What to Do After Being Denied for a Parent PLUS Loan

What to Do After Being Denied for a Parent PLUS Loan

The parent PLUS loan is a type of federal loan offered through the direct PLUS loans program. Unlike graduate PLUS loans or other types of federal loans, the parent PLUS loan requires a student’s parents to take out the loan and begin payment, so the undergraduate student is not directly responsible for the money.

Parent PLUS loans rely on the parent’s credit score and income. For many parents, the loan may be denied. When you apply for the loan online, you will know almost instantly if you have been turned down.

What should you do if your parent PLUS loan is denied? First, it is important to know that there are several reasons this problem may have occurred. There is an appeals process, and options to reapply for the loan if your child truly needs this money to attend school.

Why Are Parent PLUS Loans Denied?

Parent PLUS Loans are based on the assumption that parents, rather than their soon-to-be-undergraduate children, will have more stable incomes, better credit scores, or less debt. However, this is not always the case. Parents are more likely to have car loans, mortgages, credit card debt, and their own student loans listed on their credit history, which can make it harder for them to qualify for a parent PLUS loan.

A security freeze. With some credit reporting agencies and other major businesses suffering cyber attacks in recent years, many people have placed credit freezes on their reports, so they do not suffer harm from potential identity theft.Seguir leyendo