more.
      - (D) In making the inflation adjustment described in [paragraph (c)(2)(viii)(C)](#c-2-viii-C) of this section, the Secretary:

        (1) Uses the annual average percent change of the All Items Consumer Price Index for All Urban Consumers (CPI-U), before seasonal adjustment, as the measurement of inflation; and

        (2) If the adjustment calculated under paragraph (c)(2)(viii)(D)(1) of this section is equal to or greater than $100, adding the adjustment to $2,085 threshold amount, or its inflation-adjusted equivalent, and rounding up to the nearest $5.

      - (E) The Secretary will publish a notice in the Federal Register announcing any increase to the amount specified in paragraph (c)(2)(viii)(B)(1) of this section.
      - (F) For purposes of this [paragraph (c)](#c), the Secretary does not consider the absence of a credit history as an adverse credit history and does not deny a Direct PLUS loan on that basis.
      - (G) For purposes of this [paragraph (c)](#c), the Secretary may determine that extenuating circumstances exist based on documentation that may include, but is not limited to—

        (1) An updated credit report for the parent; or

        (2) A statement from the creditor that the parent has repaid or made satisfactory arrangements to repay a debt that was considered in determining that the parent has an adverse credit history.

        (3) For purposes of [paragraph (c)(2)](#c-2) of this section, a “parent” includes the individuals described in the definition of “parent” in [34 CFR 668.2](/cfr/34/668.2.md) and the spouse of a parent who remarried, if that spouse's income and assets would have been taken into account when calculating a dependent student's expected family contribution.

- (d) **Defaulted Perkins, FFEL, and Direct Loan program borrowers.** Except as noted in [§ 685.220(d)(1)(ii)(A)(3)](/cfr/34/685.220.md?p=d-1-ii-A-3), in the case of a student or parent borrower who is currently in default on a Perkins, FFEL, or Direct Loan program loan, the borrower must make satisfactory repayment arrangements, as described in paragraph (1) of the definition of that term under [§ 685.102(b)](/cfr/34/685.102.md?p=b), on the defaulted loan.
- (e) **Use of loan proceeds to replace expected family contribution.** The amount of a Direct Unsubsidized Loan, a Direct PLUS loan, or a non-federal non-need based loan, including a private, state-sponsored, or institution loan, obtained for a loan period may be used to replace the expected family contribution for that loan period.

## Notes

### Amendments

[59 FR 61690, Dec. 1, 1994]

### Authority

Authority: 20 U.S.C. 1087a—1087j. Subpart A also issued under U.S.C. 1087e(a). Subpart B also issued under U.S.C 1078, 1078-3, 1087(e), 1087e(a)(2), 1087e(a), 1087e(a)(3), 1087e(b), 1087e(d), 1087e(d)(1), 1087e(f), 1087e(g), 1087(m)(1)(A), 1091(a), 1092(d)(1), 1098e(a)(2), 1098e(a)(3), 1098h(a)(2). Subpart C also issued under U.S.C 1087a.

### Source

Source: 59 FR 61690, Dec. 1, 1994, unless otherwise noted.

### Amendments

[59 FR 61690, Dec. 1, 1994]