Federal Direct PLUS Loan Program
Effective July 1, 2006, graduate or professional students are eligible to borrow under the PLUS Loan Program. The terms and conditions applicable to Parent PLUS Loans also apply to Graduate/Professional PLUS loans. The main difference between the Graduate and Professional Student PLUS Loan and the Parent PLUS Loan is that graduate and professional students who are denied a PLUS loan because of adverse credit history will not be eligible for increased Stafford Loan limits.
Direct Graduate PLUS Loans have a fixed interest rate of 7.9 percent. This interest rate will not change throughout the life of your loan. Graduate PLUS borrowers have nearly all the repayment options that Direct Loan borrowers have. The exception is that the Direct Loan Income Contingent Repayment Plan is not an option for Direct PLUS Loan borrowers. Repayment begins on the date of the last disbursement of the loan and the first payment is due within 60 days after the date the loan is fully disbursed. A Graduate PLUS borrower may receive a deferment while he or she is enrolled on at least a half-time basis at an eligible school. Upon dropping to less than half-time enrollment status, the borrower is not entitled to a grace period on his or her PLUS loans.
Applicants for these loans are required to complete the Free Application for Federal Aid (FAFSA).
Complete the Graduate PLUS Loan Application and bring it to the Office of Financial Aid for certification.
There are no set annual or aggregate limits. You may borrow up to your full cost of attendance, minus any other financial aid you receive (including direct subsidized loans, Direct Unsubsidized loans, scholarships and certain fellowships).
The Graduate and Professional Student PLUS loan will not reduce eligibility for the Stafford Loan, but the PLUS loan limit will take the amount borrowed under the Stafford Loan into account. The graduate and professional students PLUS loan presents an alternative to private education loans. Eligibility for private education loans typically depends on your debt-to-income ratio and FICO score. Eligibility for the Graduate PLUS Loan does not depend on these factors. You can get a Graduate PLUS loan even if you have a bad credit score, so long as you do not have an adverse credit history (i.e., no more than 90 days late on any debt and no defaults, bankruptcies or other adverse action on any Title IV debt).
What are the eligibility requirements?
You must be enrolled at least half-time in a graduate or professional program (for example, a program that leads to a master's degree or to a law or medical degree) at a school that participates in the William D. Ford Federal Direct Loan (Direct Loan) Program, and must meet all of the other general eligibility requirements for the Federal Student Aid programs. In addition, you must not have an adverse credit history (a credit check will be completed).
What is considered to be an adverse credit history?
You are considered to have an adverse credit history if you are 90 or more days delinquent on any debt of if, within five years of the date of the credit report, you have been the subject of a default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment or write-off of a federal student aid debt (for example, a Direct Loan or Federal Stafford Loan).
What are my options if I have an adverse credit history?
You may still receive a Direct Graduate PLUS Loan if you obtain an endorser who does not have an adverse credit history. An endorser is someone who agrees to repay the loan if you do not repay it.
Can I borrow a Direct Graduate PLUS Loan to pay for courses required for teacher certification or for admission into a graduate or professional program?
No. You must be enrolled in a graduate or professional program.
Can I decline Direct Subsidized/Unsubsidized Loan and use only Direct Graduate PLUS Loans to pay form my education?
Yes. However, Direct Subsidized/Unsubsidized Loans have some advantages over Direct Graduate PLUS Loans. Direct Subsidized/Unsubsidized Loans have a lower fixed interest rate (6.8 percent) than Direct PLUS Loans (7.9 percent), and no interest is charged on Direct Subsidized/Unsubsidized Loans while you are in school at least half-time or during grace and deferment periods. In addition, Direct Subsidized/Unsubsidized Loans have a six-month grace period after you leave school during which you are not required to make payments. There is no grace period for Direct PLUS Loans.
Can I cancel a Direct PLUS Loans after I have applied?
Before your loan money is disbursed (paid out), you may cancel all or part of the loan by notifying your school. After your loan money is disbursed, you may cancel all or part of your loan within certain timeframes. For details, refer to the Borrower's Rights and Responsibilities Statement that accompanies your PLUS MPN.
Can the MPN that I signed for my Direct Subsidized/Unsubsidized Loans be used for Direct PLUS Loans?
No. You must sign a PLUS MPN.
Can I take out Direct PLUS Loans for myself under a PLUS MPN that I signed for Direct PLUS Loans to pay for my child's education?
No. You must sign a separate PLUS MPN to borrow for yourself.
How much can I borrow in Direct Graduate PLUS Loans?
There are no set annual or aggregate limits. You may borrow up to your full cost of attendance, minus any other financial aid you receive (including Direct Subsidized Loans, Direct Unsubsidized Loans, scholarships, and certain fellowships).
Do Direct Graduate PLUS Loan amounts count toward the $138,500 Direct Subsidized/Unsubsidized Loan aggregate loan limit for graduate/professional students?
No. Only Direct Subsidized/Unsubsidized Loans and Federal Stafford Loans (subsidized and unsubsidized) made through the Federal Family Education Loan (FFEL) Program count toward the $138,500 aggregate.
Am I eligible for a Direct Graduate PLUS Loan if I have reached the $138,500 Direct Subsidized/Unsubsidized Loan aggregate loan limit for graduate and professional students?
Yes. However, if you have exceeded the $ 138,500 aggregate, you must either repay the excess loan amount or make satisfactory arrangement to repay it before you can receive any additional Federal Student Aid, including Direct PLUS Loans.
If I have an adverse credit history and cannot find an endorser, can I receive additional Direct Unsubsidized Loan funds?
No. If you are not eligible for a Direct Plus Loan, the regular Direct Subsidized/Unsubsidized Loan annual loan limit for graduate and professional student applies. You may not borrow more than $18,500 (maximum $8,500 subsidized) for an academic year. (Certain health professions students may receive increased Direct Unsubsidized Loan amounts).
If I am in a health professions program that allows me to receive increased Direct Unsubsidized Loan amounts, can I also receive Direct Graduate PLUS Loans?
Yes. You may receive Direct Graduate PLUS Loans in addition to the increased Direct Unsubsidized Loan amounts.
Is there a loan fee?
Yes. The U.S. Department of Education charges a loan fee of the principal amount of each Direct Graduate PLUS Loan. This fee is deducted proportionately from each disbursement of your loan.
Is the Direct Subsidized/Unsubsidized Loan up-front interest rebate also available on Direct Graduate PLUS Loans?
Yes. Direct Graduate PLUS Loan borrowers receive the same up-front rebate repayment incentive (equal to 1.5 percent of the loan principal amount) that is currently available for Direct Subsidized/Unsubsidized Loan borrowers.