Applying for a Federal Direct Grad PLUS Loan
Graduate or professional students who need additional funds to cover their education expenses may be eligible for a Direct PLUS Loan. This loan fills the gap between the cost of education and the funding received through Federal Direct Loans and other financial aid‚ including graduate assistantship waivers and fellowships. To apply for a Grad PLUS Loan‚ you must first complete the Free Application for Federal Student Aid (FAFSA). Then‚ the Federal Direct Grad PLUS Loan Application for Graduate or Professional Students will need to be completed. The application allows you to authorize how the school may use your Direct PLUS Loan funds to pay for educational expenses. You can also change the loan amount or request deferment. The 2025-2026 Federal Direct Graduate PLUS Loan Application will be available in May 2025.
Eligibility Requirements
The Federal Direct Graduate PLUS Loan (Grad PLUS) is available to U.S. citizens and permanent residents. It is not based on need‚ however you must still file the FAFSA to be eligible. You must be enrolled at least half-time in a qualifying degree program. The GradPLUS loan is meant to fill the gap between your financial aid package and the cost of education ― your school must determine your federal loan eligibility before you apply for a GradPLUS loan. With the GradPLUS loan‚ the student is the borrower‚ not the parent. There are credit requirements for the GradPLUS loan‚ but no debt-to-income ratio is required. A basic credit check is required‚ but demonstrating financial need is unnecessary. The Federal Grad PLUS Loan is a credit based federal loan for graduate students. Interest that accrues on the loan is not subsidized by the federal government.
The Application Process
To receive a Federal Direct Grad PLUS Loan‚ a student borrower must reapply each year‚ which will include a new credit check. The credit check for a Grad PLUS Loan applicant is valid for 180 days from the date of application. A loan applicant may be denied based on adverse credit history. Should you choose to complete your application more than 180 days prior to the start of your semester‚ you may be required to undergo a second credit check. If you appeal your credit denial or seek an endorser‚ you may also be required to complete federal PLUS loan counseling. Direct Loans will notify you if you need to complete the counseling requirement. By contacting Federal Student Aid directly at 1-800-557-7394‚ you may⁚ (1) dispute your credit report; (2) clear up adverse items; and/or (3) request an endorser. Once the FAFSA is submitted‚ a PLUS loan application can be made at any time throughout the academic year; however‚ please note that you must apply for each academic year. A grad PLUS loan is a Direct Loan issued by the U.S. Department of Education to a graduate or professional student. Eligible students typically must complete the FAFSA and complete a Direct PLUS Loan application for graduate or professional students.
Interest Rates and Repayment Options
Currently‚ PLUS loans have a fixed rate of 8.05 for loans disbursed between July 1‚ 2023 and July 1‚ 2024. You’ll also owe a 4.228 loan fee on the amount you’ve borrowed‚ which is deducted from the loan amount at disbursement. The interest rate for the Grad PLUS Loan is fixed for the life of the loan. You can choose from a variety of repayment options‚ including the standard repayment plan‚ the graduated repayment plan‚ the income-contingent repayment plan‚ and the income-based repayment plan. The standard repayment plan is the most common repayment plan‚ and it requires you to make monthly payments over a period of 10 years. The graduated repayment plan allows you to make smaller payments in the early years of repayment and larger payments in the later years. The income-contingent repayment plan bases your monthly payments on your income and family size. The income-based repayment plan is similar to the income-contingent repayment plan‚ but it has a lower monthly payment and a longer repayment period.
Managing Your Student Debt
On average‚ graduate borrowers took out about $26‚000 in loans for the 2019-20 school year alone. For federal loans‚ there are two borrowing options⁚ Direct unsubsidized loans. Direct unsubsidized loans are not based on financial need and interest begins accruing from the time the loan is disbursed‚ even while the student is enrolled in school. Direct subsidized loans are based on financial need and the government pays the interest while the student is enrolled in school at least half-time and during the six-month grace period after graduation. A Grad PLUS loan comes with a number of benefits‚ such as relatively-favorable interest rates‚ a range of consumer protections from the federal government‚ and the possibility of loan forgiveness. However‚ it can be difficult to meet the eligibility requirements‚ most notably the strict credit requirements. Additionally‚ the interest is higher than for other federal student loans‚ and the loan fee is higher than for other federal student loans.
Grad PLUS Loan Benefits and Drawbacks
The Grad PLUS Program is designed to help graduate or professional students pay the cost of their education expenses. It is available to U.S. citizens and permanent residents and is not based on need. A Grad PLUS loan comes with a number of benefits‚ such as relatively-favorable interest rates‚ a range of consumer protections from the federal government‚ and the possibility of loan forgiveness. However‚ it can be difficult to meet the eligibility requirements‚ most notably the strict credit requirements. Additionally‚ the interest is higher than for other federal student loans‚ and the loan fee is higher than for other federal student loans. A Grad PLUS loan can be a valuable tool for graduate students who need to finance their education‚ but it’s important to weigh the benefits and drawbacks before taking out a loan.
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