What To Do If Your Federal Direct PLUS Loan Application is Denied

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 or Document Extenuating Circumstances

If the Direct PLUS application is denied, you can obtain an endorser. In some cases, you can document extenuating circumstances by submitting an appeal with the U.S. Department of Education. See additional information in the Seek Credit Appeal section below.

The U.S. Department of Education will provide you with a credit appeal and endorser information. Contact the U.S. Department of Education Student Loan Support Center at 1-800-557-7394 for more information regarding your denial, appeal, or endorser process. 

A New Master Promissory Note if You Pursue an Endorser

If you are approved with an endorser (co-signer), you will need to sign a new Master Promissory Note (MPN) for each endorsed loan. 

If you intend to endorse multiple Direct PLUS applications please note the following:

  • studentaid.gov will allow you to sign multiple MPN's at one time, but will only link to one loan at a time. Once they link the MPN to the first endorsed loan, all other pending MPN's will be expired. 
  • We recommend signing the first MPN and waiting for it to link to the loan before signing the MPN for the next loan. You will know that it is linked when the MPN shows as completed in MyUI

If you have technical difficulty signing the MPN, please contact the U.S. Department of Education's Student Loan Support Center at 1-800-557-7394.

Direct PLUS Counseling

Direct PLUS Counseling is required for all borrowers who are initially denied due to adverse credit, but later approved with an endorser or through a credit appeal. You must complete the required PLUS Credit Counseling on studentaid.gov for the loan to disburse.

Seek a Credit Appeal

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.

Credit appeals may be submitted on studentaid.gov. If the credit appeal is approved, you will also need to complete the Direct PLUS Counseling.

Additional Unsubsidized Loan Eligibility

If your credit was denied, we will review your student's eligibility for additional Direct Unsubsidized Loan funds. However, if another parent borrower or a credit worthy endorser are later approved through the appeal process, the student will no longer be eligible for any un-disbursed Direct Unsubsidized loan funds.