Denied Parent PLUS Loan

Denied Parent PLUS Loan

Denied Parent PLUS Loans

When applying for a Parent PLUS loan, a credit check will be performed on the borrower to screen for adverse credit history. If a borrower is found to have an adverse credit history, the borrower may be denied the PLUS loan. 

What is considered adverse credit history?

 For purposes of qualifying for a Direct PLUS Loan, you're considered to have an adverse credit history if
  • you have one or more debts with a total combined outstanding balance greater than $2,085 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 (written off) during the two years preceding the date of the credit report; or
  • during the five years preceding the date of the credit report, you have been subject to a
    • default determination,
    • discharge of debts in bankruptcy,
    • foreclosure,
    • repossession,
    • tax lien,
    • wage garnishment, or
    • write-off of a federal student aid debt.

Is there another way I can qualify for a PLUS loan?

If you have an adverse credit history, you may still receive a Direct PLUS Loan through one of these two options:

  1. Obtaining an endorser who does not have an adverse credit history. An endorser is someone who agrees to repay the Direct PLUS Loan if you do not repay it. If you are a parent borrower, the endorser cannot be the child on whose behalf you are borrowing.
  2. Documenting to the satisfaction of the U.S. Department of Education that there are extenuating circumstances relating to your adverse credit history.

With either option 1 or option 2, you also must complete credit counseling for PLUS loan borrowers on the StudentLoans.gov website.

I do not have an endorser, can my student get any additional aid since I cannot borrow a PLUS loan?

If a parent borrower is unable to obtain a PLUS loan, the student may be eligible for additional unsubsidized loans. Remember, Parent PLUS loans are only available to parents of dependentundergraduate students. 

Grade Level Additional Unsubsidized Amount with PLUS Denial
Freshmen and Sophomores (0-58 credits) $4,000
Juniors and Seniors (59+ credits) $5,000

Please Note: If an appeal or an endorser is approved at a later date, the additional unsubsidized loan will be removed and the PLUS loan will be added to the student’s account.

How to Request Additional Unsubsidized Aid 

Our office will be notified and process PLUS loan denials daily. We will then email the student within 1-2 business days notifying them that they may be eligible for additional unsubsidized loans. The student should reply to their email giving us written consent to award the additional loan amount.