Federal and private lenders provide loans to students based on income, credit history, student need and tuition fees. Parents with dependents are eligible to take out federal student loans but face stricter borrowing requirements and may have their loan applications denied based on criteria such as employment status or low credit scores. Private lenders may deny students with negative credit histories from receiving student loans. Students who have their loan applications denied can still finance their education through alternate means.

Credit Check

To qualify for federal loans, parents with dependent children must pass a credit check. Depending on the loan provider, students who apply for private loans may also be required to pass a credit check. Applicants with adverse credit histories cannot qualify for most loans. Applicants who receive a notice that their request for a student loan has been denied should check their credit score and review any discrepancies in their credit history. Credit histories that indicate over 90 days of unpaid debt, bankruptcies, foreclosures and wage garnishments are causes for student loan denials. Correcting credit discrepancies or paying outstanding bills can improve an applicant's credit score and the likelihood of qualifying for student loans.

Unsubsidized Loans

An alternative to applying for subsidized, low-interest federal loans is to consider applying for unsubsidized loans. Parents who do not qualify for low-interest federal loans due to a negative credit score may be eligible to apply for unsubsidized federal loans. However, the limit for unsubsidized loans is $5,500 per semester. Any full-time student who has not exceeded the maximum allowable financial aid per year can apply for unsubsidized loans. The interest rate on unsubsidized federal loans is greater than need based student loans or loans for parents with dependent children.

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Applicants with loan denials from national education lenders like Sallie Mae can appeal their loan request. Loan appeals are evaluated on a case-by-case basis. Loan applications that were denied due to cases such as temporary credit issues due to divorce, disputed credit records, medical emergencies or temporary job loss are eligible for reconsideration. Other cases that may be granted an appeal include cases where poor credit scores were outcomes of natural disasters. Under these circumstances, loan applicants can present their case to a financial representative and request an appeal.


Student loan applicants with a negative credit history can have a cosigner take out a loan on their behalf. A cosigner must be creditworthy and accept the responsibility of being able to repay the total debt if a student fails to make the required monthly payments. Cosigners must have excellent credit and a stable work history. Students with creditworthy cosigners qualify for lower interest rates and increase their chances of being approved for a loan.

About the Author

Selam Nuri has been writing academic articles and working across the curriculum since 2001. She has been published online at various websites and earned her Ph.D. in cultural anthropology in 2006 from the City University of New York.