When you apply for a Direct PLUS Loan, the U.S. Department of Education will check your credit history. Applicants may be denied a Federal PLUS Loan due to adverse credit, which is defined as:

  • The applicant has been subject to a default, tax lien, write-off of an educational debt, bankruptcy discharge, foreclosure, repossession, or wage garnishment during the previous five years.
  • The applicant is delinquent on the repayment of any debt.

In some cases, an applicant may appeal an adverse credit determination or may seek an endorser.

Additionally, if a parent is denied a PLUS loan due to adverse credit, the dependent student may be able to borrow additional unsubsidized Federal Stafford Loan funds (see limits for independent students). Contact your school's financial aid office for more information about this option.