An offer of a Federal Direct Parent PLUS Loan on the SU award letter is based on eligibility toward borrowing. At the same time, because the Parent PLUS Loan requires credit approval, not all PLUS offers can turn into secured loans.
The Parent PLUS Loan, unlike other federal educational loans, is credit-based. The credit review is not looking at income-to-debt ratios but instead heavily emphasizes the borrower’s debt payment history. Sometimes, unfortunately, the borrower’s financial history does not produce an approval and therefore limits access to the Parent PLUS Loan.
You can attempt to secure funding through one of the options detailed below, even though you have received a PLUS denial. Please alert the Student Financial Aid Office if you wish to pursue one of the options. Without notice, the denied Federal Parent PLUS Loans will be canceled within one week and removed from the award offer.
Utilize Another Parent Borrower
The “parent” in Federal Direct Parent PLUS Loan applies to a biological or adoptive parents and a step-parent listed on the FAFSA. Therefore, some students can elect to have another PLUS applicant.
Any other qualifying parent or step-parent willing to apply for the PLUS Loan can complete a PLUS loan request, and the new borrowing parent will have a credit check done to determine their eligibility. This new borrowing parent will then have to complete a master promissory note (MPN) on the student loan website.
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.
Borrowers make a credit appeal through one of these means.
- Log in to studentloans.gov and select “Document Extenuating Circumstances” on the left navigation bar. Follow the directions and a representative from the Department of Education’s Applicant Services will contact the borrower with further instructions.
- Contact Applicant Services at 1-800-557-7394 between 8a to 8p, Monday through Friday.
Whenever a borrower is appealing credit, please alert Student Financial Aid so the PLUS Loan is not canceled during the appeal process.
Utilize an Endorser
An endorser is someone who will pass the credit check and who agrees, similar to a co-signer, to repay the PLUS Loan if the borrower is unable to do so. Almost anyone can serve as an endorser. However, the student cannot serve as an endorser for their parent.
If you choose to obtain an endorser, the endorser should complete the endorser addendum at studentloans.gov. The endorser will need the Loan Reference Number (if a Direct PLUS Loan Request was completed) or Loan Identification Number to connect the endorsement to the denied PLUS Loan. Completing the endorsement online also requires a Federal Student Aid personal identification number (FSA PIN).
- If the borrower completed the Direct PLUS Loan Request at studentloans.gov, the Loan Reference Number is found in the confirmation email received in the denial notice or by logging into studentloans.gov and selecting “Direct PLUS Loan Requests.”
- If the endorser does not already have an FSA PIN, they may obtain one at www.pin.ed.gov.
Master promissory notes (MPNs) are used for PLUS Loans and allow for multiple year borrowing under the same terms. However, when an endorser is used, the terms of the MPN used for that loan is specific only to that loan. Therefore, a borrower who has previously received a PLUS Loan without an endorser will need to complete a unique MPN for the endorsed loan. Also, any additional PLUS borrowing will require a new MPN and endorser addendum (though the same endorser can be used).
Inform the Financial Aid Office whenever the borrower is seeking or using an endorser so that the loan is not canceled in the meantime.
NOTE: It is key that the endorser addendum, PLUS Loan, and award offer amounts all match exactly.
Pursue Additional Student Unsubsidized Loan
In cases of a parent credit denial or when an eligible endorser is not available, the student can be considered independent for loan purposes only. As such, eligibility for the Federal Direct Unsubsidized Loan increases. This additional student borrowing will likely be less than the PLUS but can assist the student in meeting educational costs.
Freshmen and sophomores are eligible for an increase of up to $4,000 based on cost of education. Juniors and seniors can get up to an additional $5,000. This increase is not available if any parent passes the credit check or an endorser is approved through the PLUS credit check process.
Requests of the additional unsubsidized loan can be made to the Financial Aid Office.
Checking your Loan Status
Prior to disbursement, the loan data available to SU is limited, so if you’re unsure about the process or your completion of a given item, check the Direct Loan website or contact DL Customer Service at (800) 557-7394.
To check the status of your loans, begin by signing into the Direct Loan website.
Using the “My Loan Documents”menu on the left, check the following to determine if further action is required:
Parent PLUS Loans Require:
Stafford Loans Require: