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How do I qualify for a Parent PLUS loan?

December 09, 2018

Parent PLUS loans are available to the parents of undergraduate dependent students.  PLUS loans are sponsored by the William D. Ford Federal Direct Loan Program and administered by the U.S. Department of Education.  Parent PLUS loans feature fixed interest rates with flexible borrowing limits.  Eligible parents may borrow up to the cost of attendance, which is calculated by each school separately and includes living expenses and other education-related costs, minus any other financial aid received.  

Qualifying for a Parent PLUS Loan

The Federal Student Aid Office of the Department of Education sets forth the eligibility requirements for Parent PLUS loans.  To qualify, parent and child must meet all of the following criteria:

Requirements for Parents

  • Parent (biological, adoptive, or in some cases, step-parent) of a dependent undergraduate student

  • Meet the general eligibility requirements for financial aid, including:

  • No adverse credit history, including:

    • No current delinquencies of 90 or more days on any outstanding debt; and

    • No “derogatory” events, such as a bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or default determination, within the past five years

Requirements for Students

  • Meet the general eligibility requirements for financial aid, including:

    • Compliance with all the criteria required of parents (listed above);

    • Possessing a high school diploma or recognized equivalent, such as a GED certificate;

    • Maintaining satisfactory academic progress, as defined by the school; and

    • Registration with the Selective Service, for males students age 18 to 25

Qualifying for PLUS Loans with Adverse Credit History

Parents or students with adverse credit histories may still be able to obtain PLUS loans, by pursuing one of the two options described below.  With either option, parents and students must also complete online credit counseling with StudentLoans.gov.

  • Obtain an endorser: A borrower can be approved for a PLUS loan by finding someone without an adverse credit history who commits to repaying the PLUS loan if the borrower does not.  For parent borrowers, the endorser cannot be the student.

  • Demonstrate extenuating circumstances: If a borrower can demonstrate, to the U.S. Department of Education’s satisfaction, that extenuating circumstances relate to an adverse credit history, then the borrower may still be approved for a PLUS loan.  A few examples of extenuating circumstances:

    • Debt that was included in a Chapter 13 bankruptcy (not a Chapter 7, 11, or 12 bankruptcy);

    • Divorce decree that absolves a divorcee of responsibility for repaying a debt;

    • Consolidation of a defaulted federal student loan (the consolidated loan cannot be delinquent); and

    • Derogatory events that occurred more than five years ago.

Consider Your Alternatives

While it is not required, before applying for a PLUS loan, parents are advised to first explore whether their child qualifies for a Direct Stafford Loan, since Stafford Loans normally have lower fees and interest rates.  Grants, scholarships, and work-study positions are other forms of financial aid that are preferable to incurring student loan debt.  However, after these other alternatives have been exhausted, Parent PLUS loans remain as a viable solution to pay for a child’s college education.