Options If Your Federal Direct PLUS Loan is Denied
- Utilize Another Parent Borrower
- Obtain an Endorser (Co-Signer) or Document Extenuating Circumstances
- Seek a Credit Appeal
- Student Borrow and Additional Unsubsidized Loan
Utilize Another Parent Borrower
The "parent" in Federal Direct Parent PLUS Loan references a biological, adoptive parent, or a step-parent that was listed on the FAFSA. You may elect to have another qualifying parent or step-parent pursue the loan. They will need to complete a new PLUS request and Master Promissory Note (MPN) on studentaid.gov.
Obtain an Endorser (Co-Signer)
If the Direct PLUS application is denied, you can obtain an endorser. If you are going to obtain an endorser, the following three items must be completed.
- Endorser Addendum
- The endorser must complete an Endorser Addendum. An endorser is someone who agrees to repay the Direct PLUS Loan if the borrower becomes delinquent in making payments or defaults on the loan. The endorser may not be the student on whose behalf a parent obtains a Direct PLUS Loan.
- A New Master Promissory Note if You Pursue an Endorser
- You will need to complete a Master Promissory Note (MPN) for each endorsed loan. If you intend to have multiple (i.e., fall and spring) Direct PLUS loans endorsed, after completing one MPN, wait one week before completing another MPN.
- If you have technical difficulties completing the MPN, please contact the U.S. Department of Education's Student Loan Support Center at 1-800-557-7394.
- Direct PLUS Credit Counseling
- Direct PLUS Counseling is required for all borrowers who are initially denied due to adverse credit, but later approved with an endorser. It provides information on the obligations associated with borrowing a PLUS loan and assists in making careful decisions about taking on loan debt.
Seek a Credit Appeal
In some cases, you can document extenuating circumstances by submitting an appeal with the U.S. Department of Education via the studentaid.gov website. The Department of Education allows borrowers whose credit was denied the opportunity to document either of the following situations:
- Information showing that credit reporting used in the credit denial is incorrect and/or has been corrected.
- Extenuating circumstances exist relating to the adverse credit history of the primary PLUS borrower.
Direct PLUS Counseling must be completed for all borrowers who are initially denied due to adverse credit, but later approved through a credit appeal.
Additional Unsubsidized Loan Eligibility
If your credit was denied and you will not be using another parent borrower, obtaining an endorser, or seeking a credit appeal, your student can request that we review their eligibility for additional Direct Unsubsidized Loan funds. Students can request this by emailing email@example.com to let our office know that their parent was denied the PLUS loan and they are interested in borrowing an additional unsubsidized loan.