A Grad PLUS Loan is credit-based. If your credit isn't strong, you will need an endorser to cosign it. Unlike other federal direct student loans, there's no borrowing limit—it's up to your grad school's cost of attendance. The interest rate for a Grad PLUS Loan is higher than for a direct unsubsidized loan.
After completing the FAFSA, students can apply for a Graduate PLUS Loan at https://studentloans.gov under the section “Complete PLUS Request Process.” You will need to reapply for a new Graduate PLUS loan each subsequent academic year.
Note: You can request an increase in the amount of a Direct PLUS Loan you previously requested if it's for the same school and same award year. The loan can't exceed the cost of attendance (COA) minus other aid.
A Grad PLUS Loan lets you borrow up to the full cost of your college attendance. Approval for Grad PLUS Loans is based on your credit history. You must pay a loan fee (right now, the fee is 4.228% of the loan).
If you later want to receive another Grad PLUS loan, you must sign a new MPN. If you sign the MPN and receive a Grad PLUS loan without an endorser, but are later determined to have an adverse credit history and obtain an endorser for a future Direct Grad PLUS Loan, you will need to sign a new MPN for that loan.
Grad PLUS Loan Minimum Credit Score. Unlike a traditional consumer loan through a private lender, the Department of Education doesn't set a minimum Grad PLUS Loan credit score to qualify. Instead, the program states that borrowers can't have an adverse credit history.
Graduate PLUS Loans have much more forgiving credit criteria than most (if not all) private alternative loans. They simply require the 'absence of negative credit history' and do not require any sort of income level or debt-to-income ratios like all other loans require.
If your credit report indicates you are 90 days or more delinquent on any debt, are in default, have a bankruptcy, foreclosure, repossession, tax lien, wage garnishment or a write-off of any Title IV federal financial aid during the last five years, you will not be eligible to borrow a Grad PLUS Loan.
Interest, Fees & Lender
Because Federal Direct Unsubsidized Loans have lower origination fees and interest rates than Grad PLUS, it is recommended to accept all Unsubsidized Loan eligibility prior to determining if you wish to accept Grad PLUS Loans.
You may prepay all or part of your federal student loan at any time without penalty. Any extra amount you pay in addition to your regular required monthly payment is applied to any outstanding interest before being applied to your outstanding principal balance.
Any loan funds that remain will be disbursed to you in the form of a refund to help you pay for any additional education expenses. These funds will either be mailed to you in the form of a check or sent via direct deposit to the bank account you set up through Workday.
Eligibility. Federal Graduate PLUS Loans are available to graduate students who have reached their annual or lifetime borrowing limits under the Direct Unsubsidized Loan. These loans can cover your remaining summer costs of education not covered by other aid received.
Grad PLUS loans may be included in a Federal Direct Consolidation Loan (which have a repayment period of up to 30 years) and are eligible for Income-Driven Repayment and Public Service Loan Forgiveness.
The amount of Federal Pell Grant funds you may receive over your lifetime is limited by federal law to be the equivalent of six years of Pell Grant funding. Since the amount of a scheduled Pell Grant award you can receive each award year is equal to 100%, the six-year equivalent is 600%.
The optimum time frame to apply for a Grad PLUS loan would be no sooner than 30-45 days prior to the start of the academic term. PLUS loan credit checks are valid for 180 days, during this time a Master Promissory Note (MPN) must be activated.
Grad PLUS Loans
Typically, graduate students can borrow $20,500 per year of Federal Direct Unsubsidized loans up to a cumulative aggregate limit of $138,500, including loans received for undergraduate study.
You must complete a Direct PLUS Application for each year you wish to receive a graduate (grad) PLUS loan.
Unlike federal Direct unsubsidized loans, graduate PLUS loans require evidence that you don't have an adverse credit history. If you have a poor credit history, you may be required to find an “endorser” (the federal equivalent of a cosigner) with a better credit history.
More than $2,085 in total debt in collections or charged off in the past two years (before the date of the credit report); or. Default, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off of federal student loan debt in the past five years (before the date of the credit report)
Independent undergraduates and dependent students whose parents are unable to obtain PLUS Loans: $57,500 (including up to $23,000 subsidized). Graduate and professional students: $138,500 (or $224,000 for certain medical training) including undergraduate borrowing (including up to $65,500 subsidized).
You can take a tax deduction for the interest paid on student loans that you took out for yourself, your spouse, or your dependent. This benefit applies to all loans (not just federal student loans) used to pay for higher education expenses. The maximum deduction is $2,500 a year.
Students should notify the SFA Loan Department in order for the Grad PLUS loan to be awarded if your credit is approved with an endorser. Borrowers who required an endorser for approval of the GRAD PLUS loan must sign a new MPN for any supplemental or future GRAD PLUS loan.
There are two types of PLUS Loans: Grad PLUS Loans, which are available to graduate and professional students attending at least half time, and Parent PLUS Loans, which are available to parents of dependent undergraduate students attending at least half time. Both types of PLUS Loans require a credit check.
Grad PLUS loans come with a fixed interest rate — currently 7.54%. These loans are unsubsidized, meaning student loan interest begins to accrue as soon as the loan funds are disbursed. Additionally, you'll pay a 4.228% origination fee to the U.S. Department of Education to process the loan.