What happens when the PLUS loan is denied?
If a parent is denied a PLUS loan, the student/family may consider other options. A different parent may apply for a PLUS loan, the parent may get an endorser or, more typically, the school may certify additional Stafford loans for the student. The law allows for the annual and aggregate loan limits for independent students to be applied to dependent undergraduate students whose parents are unable to borrow PLUS loans due to exceptional circumstances. Exceptional circumstance examples include adverse credit history, income limited to public assistance and disability benefits, incarceration, and parents’ whereabouts unknown.
