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Will a Parent PLUS Loan be Denied When Applying for Two Loans for Two Children?

Mark Kantrowitz

August 13, 2012

I am applying for two Parent PLUS loans because I have twins going to school at the same time. Is it possible one loan will be denied because we are applying for two at the same time? What can I do if one of the applications is denied? We have good credit 730 and 780 for each of us. — Michelle L.

Parents who have multiple children in college are not limited to borrowing just one Parent PLUS loan. Each Parent PLUS loan is for the benefit of a single student. If there are multiple children in college at the same time, the parent can borrow multiple Parent PLUS loans, one for each child. The second Parent PLUS loan promissory note will not be rejected, so long as it lists a different student’s name, Social Security number and date of birth. Twins might have the same date of birth, but their names and Social Security numbers will be different.

Only one parent can be listed as a borrower on a single Parent PLUS loan. However, two parents can each apply for separate Parent PLUS loans for a single child, so long as the combined loan amounts do not exceed the annual limit. The annual PLUS loan limit is equal to the cost of attendance minus other aid received. When there are two children in college, it is also possible for one parent to apply as the borrower on a Parent PLUS loan for one child and the other parent to apply as the borrower on a Parent PLUS loan for the other child.

When both parents are applying for Parent PLUS loans, it is possible that one loan will be approved and the other loan will be denied if one parent has good credit and the other has an adverse credit history. Approval does not depend on the number of Parent PLUS loans, but rather on the credit history of each borrower.

The borrower of a PLUS loan must not have an adverse credit history. An adverse credit history occurs when the borrower has a 90-day or longer delinquency on any debt or has had a bankruptcy discharge (chapters 7, 11 or 12), foreclosure, repossession, tax lien (federal, state or county), wage garnishment, default determination or student loan default within the last five years. Parent PLUS loan borrowers also cannot be incarcerated. Starting on October 22, 2011, an adverse credit history also includes having a charged-off account or an account in collections with a balance greater than zero within the last five years.

Eligibility for the Parent PLUS loan does not depend on the borrower’s debt-to-income ratios or the borrower’s credit scores. But generally, having a very good credit score is usually a good sign that the borrower doesn’t have an adverse credit history, since even a single delinquency can cause the credit score to plummet.

If a parent is denied a Parent PLUS loan, the student will become eligible for increased unsubsidized Stafford loan limits, the same limits available to independent students. However, if both parents apply for Parent PLUS loans and one parent is approved and one is denied, the student is not eligible for the increased unsubsidized Stafford loan limits.


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