A Parent's Credit and PLUS Loans

The PLUS loan is available to the parent as a non-need based loan specifically because it is a credit-based loan, similar to a personal line of credit. As such, it's vital to know exactly where your credit stands.

PLUS Loan Credit Requirements

Eligibility for the PLUS Loan depends on a modest credit check that determines whether the parent has an adverse credit history.

Adverse Credit History

An adverse credit history is defined as being more than 90 days late on any debt or being subject to any of the following:

Credit Issue Details
Default Applicant must not have any current Title IV debt in default.
Bankruptcy discharge Applicant must not have a Chapter 7, 11, or 12 bankruptcy within the past 5 years.
Foreclosure Applicant must not have started the foreclosure process, have a deed in Lieu of foreclosure, or finalized a foreclosure within the past 5 years.
Repossession Applicant must not have a repossession or involuntary repossession within the last 5 years.
Tax lien Applicant must not have a state, county, or federal tax lien within the past 5 years.
Wage garnishment Applicant must not have been subject to wage garnishment in the past 5 years.
Write-off (Charge-off) Applicant must not have any accounts listed as a unpaid write-offs.

What if your PLUS Loan was Denied?

Extenuating Circumstances

If your PLUS Loan Application was denied for any of the reasons listed above, and you are able to document extenuating circumstances, you may be eligible for reconsideration. To learn more about what constitutes an extenuating circumstance or to find out what documentation is required, visit StudentLoans.gov.

Reapply with an Endorser

Applying for a PLUS loan with an endorser (cosigner) can greatly improve your chances of approval. Cosigner release is not available on federal loans at this time; however, by consolidating a PLUS loan, a new account will be opened in the applicant's name, thereby removing the endorser.

Receive More Stafford Loans

When PLUS loan applicants are denied for credit reasons only, their child becomes eligible for an increased amount of Stafford Loans. To take advantage of this, contact the school's financial aid office.