Endorse a PLUS Loan: What It Means & How to Do It

#1 Student loan lawyer

Updated on August 29, 2023

You may need to endorse a Grad PLUS or Parent PLUS Loan to help a student or parent pay for the cost of attendance if a credit check reveals the loan applicant has an adverse credit history.

An endorser is like a cosigner on a private student loan – they agree to repay the debt if the student or parent borrower falls behind on their monthly payment. But unlike private lenders, the U.S. Department of Education offers a unique path to easily releasing endorsers: loan consolidation.

Parent PLUS Loans assist parents of undergraduate students, while Grad PLUS loans cater to graduate students. Origination fees apply, and interest begins to accrue upon disbursement.

But what exactly does being an endorser entail? And why is this endorsement necessary?

Ahead, we’ll answer those questions and more.

What is an Endorser for PLUS Loans?

An endorser takes on the responsibility of paying back a Direct PLUS Loan if the borrower cannot pay. Think of them like a cosigner. You can add an endorser to both Parent PLUS Loans and Grad PLUS Loans, especially when the borrower has a bad credit history and can’t get the loan by themselves.

Can You Get a Federal Plus Loan Co-signer (Endorser) Release?

No, once someone becomes an endorser, they stay responsible for the loan until it’s entirely paid off, consolidated, or refinanced.

But here’s some good news: The endorser can be easily removed if the loan is eligible for consolidation.

There’s no need to worry about income or credit score requirements since there’s no credit check needed to do a Grad or Parent PLUS Loan Consolidation.

Can You Still Get PLUS Loans Deferred with an Endorser?

Yes, having an endorser doesn’t stop you from deferring a Parent PLUS loan. You can defer Parent PLUS Loans while the student is enrolled at least half-time, and for six months after graduation or dropping below half-time. To defer:

  • Fill Out an Application: Complete and send it to your loan servicer.

  • Consider Interest: Know that interest builds up during deferment and gets added to your balance later. That means you’ll pay more over time.

How Can You Endorse a Grad or Parent PLUS Loan?

Anyone, from grandparents to friends, can endorse a PLUS Loan if they are a U.S. citizen, permanent resident, or eligible noncitizen without bad credit events like tax liens or bankruptcy. But a student cannot endorse their parent’s loan.

Here’s how to endorse a Grad or Parent PLUS Loan:

  1. Get the Application ID Number: It’s sent to the borrower after credit denial. The endorser will need this.

  2. Create an FSA ID for the Endorser: If it’s not already set up, make a Federal Student Aid ID on the official website.

  3. Log In and Endorse the PLUS Loan: Use the FSA ID to log in, click on “Endorse a PLUS Loan,” and fill in the needed details.

  4. Complete the Endorser Addendum: This includes the terms of the agreement the borrower signed. The endorser and borrower must agree to the terms laid out in the Master Promissory Note (MPN). You can do this on StudentAid.gov.

  5. Inform the School: Let the school’s Financial Aid Office know so they can move forward with the loan process.

Related: Maximum Parent PLUS Loan Amount

How to Get an Endorser Code to Endorse a PLUS Loan

If you’re looking to get an endorser code for a Parent PLUS Loan, the process starts with the borrower, usually the parent.

Here’s how it works:

  1. Apply for the Loan: The parent applies and gets a credit denial.

  2. Receive an Application ID Number: This is given to the borrower after denial, and the endorser will need it to back the PLUS Loan.

How Long Does It Take to Add an Endorser?

The time to get a Parent PLUS loan with an endorser can differ based on various factors. Here’s a general idea:

  • Completing the Endorser Addendum: Most people finish this in 30 minutes or less.

  • Loan Processing Time: It typically takes about 3-5 days for the funds to reach the student’s account.

Remember, these times can change based on individual situations and the particular school’s financial aid office processing speed. Always check with the specific institutions involved for the most accurate information.

Can you Change to a Direct Consolidation Loan if Your Parent Plus Loan Has a Co-Signer?

Yes, you can make this change, and here’s how:

  • Eligibility: Parent PLUS loans with a co-signer, or endorser, can be consolidated into a Direct Consolidation Loan.

  • Benefits: By doing this, you might access income-contingent repayment (ICR), potentially lowering your monthly payments.

  • Drawbacks: Know that consolidation may lead to the loss of certain benefits, like interest rate discounts.

  • How to Apply: You can fill out an application online or send a paper application by mail. Your loan must be in repayment or in the grace period to qualify.

Can I Get More Federal Student Loans If My Parent Can’t Get an Endorser for a Parent PLUS Loan?

In situations where a parent’s credit is denied, or an eligible endorser is unavailable, additional options arise:

  • Consideration as an Independent Student: The student may be treated as independent for loan purposes only, increasing eligibility for Federal Direct Unsubsidized Loan.

  • Additional Borrowing for Education Costs: Though likely less than the PLUS, this can help the student with educational expenses.

  • Increase Limits: Freshmen and sophomores may receive up to $4,000 more, while juniors and seniors may get up to $5,000 extra. These increases are unavailable if a parent passes the credit check or an endorser is approved through the PLUS credit check process.

This information should provide you with a clear understanding of these aspects of the student loan process. Please consult the school’s financial aid office or FAFSA’s help center for specifics tailored to your situation.

Can You Add a Cosigner to a Parent PLUS loan?

Yes, you can add an endorser (similar to a cosigner) if your PLUS Loan application is denied. Here’s how the endorser process works:

  • Finding an Endorser: You can ask someone with better credit to endorse your application. They agree to repay the Direct Parent PLUS Loan if you cannot.

  • Without an Endorser: If you don’t have access to an endorser, you can appeal a denial. You’ll need to show that extenuating circumstances caused the denial.

Can You Get a Cosigner for a Grad PLUS Loan?

Yes, if needed, you can apply with an endorser for a Grad PLUS Loan. The endorser will be responsible for the loan if you fail to make the monthly payments or default.

Related: Student Loan Cosigner Rights

Can a Parent Endorse a Grad PLUS Loan?

Yes, a parent can endorse a graduate PLUS Loan.

Here’s what you need to know:

  • The endorser agrees to repay the Grad PLUS Loan if the borrower defaults on the loan.

  • To endorse, the endorser needs the Endorser Code or Award Identification Number from the student. They must then complete an Endorser Addendum online through the Federal Student Aid website.

Can Parents Apply for a Grad PLUS loan?

No, parents cannot apply for a Grad PLUS loan for their child. Here’s a breakdown:

  • Grad PLUS Loans: These are specifically for graduate and professional students, helping them cover educational costs.

  • Parent PLUS Loans: Parents can apply for Parent PLUS loans for their dependent undergraduate children. This is separate from Grad PLUS loans and not applicable to graduate students.

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