#graduate student loans
Direct PLUS for Grad Students
Graduate and professional students can borrow under the Direct PLUS Loan for Graduate and Professional Students Program. As of July 1, 2010 all federal student loans including the Grad PLUS loan are provided exclusively by the federal government through the Direct Loan Program.
Borrowing Process for Grad PLUS Loans
The terms and conditions applicable to Direct PLUS Loan for Parents also apply to Graduate PLUS loans. Like the Parent PLUS loan, the same federal credit requirements apply. The student must meet other criteria as well. Repayment begins within 60 days after the loan is fully disbursed. If you are still enrolled at least half-time you will automatically be placed in deferment although interest will accrue. If you wish to begin repayment immediately, contact your servicer. The loan carries a fixed rate of 7.21% for Direct loans with a 4.288% fee deducted at issuance of the loan. The standard repayment term is 10 years, but can be up to 25 years depending on if the borrower is eligible for the extended repayment plan.
In order to receive a Graduate PLUS Loan, you must first complete the Free Application for Federal Student Aid (FAFSA) and must apply for the maximum annual limit of Direct Unsubsidized Loan.
You may borrow up to your cost of attendance (determined by your graduate or professional school) minus other financial aid including other student loans.
Grad PLUS Loans carry a fixed interest rate of 7.21% for loans disbursed between July 1, 2014 and June 30, 2015.
Private Student Loans
Because of the low interest rate environment, students with very strong credit profiles may want to consider the option of a private loan instead of Grad PLUS if they are comfortable with variable rates or if they plan to repay their loan in a short period of time. When considering a private student loan, remember that federal loans have more borrower-friendly terms for repayment, consolidation and bankruptcy and in most cases, should be the first choice when it comes to financing an education.
There is a 4.288% origination fee charged for Grad PLUS Loans disbursed after December 1, 2013 and before October 1, 2014. Loans dibursed on or after October 1, 2014 and before October 1, 2015 will have a 4.292% fee. The fee is deducted from the amount borrowed. For example, if you borrow $10,000, the amount sent to your school would be $9,517.20.
Grad PLUS loans are automatically put into deferment while you are enrolled at least half time and for six months after you cease to be enrolled at least half time. If you wish to begin making payments, you can contact your servicer and let them know. The earliest payment would be required is after the entire loan has been fully disbursed.
The standard repayment term is ten years. However, depending on the total amount borrowed, the repayment term can be extended up to 25 years for borrowers eligible for the Extended Repayment Plan. You can review all available options at our Federal Student Loan Repayment Plans page.
If extenuating circumstances develop during repayment, a borrower may request forbearance (temporary suspension of repayment). In addition, there are federal deferment options available as well. During forbearance or deferment, the borrower does not have to make payments, but interest does continue to accrue and is added to the principal if no payments of interest have been made.