FAFSA Parent PLUS loans showing on parent's credit report - can we prevent this?

Parent PLUS loans will 100% show up on YOUR credit report and not your daughter's. That's just how they work - the parent is the legal borrower, not the student. There's no way around this unfortunately. If you're looking to avoid impacting your credit, your daughter would need to take out private student loans in her own name (but she'd probably need you as a cosigner anyway, which STILL affects your credit).

I was in the SAME exact situation last year!!! Parent plus loans show on YOUR credit not your kids. it SUCKS!!!! i cosigned a private loan for my son instead and my credit still took a hit anyway. Cant win with these stupid loans tbh. Some private lenders might give better rates than Parent PLUS tho so check those out mayb???

my sister had her daughter take out private loans in the daughters name only. no parent on the loan at all. but she had to have like a 700+ credit score to qualify. might be worth looking into if your daughter has established credit.

One option nobody mentioned yet - have you looked into Federal Direct Loans (subsidized and unsubsidized) for your daughter first? These are in HER name, not yours, and have lower interest rates than Parent PLUS loans. The limits are lower ($5,500 for first-year dependent students), but it's a start without impacting your credit. Then you could potentially do a smaller Parent PLUS loan to cover the remaining gap.

Have u tryed calling the FAFSA ppl? Maybe they can give u options that arent on there website. I spent 3 weeks trying to get thru to them for my sons verification issue and when I finaly did they told me stuff that wasnt anywere online.

One important thing to understand: Parent PLUS loans can be transferred to your daughter after graduation through a process called refinancing with a private lender. Companies like SoFi, Earnest, and CommonBond offer this option. However, this doesn't help with your immediate concern about getting a mortgage, as the refinancing would happen years from now. For your current situation: 1. The Parent PLUS loan will count in your DTI ratio for mortgage purposes 2. Lenders typically calculate the monthly payment amount (not the total loan) in your DTI 3. Some mortgage programs allow you to exclude student loan payments if they're in deferment for at least 12 months You might want to speak directly with a mortgage lender about how they'll treat Parent PLUS loans in your specific situation. Some are more flexible than others.

Something else to consider - many schools have payment plans that let you spread the cost over 10-12 months instead of paying each semester. This might help reduce how much you need to borrow. And if you're concerned about your credit for a house purchase, remember that mortgage lenders care most about your credit score (which Parent PLUS loans don't usually hurt much if payments are made on time) and your DTI ratio (which Parent PLUS loans definitely affect).

I'm in a similar situation with my son starting college next year and worried about the impact on our mortgage plans. One thing I discovered that might help is looking into state-specific financial aid programs - many states have additional grant programs that aren't automatically included in your FAFSA package. Also, some employers offer tuition assistance or scholarships for employees' children that you might not be aware of. It's worth checking with your HR department. Finally, I've heard that some credit unions offer education loans with better terms than traditional banks, and they might be more flexible about how they structure the loan to minimize impact on your credit. Have you looked into any of these options yet?

I went through this exact same situation two years ago when my daughter started college. You're absolutely right to be concerned about the impact on your mortgage application - Parent PLUS loans will definitely show up on your credit report and affect your debt-to-income ratio. What helped us was timing the loan disbursement strategically. Since Parent PLUS loans are typically disbursed at the beginning of each semester, we waited until after our mortgage application was approved to take out the first loan. This gave us time to close on our house without the additional debt showing up. Also, make sure to shop around for mortgage lenders - some are more flexible about how they calculate student loan payments in your DTI ratio. Some will use the actual monthly payment amount while others use a percentage of the total loan balance. It's definitely worth having that conversation with multiple lenders before you apply.

I'm a first-time parent going through this process and this thread has been incredibly helpful! One thing I wanted to add based on my research - if you're really concerned about the Parent PLUS loan impact on your mortgage, you might also want to consider having your daughter take a gap year to work and save money, then reapply for financial aid the following year. Sometimes family financial situations change (income decreases, siblings start college, etc.) which can result in better aid packages. I know gap years aren't ideal for everyone, but it could potentially save you from taking on debt that might complicate your home purchase plans. Also, she could use that year to apply for more scholarships - there are tons of scholarships specifically for students who are taking gap years or starting college later. Just another option to consider if the debt-to-income ratio is really going to be an issue for your mortgage timeline.

You're absolutely right to be concerned about gap year earnings affecting financial aid! Student income does impact aid calculations, but there are some important nuances to consider. For the 2025-26 FAFSA, students have an income protection allowance of around $7,600 - meaning earnings below this amount typically won't hurt aid eligibility. Anything above that gets assessed at about 50% for aid calculations. However, if your daughter works and saves strategically (like putting money into a 529 plan owned by you as the parent), it can actually help reduce the impact. Also, many families find that the trade-off is still worth it - even if she loses some aid due to gap year earnings, the money she saves combined with additional scholarship opportunities often outweighs the aid reduction. Plus, she'd be starting college with work experience and potentially clearer career goals. But you're right that timing is everything - since you're already committed for this fall, this might be more relevant for other families reading this thread who are still in the planning stages.