PLUS Loan Denial Due to Adverse Credit History

If the Federal Direct PLUS Loan application is denied due to adverse credit history, there are several options available: 

  • Appeal the decision: The applicant can appeal the credit denial by providing additional documentation or explaining extenuating circumstances that may have contributed to the adverse credit history.
  • Obtain an endorser: If the applicant can secure an endorser who does not have adverse credit history, the loan may be approved. An endorser is someone who agrees to repay the loan if the borrower  doesn't repay the loan, much like a cosigner does for other types of loans. The endorser will need your endorser code and complete the endorser addendum online. 
  • Parent decides not to pursue appeal or endorser options: Your student is eligible to request an additional $4,000 (first and second year undergraduate students) or $5,000 (third year and beyond undergraduate students) in Federal Direct Unsubsidized Loan funding. To request the additional Direct Unsubsidized Loan, the student may email the Office of Financial Aid requesting the additional funds. The additional loan amount must be specified in their email request.
    • If the parent later decides to pursue the Federal Direct Parent PLUS Loan or is approved for the PLUS Loan, any undisbursed Direct Unsubsidized Loan funds will be cancelled.
    • This option is only available to dependent students whose parent is credit denied for the Federal Direct Parent PLUS Loan and not for graduate or professional students.
  • Explore alternative financing options: If the PLUS Loan application is denied, the student or parent can explore alternative sources of financing such as a private student loan or payment plans offered by the school.