If a parent is denied a Parent PLUS loan due to adverse credit, the student becomes eligible for higher Direct Unsubsidized Loan limits—typically an extra $4,000–$5,000 per year. Alternatively, parents can appeal the decision, use an endorser, or explore private loans, scholarships, and payment plans.
If they are denied you have 3 (or 4) options: 1) Appeal the decision; 2) Find someone else to co-sign; 3) Ask for an increase in your unsub loan limit ($4000 more I think); or, 4) Take out a private loan.
If a Parent Plus loan is denied, parents have the option of seeking a co-signer/endorser at www.studentaid.gov. The parent may also contact Student Loan Support Center at 1-800-557-7394 for reconsideration of the initial Plus loan denial.
The #1 most common FAFSA mistake is leaving fields blank, followed closely by name/Social Security Number mismatches, but other major errors include incorrect marital/parental info, not reading questions carefully (especially "you" vs. "parent"), and filing late or not at all. You must complete all questions, entering '0' or 'N/A' if applicable, use exact legal names, and ensure accurate SSNs to avoid delays or rejections, with many sources highlighting the importance of filing on time for maximum aid.
The government doesn't forgive Parent PLUS Loans when you retire or draw Social Security benefits, but it has programs that will wipe out your remaining balance after you've made a number of student loan payments under an income-driven repayment plan.
Here are seven other options:
A parent PLUS loan enables your parents or stepparents to borrow money that can be applied to your educational expenses. PLUS loans are loaned directly from the federal government to the borrower. This loan is not based on your family's income or asset information provided on the FAFSA.
To be eligible for a Direct PLUS Loan for parents, you must be a biological or adoptive parent (or in some cases a stepparent), not have an adverse credit history, and meet the general eligibility requirements for federal student aid (which the child must meet as well).
Fill out the FAFSA as an independent student
If your parents are unable or refuse to help pay for college, you should complete and file the FAFSA as an independent student. Independent filers are not required to include information about their parents' income or assets.
There is no minimum credit score required for a Parent PLUS Loan. However, borrowers cannot have an adverse credit history as defined by the U.S. Department of Education.
A Parent PLUS loan is typically denied due to an "adverse credit history," meaning specific negative credit events like having debts over $2,008 that are 90+ days delinquent, recent charge-offs, collections, tax liens, foreclosures, wage garnishments, or bankruptcy discharges within the last five years. Other reasons can include failing general federal aid requirements or incorrect application information, but the primary hurdle is the credit check for adverse conditions.
Overview. The parent borrower who took out the Parent PLUS loan is solely responsible for repaying it. The other parent or spouse is not obligated to repay the loan unless they also signed for it. But students may choose to help with payments if they wish.
Drawbacks of the Parent PLUS Loan
Discharge: Federal parent PLUS loans are rarely discharged for financial difficulties resulting from unemployment, age-related or other illnesses and injuries, or bankruptcy. Nontransferable: Parents cannot transfer the PLUS loan to their student to repay after they finish school.
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The "7-year rule" for student loans generally refers to when negative marks, like defaults, are removed from your credit report (around 7 years after the first missed payment or default date for federal loans, 7.5 years for private loans), but the debt itself doesn't disappear and must be paid off; it's also a benchmark in bankruptcy proceedings where federal loans can become dischargeable after 7 years from when payments were due, though proving "undue hardship" is required and difficult.
Your parent PLUS loan may be discharged if you (not the child) become totally and permanently disabled, die, or (in some cases) file for bankruptcy. Your parent PLUS loan also may be discharged if the student for whom you borrowed dies.
Are student loans forgiven when you retire? No, the federal government doesn't forgive student loans at age 50, 65, or when borrowers retire and start drawing Social Security benefits.
There is no income that is too high to file a FAFSA. No matter how much you make, you can always submit a FAFSA. Eligibility for need-based financial aid increases as the cost of attendance increases, so even a wealthy student might qualify for financial aid at a higher-cost college.