Worried that bad credit will stop you from getting a Parent PLUS Loan? You’re not alone. Many parents face challenges securing student loans, but the good news is that options are available—even with an adverse credit history.
In this guide, we’ll walk you through everything you need to know about Parent PLUS Loan credit requirements and how you can still qualify—even if your credit isn’t perfect.
How Do Parent PLUS Loans Work?
Parent PLUS loans are a type of federal student loan that parents can get and use to pay for their child’s education.
Borrowing limits and costs
Like other student loans, there are limits on how much money a parent can borrow using a parent PLUS loan. Parents can get loans for up to the college’s total cost of attendance, minus any financial aid that the student they are borrowing for receives. This includes financial aid in the form of scholarships, grants, and loans given directly to the student by the government.
For example, if a school’s cost of attendance is $40,000 and the child receives a $20,000 scholarship and $10,000 in federal loans, their parent can borrow a maximum of $10,000 through a Parent PLUS loan.
You are not obligated to borrow the full amount offered by a parent PLUS loan. You can choose to refuse some or all of the loan amount offered.
The interest rate on parent PLUS loans varies over time and is based on market interest rates. The interest rate for loans disbursed between July 1, 2024, and June 30, 2025 is 9.08%.
On top of the interest, parents must pay an origination fee when they receive the loan. This fee also changes from year to year. The fee for loans disbursed is 4.228%
Parents can apply for PLUS loans each year their child is in school. However, with high interest rates and significant origination fees, it is also worth checking available rates on private student loans, depending on your or a cosigner’s credit score.
Payments
Taking on a loan means repaying that loan; parent PLUS loans are no different. Like federal loans for students, some things make PLUS loans different from other types of loans.
One is that parent PLUS loans are eligible for deferment. You can avoid making payments on your PLUS loan for as long as your child remains enrolled in school at least half-time. Your first payment will be due six months after your child leaves school.
During a deferment, interest continues to accrue on the loan, which means its balance will grow.
If you do not request a deferment, you’ll have to start making monthly payments immediately after the government disburses the loan. Your loan servicer will contact you with information, such as when your first payment is due and how you should submit payment.
Repayment terms
Parent PLUS Loan repayment starts six months after your child leaves school. You can choose from three main repayment plans:
- Standard Repayment: Fixed payments, 10-year term
- Graduated Repayment: Payments start low and increase over 10 years
- Extended Repayment: Fixed or graduated payments over 25 years (for loans $30,000+)
- Income-Contingent Repayment (ICR): Payments are 20% of discretionary income (or a 12-year fixed plan), with forgiveness after 25 years. To qualify, Parent PLUS Loans must first be consolidated into a Direct Consolidation Loan.
Under the Standard Repayment Plan, parents make fixed payments of at least $50 each month to pay down their debt. Under this plan, the payment is set so that the parent will pay off the debt in no more than 10 years.
The Graduated Repayment Plan starts with low payments and increases them over time. Every two years, the monthly payment will increase. The payment will never be less than the amount of interest that accrues each month or more than triple the lowest payment you’ve had to make.
This plan is designed for parents with low incomes but who expect their incomes to increase over time. Under this plan, parents repay their loans within 10 years.
The Extended Repayment Plan is available to parents with at least $30,000 in direct government loans. You can sign up for flat or graduated monthly payments and repay the debt over up to 25 years.
Parents can also consolidate their PLUS loans using a Direct Consolidation Loan, making them eligible for ICR. Under this plan, parents will pay 20% of their discretionary income or the amount it would take to repay the debt in 12 years, whichever is less. After 25 years, the parent can apply for student loan forgiveness.
Parent PLUS loan eligibility and credit history
Credit Score Needed for a Parent PLUS Loan
There is no minimum credit score required for a Parent PLUS Loan. However, borrowers cannot have an adverse credit history as defined by the U.S. Department of Education.
What Counts as “Adverse Credit History”?
The U.S. Department of Education considers your credit “adverse” if you:
- Have more than $2,085 in delinquent debt (90+ days past due)
- Have debts sent to collections or written off in the past two years
- Have had major financial issues in the past five years, such as:
- Bankruptcy
- Foreclosure
- Default determination
- Repossession
- Wage garnishment
- Tax liens
Correct errors in your credit report
Don’t wait to find out whether you have an adverse credit history by applying for a Parent PLUS loan. Check your credit report in advance. You are entitled to receive a free copy of your credit report at annualcreditreport.com every 12 months from Equifax, Experian, and TransUnion, the three national credit reporting agencies.
Carefully review your credit report for derogatory marks. These marks will determine if your credit history is adverse or not. If you see any derogatory marks you believe were made in error, you can dispute those errors with the credit reporting companies. This can take some time, so get a copy of your credit report to prepare for Parent PLUS Loan filing deadlines.
If you have a low FICO credit score but do not have any of the adverse credit criteria, you are eligible for a Parent PLUS loan. The Parent PLUS loan does not depend on credit scores or debt-to-income ratios.
