Grad PLUS loans are federal loans that are available to graduate and professional students. They are meant to fill the gap between the student's financial aid package and the cost of education. The main difference between the Parent Loan for Undergraduate Students (PLUS loan) and the Grad PLUS loan is that the student is the borrower of the latter, not the parent. Here is an overview of the Grad PLUS loan program.
To qualify for a Grad PLUS loan, you must:
Be a U.S. citizen or eligible non-citizen.
Be enrolled at least half time in an eligible graduate or professional program.
Complete the Free Application for Federal Student Aid (FAFSA).
Apply for your maximum annual Stafford eligibility.
Have a valid Social Security number.
Not be in default on a federal student loan or owe money back on a federal student grant.
Be registered with the Selective Service (if required).
Have no adverse credit history.
This is a list of general federal eligibility criteria. Based on your circumstances, there may be more specific requirements you must meet.
One of the eligibility requirements for a Grad PLUS loan is to not have an adverse credit history. You will not pass the credit check if:
You are 90 days or more delinquent on the repayment of any debt.
You had any debt discharged in bankruptcy any time during the five years preceding the date of the credit check.
You have been the subject of a default determination on any debt, foreclosure, tax lien, repossession, wage garnishment, or write-off of a Title IV debt any time during the five years preceding the date of the credit report.
Keep in mind that a lack of credit is not considered adverse in regards to the Grad PLUS loan program. If you do have adverse credit, you may be able to use a creditworthy endorser to obtain a Grad PLUS loan.
Interest rates on Grad PLUS loans are market-based, so they will fluctuate from year to year. However, once the loan is issued, the rate is locked in. Rates for PLUS loans are capped at 10.5%. For the current year interest rate, view our federal student loan comparison chart.
There is no annual maximum amount for the Grad PLUS. As a graduate/professional student, you can borrow up to the cost of education minus other financial aid received.
All PLUS loans enter repayment once the loan is fully disbursed. There is no six-month grace period for Grad PLUS loans, as there is for Federal Stafford loans. However, as a Grad PLUS borrower, you can defer repayment while you're enrolled in school at least half time and (for PLUS loans first disbursed on or after July 1, 2008) for an additional 6 months after you graduate or drop below half-time enrollment. If you choose to defer payment on a Grad PLUS loan, any interest that accumulates during the deferment period will be added to the unpaid principal amount of your loan.
For more information about the Grad PLUS loan program, please visit studentaid.ed.gov.