Edmit logo

What Happens if I'm Denied for a Parent PLUS Loan?

Featured Stories

Filter By Categories

If you apply for a Parent PLUS Loan and are denied, you may be wondering what your alternatives are for financing your child’s college education.  The good news is that you have a few options available to you.

Obtain an Endorser

If your initial Parent PLUS Loan application is denied, then you can try to obtain an endorser for your Parent PLUS Loan application.  An endorser is a creditworthy cosigner, other than your student, who agrees to repay the PLUS Loan if you cannot.  The option to obtain an endorser is presented online at the end of the PLUS Loan application process. Endorsers are required to complete an Electronic Endorser Addendum.  You, the parent borrower, are required to complete PLUS Credit Counseling online in addition to signing a Master Promissory Note.

Provide Documentation of Extenuating Circumstances

Also at the end of the online application for PLUS Loans, you have the option of documenting extenuating circumstances pertaining to an adverse credit history.  A few examples of qualifying extenuating circumstances are:

  • 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, such as a bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or default determination, that occurred more than five years ago.

To pursue this option, you need to formally appeal the credit decision.  If your appeal is approved, you will be required to complete PLUS Credit Counseling online in addition to signing a Master Promissory Note.

The Silver Lining

If you cannot find an endorser or document extenuating circumstances, then there is one upside to being denied for a Parent PLUS Loan.  The Federal Student Aid Office allows children with parents who have been denied for PLUS Loans to borrow above the maximum limits normally applied, both annually and in total.  Students whose parents have been denied can borrow up to $9,500 to $12,500 per year (depending on the student’s year in school) with a maximum lifetime borrowing limit of $57,500.  By contrast, students whose parents have not been denied for a Parent PLUS Loan can borrow up to $5,500 to $7,500 per year with a maximum lifetime borrowing limit of $31,000.

Consider Other Alternatives

Scholarships, grants, and work-study positions are alternative forms of financial aid worth pursuing fully, as these types of student assistance do not need to be paid back.  Parents and students may also apply for student loans from private lenders, although private student loans offer none of the protections and flexible repayment options associated with federal loans.  State-sponsored education loans may also be available, though state loan programs typically require borrowers to pass a credit check. Lastly, some schools allow students to break up tuition payments over the course of a semester, rather than paying the entire amount due at the beginning of the term.

Sign up for updates

Popular Tags

Financial Aid and Scholarships* paying for college financial aid Cost of College* grants and scholarships FAFSA Student Loans* Saving for College* college tuition federal student loans cost of attendance 529 plan college financial planning financial aid award expected family contribution taxes private student loans room and board college savings plan on-campus housing college applications application fees merit-based financial aid private universities public universities student loan assistance college expenses federal financial aid merit scholarships edmit hidden gems tuition discount budgeting for college financial need parent PLUS loan Salary and Career* southern colleges CSS profile college costs edmit team education expenses living expenses western colleges financial aid appeal income midwestern colleges off-campus housing affordable college college majors loan forgiveness northeast colleges application fee waivers degree programs edmit scholarship institutional aid loan repayment new england colleges choosing a major net price prepaid tuition plans SAT career choosing a college in-state tuition need-based financial aid need-blind colleges private scholarships qualified higher education expenses repayment plans tuition guarantee work-study 401k ACT UGMA UTMA budget college ranking systems discretionary income education savings accounts fees full ride scholarship grants great lakes region colleges international students investment ivy league schools mid-east region colleges need-aware colleges plains region colleges rocky mountain schools southeastern colleges southwestern colleges tuition payment plans 568 presidents group Inversant MEFA applying to college asset protection allowance best price campus life college advisor college deposit college search college spending concurrent enrollment cost by region cost by state crowdfunding educational expenses esports fee waivers financial literacy fraternities and sororities free tuition full tuition gap year health insurance options home equity loan liberal arts degree line of credit medical expenses military benefits out-of-state students out-of-state tuition percent need met private college consultant retirement savings saving school-based scholarships small business standardized testing state aid state schools student bank accounts student loan debt student organizations title IV schools travel expenses tuition decreases tuition increases tuition reciprocity undocumented students