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Grad PLUS Loan Information and Private Student Loans
Grad PLUS Loans
The Graduate PLUS Loan, or Grad PLUS Loan, is a low, fixed interest rate student loan guaranteed by the U.S. Government. It is similar to the Parent PLUS Loan in the way it is an unsubsidized loan up to the cost of education. This loan is taken our in the graduate student’s name, on their own signature and credit rating. The Grad PLUS Loan is a non-need credit based loan similar to a private student loan with the benefit of having a fixed interest rate and federal guarantee. Federal loan deferment and forbearance options are the same as the Stafford Loan so graduate and professional students can postpone repayment while enrolled at least half-time in a degree or certificate program.
The Grad PLUS Loan allows graduate students to borrower the total cost for their graduate school needs, including tuition, room and board, supplies, lab expenses, and travel, less any other aid. Key benefits include:
Interest rate is fixed at 8.5%
Grad PLUS payments can be deferred while you are in school
Cosigner is not required
Interest is tax deductible for most graduate students
Graduate PLUS Loan Borrowing Limits
The yearly limit on a Grad PLUS Loan is equal to your cost of attendance minus any other financial aid you receive. For example, if your cost of attendance is $50,000 and you receive $30,000 in other financial aid, you could borrow up to but no more than $20,000.
Graduate PLUS Loan Eligibility
Your must be enrolled at least half-time (based on your school’s definition of full and half time status) in a Title IV accredited college or university. Check with your school’s financial aid office or consult its website if you are not sure your school is eligible. Graduate PLUS loans are non-need based, which means loan eligibility and total loan amount are not based on household family income level, personal income level, financial need, or personal assets. Unlike Stafford loans, Grad PLUS loans are credit-based. A qualified Graduate PLUS Loan borrower does not have an adverse credit history (defined in regulations as being 90 days or more delinquent on any debt, or having a credit report that shows default, discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off of a Title IV debt during the five years preceding the date of the credit report). If your credit is insufficient, you might need a cosigner. If you get denied, you can reapply with a cosigner. Please note, however, that for a Graduate PLUS Loan, lenders do not use any kind of debt-to-income ratio or FICO score, unlike private student loans.
Graduate PLUS Loan for Online Degree
Because online college degrees are offered at many top institutions that accept federal financial aid, you may be able to use a Graduate PLUS Loan to help you pay for your tuition. It primarily depends on whether or not the school you are getting your online degree from is Title IV accredited.
How to Apply for a Graduate PLUS Loan
Your first must complete the Free Application for Federal Student Aid (FAFSA) or Renewal FAFSA (for returning students). After the FAFSA is processed, your school will review the results and inform you of your loan eligibility by sending you an award letter. Once the award letter is received, you will be able to see how much financial aid you will need in order to pay for your college education. If the Graduate Stafford Loan and other forms of federal financial aid will not be enough to cover the costs, you then must complete the Master Promissory Note for the Graduate PLUS Loan, which is the promissory note/application for your loan. If for some reason you are denied a Graduate PLUS Loan, the denial letter can be provided to the school’s financial aid office and you may be awarded additional unsubsidized Stafford Loan funds. If you are not eligible for federal student loans or need additional money for college, you can then apply for private student loans.
Graduate PLUS Loan Disbursement
Your lender will disburse your Grad PLUS Loan funds directly to the school. The 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 loan funds will first be applied to the 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, unless you authorize the amount to be released to your school account. Any remaining loan funds must be used for your education expenses.
Graduate PLUS Loan Cancellation
Your school must notify you in writing whenever your account is credited with your loan proceeds. This notification must be sent to you no earlier than 30 days before and no later than 30 days after the school credits your account. You may cancel all or a portion of your loan if you inform your school within 14 days after that date that your school sends you this notice or by the first day of the payment period, whichever is later. Your school can tell you the first day of your payment period. If you receive Graduate PLUS Loan funds directly by check, you may refuse the funds by not endorsing the check.
Graduate PLUS Loan Interest Rates
Grad PLUS Loan interest rates are fixed at 8.5% in the FFEL program and 7.9% in the Direct Loan program. Interest is charged on the loan from the date the first disbursement is made until the loan is paid in full.
Graduate PLUS Loan Fees
There may be fees associated with the Graduate PLUS Loan. The fees vary by lender and can include a 1% default (or guarantee) fee plus a 3% origination fee. The 1% default fee is a fee used by the lender to create a reserve to protect the loan program in instances when borrowers default on their loans. Some lenders will waive fees as a benefit for using their company as your lender. Default and origination fees, if charged, are deducted from the loan funds before they are sent to the school.
Graduate PLUS Loan Repayment Options
The standard repayment term for a Graduate PLUS Loan is 10 years. You may be able to extend repayment by deferring or consolidating your federal loans.
You can choose one of the following plans:
The Standard Repayment Plan (or Level Repayment Plan) requires you to pay a fixed amount each month based on your principle and interest but will be no less than $50 or the interest that has accrued.
The Graduated Repayment Plan allows you to make lower payments at the beginning of repayment then, over time, your payments begin to increase. Each of your payments must equal the interest accrued on the loan between scheduled payments. Initial payments generally cover “interest-only” for the first few years. There are different types of graduated plans, so check with your lender on what is available.
The Income-Sensitive Repayment Plan bases your monthly payment on your yearly income and your loan amount. Payments may change as your income rises or falls.
