Graduate PLUS Loans
Previously available only to parents of undergraduate college students, the Federal PLUS Loan Program, as part of the Federal Family Education Loan Program, has now been expanded to include graduate and professional students, giving those pursuing advanced degrees more options for financing their higher education.
The expansion of the Federal PLUS Loan Program will begin with loans certified by the college on July 1, 2006, at which time students classified at the graduate level by their colleges will be able to borrow Federal PLUS Loans.
Graduate and professional students with no adverse credit history will be eligible to borrow an amount equal to the difference between the cost of attendance and any financial aid (e.g., assistantships, fellowships and/or Federal Stafford loans).
Eligibility for both subsidized and unsubsidized Stafford loans will be determined by the student's completion of the Free Application for Federal Student Aid (FAFSA) before consideration of a PLUS loan.
The interest rate is fixed at 8.5%.
Repayment on the Federal PLUS loan for graduate students will begin within 60 days after the final loan disbursement, although students will be eligible for an in-school deferment. The student is responsible for interest payments during the deferred period.
Credit Criteria
Credit criteria are used for Graduate PLUS Loans. Students with adverse credit cannot be approved for the loan. A Graduate PLUS Loan applicant is considered to have adverse credit if he/she:
- Is 90 days or more delinquent on the repayment of any debt
- Had any debt discharged in bankruptcy any time during the 5 years preceding the date of the credit report
- Has been the subject of a default determination on any debt, foreclosure, tax lien, repossession, wage garnishment or write-off of a Title IV debt any time during the five years preceding the date of the credit report
FAQs
- If I have an adverse credit history, can I use an endorser to obtain a Graduate PLUS Loan?
Any person who is deemed creditworthy based on the above criteria can serve as an endorser for a Graduate PLUS Loan. Lenders develop their own policy about endorsers for Graduate PLUS Loans.
- What fees are assessed on Graduate PLUS Loans?
The fees assessed on Graduate PLUS Loans are the same as undergraduate PLUS Loans—a 3% origination fee that is paid to the federal government.
- How are Graduate PLUS Loan funds be disbursed?
Graduate PLUS Loans can be disbursed in the same ways as other FFELP loans: individual check, electronic funds transfer (EFT) or paper check. If a Graduate PLUS Loan is disbursed by check, it will be made payable to both the school and to the graduate/professional student.
- When do Graduate PLUS Loans go into repayment?
PLUS loans must enter repayment within 60 days of the loan's final disbursement. However, Graduate PLUS Loan borrowers can automatically receive an in-school deferment if they are enrolled at least half-time.
- Do Graduate PLUS Loans have a six-month grace period prior to repayment?
There is no grace period for Graduate PLUS loans.
- What are the repayment terms of Graduate PLUS loans?
Graduate PLUS Loan borrowers are required to pay the interest during the life of the loan (similar to the terms of Stafford Loans). Graduate PLUS Loan borrowers will be allowed to make quarterly interest payments on their loans. The repayment period will generally be five years, not counting any deferment or forbearance periods, but can be up to ten years.
- Can I consolidate my Graduate PLUS Loans?
Graduate PLUS Loans can be included in FFELP and Direct Lending Consolidation Loans.