How to get a Parent PLUS student loan with bad credit
If you do have an adverse credit history, there are several steps you can take to still qualify for a Parent PLUS loan.
1. Repair your credit
Bad credit does not have to be permanent. If possible, you can make payments on delinquent accounts and bring them up-to-date, curing the delinquency. Afterward, your credit score may still be low, but you might no longer have bad credit, and you may qualify for a student loan.
2. Appeal the adverse credit history determination
The events that lead to adverse credit can be beyond your control. If there are extenuating circumstances, you may be able to appeal the determination of the adverse credit history. Extenuating circumstances can include errors in your credit report that don’t accurately reflect the resolution of derogatory marks.
For example, if your debt was paid in complete or satisfactory repayment arrangements have been made, the debt was included in a Chapter 13 bankruptcy, the debt was refinanced, or the debt was assigned to your ex-spouse in the divorce decree, and this isn’t reflected in your credit report, you can appeal the adverse credit determination.
If any of these circumstances apply, gather any relevant documentation relating to the extenuating circumstances that led to the adverse credit history. The U.S. Department of Education will then decide about your eligibility.
3. Find an endorser
If you cannot appeal the adverse credit determination or repair your credit, you can use an endorser. An endorser, much like a cosigner, agrees to repay the Parent PLUS Loan if you cannot do so.
Endorsers must undergo a credit check and cannot have an adverse credit history. The endorser cannot be the child on whose behalf the Parent PLUS Loan is borrowed.
If you do gain eligibility through the appeals process or with the help of an endorser, you will need to take one more step, PLUS Loan Credit Counseling, before securing the loan.
Other Loan Options for Parents with Bad Credit
If you’re a parent with poor credit and cannot qualify for parent PLUS loans, there are other ways that you can help pay for your child’s education.
Private student loans
Parent PLUS loans come from the federal government, but they aren’t the only type of student loan available for parents. Many private lenders will let parents borrow money to help pay for their children’s education. You may even find one that offers student loans for parents with bad credit.
However, unlike federal loans, private student loans don’t qualify for loan forgiveness, and other benefits, like deferment and forbearance options, are often less generous.
Private student loans also tend to be more expensive, charging higher fees and higher interest rates than government loans. This will be especially true if you have a poor credit score. You may struggle to qualify, and the loan will have a significantly higher interest rate than a Parent PLUS Loan.
Secured loans
One popular strategy for people who need to borrow money but have poor credit is to take out a secured loan.
A secured loan, such as a home equity loan, is any loan that has some form of collateral securing the debt. For example, when you get a mortgage to buy a home, the home serves as collateral for the debt. If you fail to make your monthly payments, the lender can foreclose on your home and sell it off to recover the money it lost. If you stop making payments on a car loan, the lender can repossess the car.
Unsecured debt has no asset serving as collateral, which means that the lender can’t foreclose on anything and repossess it if you stop making payments. This makes unsecured debt much riskier for lenders.
Because of the lower risk, secured loans are often easier to qualify for than unsecured loans. Even if you have a poor credit score, you may be able to use a home equity loan or another secured loan to borrow money to pay for your child’s education.
Secured loans also tend to have lower interest rates than unsecured loans, which is another reason they’re popular with borrowers.
For borrowers, getting a secured loan means you’re taking on more risk. For example, if you stop making payments on a home equity loan that you’re using to pay for college, the lender can foreclose on your home. You must also repay the loan if you want to sell your home.
Help your student reduce costs or find other funding
Student loans are a popular way to pay for college, but there are other ways to reduce costs. Here are some ways to cut costs if you cannot find student loans for parents with bad credit.
One way parents can help their children pay for college or save money is to let them live at home while taking classes. Room and board at school can be very expensive, so if a child attends a school near home, living at home can save thousands of dollars each year.
The student can still get involved with campus life by joining clubs, attending sporting events, and hanging out around campus, but saving on room and board can save parents from having to get Parent PLUS Loans in the first place.
Parents can also work to help their children find other school funding sources. There are thousands of scholarships and grants that students can apply for. Parents should keep an eye out for these opportunities. Many local community organizations offer small scholarships to local students. Even if the award is a few hundred dollars, every bit helps.
Anything that parents can do to help their children earn money to reduce college costs can help, even if they can’t afford tuition using a Parent PLUS Loan.
Conclusion
A college education is a good way to set your kids up for success in the future, but it’s expensive. Many parents want to help pay for college, but it can be difficult if you have adverse credit. But you may have some luck finding student loans for parents with bad credit.
If you have bad credit and need a Parent PLUS Loan, follow these steps:
- Step 1: Check your credit report for errors (AnnualCreditReport.com)
- Step 2: If you have adverse credit, consider an endorser or credit appeal
- Step 3: Compare private loan options to see if they offer better rates
- Step 4: Explore alternative funding, like scholarships, grants, or work-study
See also: Complete Guide to Parent Loans