The Extended Repayment Plan is for borrowers with FFELP loans totaling more than $30,000. This plan offers a choice of fixed or graduated payments over a period of up to 25 years.
Other Financial Aid Options
Scholarships are a great way for you to get extra money for college. Also, the Federal Graduate Stafford Loan is a low-interest, non-credit based loan. Then, after you have exhausted your free-money and federal loan options, you should consider taking out Private Student Loans. Private student loans lend up to the total cost of education, do not require the FAFSA, and can be used for any education related expense, including computers, books, housing, etc.
Grad PLUS Loans
The Graduate PLUS Loan, or Grad PLUS Loan, is a low, fixed interest rate student loan guaranteed by the U.S. Government. It is similar to the Parent PLUS Loan in the way it is an unsubsidized loan up to the cost of education. This loan is taken our in the graduate student’s name, on their own signature and credit rating. The Grad PLUS Loan is a non-need credit based loan similar to a private student loan with the benefit of having a fixed interest rate and federal guarantee. Federal loan deferment and forbearance options are the same as the Stafford Loan so graduate and professional students can postpone repayment while enrolled at least half-time in a degree or certificate program.
The Grad PLUS Loan allows graduate students to borrower the total cost for their graduate school needs, including tuition, room and board, supplies, lab expenses, and travel, less any other aid. Key benefits include:
Graduate PLUS Loan Borrowing Limits
The yearly limit on a Grad PLUS Loan is equal to your cost of attendance minus any other financial aid you receive. For example, if your cost of attendance is $50,000 and you receive $30,000 in other financial aid, you could borrow up to but no more than $20,000.
Graduate PLUS Loan Eligibility
Your must be enrolled at least half-time (based on your school’s definition of full and half time status) in a Title IV accredited college or university. Check with your school’s financial aid office or consult its website if you are not sure your school is eligible. Graduate PLUS loans are non-need based, which means loan eligibility and total loan amount are not based on household family income level, personal income level, financial need, or personal assets. Unlike Stafford loans, Grad PLUS loans are credit-based. A qualified Graduate PLUS Loan borrower does not have an adverse credit history (defined in regulations as being 90 days or more delinquent on any debt, or having a credit report that shows default, discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off of a Title IV debt during the five years preceding the date of the credit report). If your credit is insufficient, you might need a cosigner. If you get denied, you can reapply with a cosigner. Please note, however, that for a Graduate PLUS Loan, lenders do not use any kind of debt-to-income ratio or FICO score, unlike private student loans.
Graduate PLUS Loan for Online Degree
Because online college degrees are offered at many top institutions that accept federal financial aid, you may be able to use a Graduate PLUS Loan to help you pay for your tuition. It primarily depends on whether or not the school you are getting your online degree from is Title IV accredited.
How to Apply for a Graduate PLUS Loan
Your first must complete the Free Application for Federal Student Aid (FAFSA) or Renewal FAFSA (for returning students). After the FAFSA is processed, your school will review the results and inform you of your loan eligibility by sending you an award letter. Once the award letter is received, you will be able to see how much financial aid you will need in order to pay for your college education. If the Graduate Stafford Loan and other forms of federal financial aid will not be enough to cover the costs, you then must complete the Master Promissory Note for the Graduate PLUS Loan, which is the promissory note/application for your loan. If for some reason you are denied a Graduate PLUS Loan, the denial letter can be provided to the school’s financial aid office and you may be awarded additional unsubsidized Stafford Loan funds. If you are not eligible for federal student loans or need additional money for college, you can then apply for private student loans.
Graduate PLUS Loan Disbursement
Your lender will disburse your Grad PLUS Loan funds directly to the school. The 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 loan funds will first be applied to the 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, unless you authorize the amount to be released to your school account. Any remaining loan funds must be used for your education expenses.
Graduate PLUS Loan Cancellation
Your school must notify you in writing whenever your account is credited with your loan proceeds. This notification must be sent to you no earlier than 30 days before and no later than 30 days after the school credits your account. You may cancel all or a portion of your loan if you inform your school within 14 days after that date that your school sends you this notice or by the first day of the payment period, whichever is later. Your school can tell you the first day of your payment period. If you receive Graduate PLUS Loan funds directly by check, you may refuse the funds by not endorsing the check.
Graduate PLUS Loan Interest Rates
Grad PLUS Loan interest rates are fixed at 8.5% in the FFEL program and 7.9% in the Direct Loan program. Interest is charged on the loan from the date the first disbursement is made until the loan is paid in full.
Graduate PLUS Loan Fees
There may be fees associated with the Graduate PLUS Loan. The fees vary by lender and can include a 1% default (or guarantee) fee plus a 3% origination fee. The 1% default fee is a fee used by the lender to create a reserve to protect the loan program in instances when borrowers default on their loans. Some lenders will waive fees as a benefit for using their company as your lender. Default and origination fees, if charged, are deducted from the loan funds before they are sent to the school.
Graduate PLUS Loan Repayment Options
The standard repayment term for a Graduate PLUS Loan is 10 years. You may be able to extend repayment by deferring or consolidating your federal loans.
You can choose one of the following plans:
Other Financial Aid Options
Scholarships are a great way for you to get extra money for college. Also, the Federal Graduate Stafford Loan is a low-interest, non-credit based loan. Then, after you have exhausted your free-money and federal loan options, you should consider taking out Private Student Loans. Private student loans lend up to the total cost of education, do not require the FAFSA, and can be used for any education related expense, including computers, books, housing, etc.