What is a Graduate PLUS Loan?
Pursuing higher education can be an expensive endeavor, especially for graduate or professional students who often require additional financial assistance beyond what is offered through federal student loans. This is where a Graduate PLUS Loan comes into play. A Graduate PLUS Loan is a type of federal loan specifically designed to help graduate and professional students cover the costs of their education. This loan provides a way for students to bridge the gap between their financial aid and the actual cost of their education.
Unlike other federal student loans, a Graduate PLUS Loan is not need-based. This means that eligibility is not determined by demonstrating financial need, making it accessible to a wider range of graduate and professional students who may not qualify for other federal assistance. Additionally, there is no maximum borrowing limit under the Graduate PLUS Loan program. However, the total amount a student can borrow is typically limited to the cost of attendance minus any other financial aid they have received.
1. How do I apply for a Graduate PLUS Loan?
To apply for a Graduate PLUS Loan, you must first complete the Free Application for Federal Student Aid (FAFSA). Once that is done, you can then fill out a separate application for the Graduate PLUS Loan specifically through the U.S. Department of Education’s online platform.
2. What is the interest rate for a Graduate PLUS Loan?
The interest rate for Graduate PLUS Loans is fixed for the life of the loan. As of July 1, 2021, the interest rate is set at 6.28%.
3. Do Graduate PLUS Loans require a credit check?
Yes, Graduate PLUS Loans do require a credit check. However, the credit requirements are less strict compared to private student loans, making it more accessible to students.
4. Are there any eligibility requirements for a Graduate PLUS Loan?
To be eligible for a Graduate PLUS Loan, you must be a graduate or professional student enrolled at least half-time in an eligible program at an accredited institution. You must also meet the general eligibility requirements for federal student aid, such as being a U.S. citizen or eligible non-citizen.
5. Can I use a Graduate PLUS Loan to cover living expenses?
Yes, a Graduate PLUS Loan can be used to cover not only tuition and fees but also other educational expenses, including living expenses. However, it is important to borrow only what is necessary to avoid excessive debt.
6. Can I consolidate my Graduate PLUS Loan?
Yes, you have the option to consolidate your Graduate PLUS Loan with other federal student loans through the Direct Consolidation Loan program. Consolidation can simplify repayment by combining multiple loans into a single loan with a single monthly payment.
7. Are Graduate PLUS Loans eligible for loan forgiveness?
Yes, under certain circumstances, your Graduate PLUS Loan may be eligible for loan forgiveness programs such as Public Service Loan Forgiveness (PSLF) or the Income-Driven Repayment (IDR) plan. However, eligibility for these programs depends on meeting specific criteria.
8. When do I have to start repaying my Graduate PLUS Loan?
The repayment period for a Graduate PLUS Loan typically begins six months after you graduate, leave school, or drop below half-time enrollment. This is known as the grace period.
9. Are there any fees associated with Graduate PLUS Loans?
Yes, Graduate PLUS Loans have an upfront loan fee. As of October 1, 2020, the loan fee for Graduate PLUS Loans is around 4.228% of the loan amount, deducted proportionately from each disbursement.
10. Can I defer my Graduate PLUS Loan if I return to school?
Yes, if you return to school at least half-time, you may be eligible for an in-school deferment on your Graduate PLUS Loan. This allows you to temporarily postpone making loan payments until you complete your studies.
11. Can my parents take out a Graduate PLUS Loan on my behalf?
No, Graduate PLUS Loans are specifically available for graduate and professional students. If your parents wish to borrow on your behalf, they may consider applying for a Parent PLUS Loan instead.
12. Can private student loans be considered instead of a Graduate PLUS Loan?
Private student loans may be an option, but it is important to carefully consider the terms and conditions. Graduate PLUS Loans often offer more flexible repayment options, protections, and access to federal loan forgiveness programs, making them a preferred choice for many graduate and professional students.