Can anyone explain PLUS loan endorsers when parents have bad credit?

Yes, an endorser for a Parent PLUS loan is essentially a co-signer who agrees to repay the loan if you can't. The endorser doesn't have to be the student's parent, but they do need to pass the credit check. Your sister could potentially be an endorser if she has good credit and is willing to take on that responsibility. Keep in mind that she would be legally obligated to repay the entire loan if you default, so it's a big ask. Alternatively, if you're denied for the PLUS loan due to adverse credit history, your daughter may automatically become eligible for additional unsubsidized federal student loans in her own name, which might be worth exploring.

we went thru this last yr with my son. got denied for parent plus and then he got offered like $4000 more in unsibsidized loans. it wasnt enough tho so we had to find an endorser for the plus loan anyway. my brother did it for us. the whole thing is a NIGHTMARE and takes forever!! start the process EARLY

To answer your questions about endorsers: 1. There's no specific income requirement for endorsers, but they do need to pass the credit check, which looks at adverse credit history rather than income. 2. For the additional unsubsidized loans, if you're denied a Parent PLUS loan, your daughter's school will be notified, and the financial aid office should automatically process the additional unsubsidized loan eligibility. The amount is typically up to $4,000-$5,000 depending on her year in school. 3. The endorser process requires the endorser to complete an Endorser Addendum online and undergo a credit check through StudentAid.gov. They'll need an FSA ID and will have to provide financial information. 4. Important note: If you use an endorser, both you (the parent borrower) and your endorser will need to complete PLUS credit counseling on StudentAid.gov. If you're struggling to reach the financial aid office, I'd recommend checking their online resources or trying to schedule a virtual appointment rather than waiting for an email response.

didn't u fill out the FAFSA? I thought they got rid of the EFC and now use SAI or something?

Just wanted to add something important that often gets overlooked - if you do get denied for the Parent PLUS loan and decide to pursue getting an endorser, both you AND the endorser will need to complete entrance counseling on StudentAid.gov. It's not difficult, but it takes about 30 minutes to complete and is required before the loan can be disbursed. Also, the endorser's liability is limited to the specific loan they endorse. So if you need Parent PLUS loans for multiple years, you'd need your sister to complete the endorser process each year (or find different endorsers). Lastly, make sure to check if your daughter's school offers any additional institutional aid for students who were denied Parent PLUS loans. Some schools have emergency funds or supplemental scholarships for these situations that aren't widely advertised.

Is nobody going to address the fact that the financial aid system is COMPLETELY BROKEN??!! They expect parents to take out massive loans regardless of their financial situation, and then act surprised when people can't afford college. My daughter's SAI was ridiculous too even though we're barely keeping up with bills. The whole system is designed to force families into debt. Honestly, look into community college for 2 years and then transfer - that's what we ended up doing after the PLUS loan nightmare.

Update: We spoke to a financial aid counselor today (finally!) and she explained that we have two options after being denied for the PLUS loan: 1) Find an endorser, or 2) Document extenuating circumstances for our adverse credit history. We're going to try option 2 first since our credit issues were due to medical expenses. Apparently you can submit documentation showing that the adverse credit was due to circumstances beyond your control. If that doesn't work, we'll go the endorser route. Thank you everyone for your advice!

Just a personal experience to add - my parents were in a similar situation (bad credit, denied PLUS loan). My uncle ended up being my endorser for all four years. The process gets a bit easier after the first year because you're all familiar with it. The main challenge is that the endorser has to be willing to do this every year, not just once. Each year is considered a new loan with a new credit check and endorser process. Keep that in mind when making plans!

One more option to consider - if your daughter is denied the additional federal loans she needs, she might qualify for private student loans with a cosigner who has good credit. Sometimes the interest rates can be competitive with federal loans, especially if the cosigner has excellent credit. Just be aware that private loans don't offer the same repayment flexibility and forgiveness options as federal loans do. Still, it's worth exploring all your options if the federal route doesn't provide enough funding.

As someone who just went through this process last year, I wanted to share a few additional tips that might help. First, if you do go the extenuating circumstances route for medical bills, make sure to include any correspondence with insurance companies and documentation showing you attempted payment plans. The Department of Education looks favorably on situations where you tried to resolve the debt responsibly. Also, something I wish I had known earlier - if your daughter's school participates in it, look into the Federal Work-Study program if she hasn't already. It won't cover a huge amount, but every bit helps, and the income from work-study jobs doesn't count against her for next year's financial aid calculations. One last thing - don't forget to check if your state has any need-based grant programs that might still be available. Some states have rolling deadlines or emergency funds specifically for families in situations like yours. Your daughter's financial aid office should have information about state programs, but you can also check your state's higher education website directly. Wishing you the best of luck with the appeals process!

Just wanted to add my experience to this incredibly helpful thread! We went through the PLUS loan denial and endorser process last year for my son. One thing I learned that might help others - if you do end up needing an endorser, make sure to have a backup plan because the credit check for endorsers can sometimes reveal issues that weren't apparent beforehand. My brother initially agreed to be our endorser but ended up not passing the credit check due to some old collection accounts he didn't even know about. We eventually found success with my mother-in-law as the endorser, but the whole process took about 6 weeks from start to finish, which was way longer than we expected. The school was understanding about the delayed loan processing, but it definitely added stress to an already overwhelming situation. For anyone considering the endorser route - make sure your potential endorser checks their credit report first through annualcreditreport.com before agreeing to help. It can save everyone time and disappointment if there are unknown issues that would prevent approval. The credit counseling requirement for both borrower and endorser was also more time-consuming than expected, so factor that into your timeline as well.