PLUS Loan Denials

Direct PLUS Loan Denial options

We understand that getting denied for a PLUS loan can be a stressful situation and raise understandable concerns about a student's ability to finance a college education. SFS will receive electronic notification of denied PLUS loans in 1-2 business days after a credit denial decision is determined by the U.S. Department of Education. 

A parent or graduate student who is denied for a PLUS loan should not attempt to cosign a private loan or borrow a private loan without a credit-worthy cosigner, as credit eligibility criteria are more restrictive with private lenders. 

Students must still adhere to tuition payment deadlines, regardless if a PLUS loan review is pending or an option below does not return a favorable outcome. Students should never ignore tuition bills, but should contact the Bursar to discuss payment options. 

Option 1: Additional Unsubsidized Stafford Loan

Parent PLUS loans only

Parents who attempted to borrow the Parent PLUS loan but were denied can have their student provide a written request to be awarded an additional unsubsidized Stafford Loan equal to the limits of an Independent Student at their class level (earned credits).

Additional Loan Amounts Awarded

The additional unsubsidized Stafford Loan will disburse to the student account in two portions less the government's 1.0% mandatory origination fee with half applying toward each semester (Fall/Spring).

  • $4,000 for freshmen and sophomores = $3,960 ($1,980 per semester)
  • $5,000 for juniors and seniors = $4,950 ($2,475 per semester)

Option 2: Ask an Endorser

You may add a credit-worthy endorser (similar to a cosigner) to your PLUS Loan if you aren't approved on your own credit. An endorser is any credit-worthy person who will sign the MPN with the parent borrower and take on equal liability for the PLUS Loan debt.

Endorser and Borrower Instructions

  • Create and activate a federal PIN.
  • Have the Loan Reference Number or Award ID from the parent borrower on-hand.
  • Log in to StudentLoans.gov and select Endorse Direct PLUS loan.
  • If an endorser is approved, your Direct PLUS loan decision will be overturned from a denial to an approval. The student then becomes ineligible for Option #1: An additional Unsubsidized Stafford Loan. The originally denied parent must also complete a new Parent PLUS MPN. 

Note: The endorser is liable only for the specific loan amount that he or she has agreed to endorse.

If it is determined that the parent has an adverse credit history and obtained an endorser for a Federal Direct PLUS Loan, the Federal Direct PLUS MPN becomes a "single-loan" promissory note. No further Federal Direct PLUS Loans may be made under that Federal Direct PLUS MPN. Further information regarding PLUS loan endorsement can be found online or by calling COD Applicant Services at 1-800-557-7394.

Option 3: Appeal the Credit Decision

You may appeal your credit denial decision with the U.S. Department of Education. If an endorser is approved, your Direct PLUS loan decision will be overturned from a denial to an approval. The student then becomes ineligible for an additional Unsubsidized Stafford Loan. The originally denied parent must also complete a new Parent PLUS MPN. 

Appeal Instructions 

  1. Login to StudentLoans.gov using the parent or graduate borrower's login information and federal PIN.
  2. Select Appeal Credit Decision under the PLUS Loan section on the left side menu.
  3. Follow the instructions to submit your appeal application. An official copy of your current credit report will be required, along with other requested documentation. You may obtain one for free from AnnualCreditReport.com.
  4. The borrower will receive a call from a Federal Loan Origination Center within 3 business days to discuss their appeal. You may also contact COD Applicant Services at 1-800-557-7394 in advance to discuss your appeal status or ask any related questions.

Other Options

  • Another parent of the dependent student may attempt to borrow a Direct PLUS Loan instead of the denied parent borrower. If approved, the student is not eligible for the additional unsubsidized Stafford Loan. 
  • The student can submit an out-of-pocket payment for the balance owed or enroll in a monthly budget plan.
  • The student with access to a willing credit-worthy cosigner can apply for a private loan. Dependent undergraduate students in this situation should still consider the aforementioned options to exhaust their federal loan eligibility first.