Don’t Let College Dreams Shatter: Tips to Avoid Loan Denials

White Piece of Paper that Says, "Credit Application" with the word "Denied" written in red on top of it.

Don’t Let College Dreams Shatter: Tips to Avoid Loan Denials

Published November 14, 2023 | Last Updated May 22nd, 2024 at 12:58 pm

White Piece of Paper that Says, "Credit Application" with the word "Denied" written in red on top of it.

Parents of high school seniors, I want to share some advice that could save you from heartbreak in the days leading up to your child’s start of college. Nothing is more disheartening than the scenario I’m about to describe, which unfolds all too often:

The Heartbreaking Scenario:

  • Your child secures admission to a wonderful (albeit expensive) college.
  • You plan to finance it through Plus Loans or private student loans.
  • Shockingly, you and your child get declined for both options.
  • Like heroes, the grandparents agree to take a Parent Plus loan in their name – only to discover the Feds won’t allow them to unless the grandparents legally adopt their grandchild.
  • Desperate, you consider draining retirement accounts, leveraging home equity, or finding additional income sources.
  • Despite your best efforts, it seems impossible to come up with the funds in time for college.
  • You scramble for alternative, late-application colleges and hunt for scholarships, but time is against you.
  • Ultimately, your child’s college dreams shatter, leaving everyone devastated and feeling somewhat ashamed.

The Real-Life Crisis

Believe it or not, this situation happens to real families every year. However, there’s good news: you can take steps now to ensure this doesn’t happen to you, especially if you’re planning to rely on loans for college financing. I won’t delve into alternative options like community colleges; I trust you’ve considered those. Instead, let’s focus on safeguarding your loan plans.

  1. Check Your Credit Report Before you embark on your college financing journey, it’s crucial to take a close look at your credit report. This step is vital in ensuring that there are no surprises or red flags that might jeopardize your eligibility for loans. By examining your credit report thoroughly, you can identify any issues that could potentially lead to loan denials down the road. This proactive approach allows you to address any credit-related concerns well in advance and take corrective measures if necessary.
  2. Plan Ahead for Loan Qualification Timing is essential when it comes to loan applications. Apply for loans as early as possible (Road2College recommends applying for loans 2 – 3 months from when tuition is due, check out this timeline); there’s nothing to be gained by waiting. Fortunately, most individuals qualify for loans, which means the likelihood of being denied is relatively low. By being proactive and initiating the loan application process early, you reduce the risk of encountering unforeseen challenges later on. 
  3. Stafford Loans: A Potential Alternative In the event that Plus Loans are denied, students are eligible for an additional $4000 in Stafford loans. These are federal loans in the student’s name and allow your child to access additional funds, potentially up to $9,500 for their first year of college. Stafford Loans come with several advantages, including lower origination fees, lower interest rates, and even the possibility of loan forgiveness for some borrowers.But if the student happens to also have a 0 Student Aid Index (SAI) – that will add $7,325 in money that doesn’t have to be paid back via the Pell Grant.  Combined, the Stafford Loans and Pell Grant can result in a substantial amount, up to $16,825 annually, to put towards covering college expenses.
  4. Mind the Gap with Scholarships and Need-Based Aid It’s crucial to understand that most colleges do not guarantee that they will bridge the financial gap between your resources and their costs. This means that even if you thought a particular college was affordable, it may remain financially out of reach without other aid in addition to loans. To address this, it’s essential to actively seek out academic merit scholarships and institutional need-based aid. 

Unfortunately, lower and middle income families understand  there WILL BE MANY COLLEGES YOU CANNOT AFFORD. NOT WITHOUT LOANS. Accept this. Know this. Understand this.

Act Now to Avoid Last-Minute Stress

  • Ensure the loans you’re banking on will come through.
  • Look for colleges that align with your budget in case your anticipated funds fall short.
  • Communicate with colleges your child has been accepted to about increasing merit scholarships or offering more need-based aid.
  • Explore side-hustle opportunities to supplement your income for the college’s monthly payment plan.

The Unspoken Reality

One seldom-discussed but harsh truth is that students can unexpectedly find themselves running out of funds and credit while pursuing their college education. The consequences of this financial crisis can be dire, including forced dorm eviction, ceased email communication, the inability to register for classes, and difficulties in transferring to a new college due to unpaid balances. Unfortunately, these situations occur more frequently than one might imagine. 

A Call for Pragmatism

I share this information because each year, countless students face these hardships. It’s more common than you might think. Don’t let it happen to you if you can help it. Even now, there are steps you can take to ensure a viable college financing plan and a contingency strategy.

In summary, have affordable backup colleges, double-check your financing plan, and be ready with alternatives to protect your child’s college dreams from last-minute crises.


Use R2C Insights to help find merit aid and schools that fit the criteria most important to your student. You’ll not only save precious time, but your student will avoid the heartache of applying to schools they aren’t likely to get into or can’t afford to attend.  

👉 Looking for expert help on the road to college? See our Preferred Partner List!

Other Articles You Might Like:

Student Loan Advice

EFC Guide: What It Is, How to Calculate It, and Its Role in Paying for College

How to Avoid Student Loans: How Parents Can Help




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