If your application for a federal direct parent PLUS loan is denied, you have three options for borrowing as a parent:
- Get an endorser who can qualify for a parent PLUS loan.
- Appeal the decision with the Department of Education.
- Borrow a parent loan with a private lender.
Your parent PLUS loan rejection was likely because of an adverse credit history on your credit report or inability to meet other eligibility requirements. An adverse credit history is a negative mark on your credit report, such as a tax lien or debt payment more than 90 days late.
But an initial denial isn’t always the last word. Here’s more about each possible next step to decide which is the best option for you.
Find an endorser
You can still get a parent PLUS loan if you add an endorser who doesn’t have an adverse credit history. An endorser, like a co-signer, legally takes on the responsibility of repaying your parent PLUS debt if you can’t.
An endorser will first need an FSA ID of their own, then they must complete an addendum online. If your endorser is approved, you’re expected to complete credit counseling on the federal student loan website.
Appeal the denial
Appeal your rejection by providing documentation to the Department of Education that proves extenuating circumstances or incorrect information related to your credit report.
The federal student aid website details the types of documentation you might include in your appeal, depending on your credit situation.
After filing an appeal, the decision is left to the Department of Education. If your loan is approved, you’ll still need to complete credit counseling on the federal student loan website. If you’re denied again, compare private borrowing options.
Get a private parent loan
If you can’t get a federal parent PLUS loan, consider borrowing privately. You can borrow a parent loan for your student from a bank, credit union or online lender. To qualify for a private parent loan, you’ll typically need a good credit score and a steady income.
» MORE: Compare parent loans for college
If your credit history was the reason you were denied a federal direct PLUS loan, your interest rate is likely to be higher with a private parent loan than it would have been with a federal loan. You may need a co-signer for approval or a lower interest rate.