Federal Graduate PLUS Loan

The Graduate PLUS (Grad PLUS) loan is available to graduate students who are enrolled at least half-time. The maximum Grad PLUS loan that may be borrowed may not exceed the cost of attendance, as determined by the school according to federal regulations, minus any financial aid the student has been or will be awarded during the period of enrollment. Graduate and professional students who borrow the Grad PLUS loan must submit the FAFSA and utilize the Stafford Loan first.

A three percent origination fee will be deducted from the loan amount. An origination fee is a fee that is paid to the federal government to help offset the cost of maintaining the program.

Eligibility for the PLUS loan depends on a modest credit check that determines whether the student has an adverse credit history. An adverse credit history is defined as being more than 90 days late on any debt or having any Title IV debt (including a debt due to grant overpayment) within the past five years subjected to default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off.

The Grad PLUS loan is not based on need. Therefore, interest payments are not subsidized by the federal government and interest does begin to accrue at the time the loan is disbursed. As of July 1, 2006, the interest rate is fixed at 8.5%. The standard repayment term is ten years. Normally, repayment begins within 60 days of the final disbursement of the loan. However, graduate and professional students who borrow under the Grad PLUS program do qualify to defer their loan payments while they attend school on at least a half-time basis. Interest on the loan continues to accrue during this deferment period.