Graduate and professional degree students are currently eligible to borrow under the PLUS Loan Program up to their cost of attendance minus other estimated financial assistance in both the FFEL and Direct Loan Program. The terms and conditions applicable to Parent PLUS Loans also apply to Graduate/Professional PLUS loans. These requirements include a determination that the applicant does not have an adverse credit history, repayment beginning on the date of the last disbursement of the loan, and a fixed interest rate of 8.5 percent in the FFEL program and 7.9 percent in the Direct Loan program. Applicants for these loans are required to complete the Free Application for Federal Student Aid (FAFSA). They also must have applied for their annual loan maximum eligibility under the Federal Subsidized and Unsubsidized Stafford Loan Program before applying for a Graduate/Professional PLUS loan.
For a FFEL Grad Loan, you must complete and submit a PLUS Loan application, available from your school, lender, or your state guaranty agency. After the school completes its portion of the application, it must be sent to a lender for evaluation.
For a Direct Grad Loan, you must complete a Direct PLUS Loan application and promissory note, contained in a single form that you get from your school’s financial aid office.
Also, you will be required to pass a credit check. If you don't pass the credit check, you might still be able to receive a loan if someone, such as a relative or friend who is able to pass the credit check, agrees to endorse the loan. An endorser promises to repay the loan if you fail to do so. You must also meet other general eligibility requirements for federal student financial aid.
The yearly limit on a PLUS Grad Loan is equal to your cost of attendance minus any other financial aid you receive. If your cost of attendance is $6,000, for example, and you receive $4,000 in other financial aid, your parents can borrow up to $2,000.
Either the U.S. Department of Education (for a Direct Grad PLUS Loan) or your lender (for a FFEL Grad PLUS Loan) will send the loan funds to your school. Your school might require you to endorse a disbursement check and send it back to the school. In most cases, the loan will be disbursed in at least two installments, and no installment will be greater than half the loan amount. The funds will first be applied to your tuition, fees, room and board, and other school charges. If any loan funds remain, you will receive the amount as a check or in cash, or it may be put into your school account. Any remaining loan funds must be used for your education expenses.
For Grad PLUS Loans disbursed on or after July 1, 2006, the interest rate is fixed (at 7.90 for Direct Grad PLUS Loans and 8.50 percent for FFEL Grad PLUS Loans). Interest is charged on a Grad PLUS Loan from the date of the first disbursement until the loan is paid in full.
You will pay a fee of up to 4 percent of the loan, deducted proportionately each time a loan disbursement is made. For a FFEL Grad PLUS Loan, a portion of this fee goes to the federal government, and a portion goes to the guaranty agency (the organization that administers the PLUS Loan Program in your state) to help reduce the cost of the loans. For a Direct Grad PLUS Loan, the entire fee goes to the government to help reduce the cost of the loans. Also, you may be charged collection costs and late fees if you don’t make your loan payments when scheduled.
Under certain circumstances, you can receive a deferment on your loans.
If you temporarily can’t meet the repayment schedule, you may also receive forbearance on your loan, as long as it isn’t in default. During forbearance, your payments are postponed or reduced. Forbearances are not an entitlement and are granted at your lenders discretion.
Generally, the conditions for eligibility and procedures for requesting a deferment or forbearance apply to both Stafford Loans and Grad PLUS Loans. However, since all Grad PLUS Loans are unsubsidized, you will be charged interest during periods of deferment or forbearance. If you don’t pay the interest as it accrues, it will be capitalized (that is, added to the principal amount of the loan, and additional interest will be based on that higher amount).
- You may be eligible for a Graduate PLUS loan if you are enrolled in school at least half time.
- A credit check is required.
- You must be a U.S. citizen or national, a U.S. permanent resident, or an eligible non-citizen.
- You must submit a FAFSA form.
- There is no prepayment penalty.
- There are no income or collateral requirements.
- Interest may be tax-deductible.
- You may apply for a Grad PLUS loan to pay for you Graduate higher-education-related expenses The Grad PLUS Loan allows graduate students to borrow the total cost for their graduate school needs, including tuition, room and board, supplies, lab expenses, and travel, less any other aid.
- You must be a U.S. citizen or national, a U.S. permanent resident, or eligible non-citizen.
- A credit check is required.
- There is a 3% origination fee charged by the federal government. Up to a 1% federal default fee is also charged.
Interest
The interest rate for a FFEL Grad PLUS loans first disbursed on or after July 1, 2006 is fixed at 8.5%, and it is 7.9% for a FDLP Grad PLUS loan.
Please note: July 1, 2010 all federal loans must be originated through the Federal Direct Loan Program.