Most students that I speak with only think of PLUS Loans as parent student loans that can only be utilized if one, or both of their parents agrees to take out a student loan on their behalf.
While this is true for the conventional type of PLUS Loans, there are Graduate PLUS Student Loans that are designed to benefit students who are attending graduate, or professional programs, and are willing to take out loans to put towards their education-related expenses.
The Graduate PLUS Student Loan is very similar to the PLUS Loan that is available to parents, except that students who are attending graduate, and professional school can now apply without the need of their parents.
This unique kind of PLUS loan is now strictly being offered as part of the Direct Loan Program, and the proceeds are therefore coming directly from the Department of Education without the need of an intermediate lender.
How to Apply
Applying for a Graduate PLUS Student Loan isn’t quite as simple as applying for other federal student loans, as there is an independent application that you must fill out in accordance with the FAFSA.
Graduate PLUS Loans are also based in-part on your credit, and are not strictly based on need like the Stafford, and Perkins Loans are. This essentially means that you may be disqualified from receiving a Graduate PLUS Loan if it is determined that you have what is considered to be an “adverse” credit history.
You must fill out both a FAFSA, and an independent PLUS Loan application when you are ready to apply. You may also have to complete a separate Master Promissory Note, or MPN, for your PLUS Loan that will serve as a personal guarantee of your willingness to payback the loan.
Contact your school’s financial aid office to find out how you can get a copy of the application you must fill out to become eligible for the graduate PLUS loan. Your graduate, or professional school must be a participant in the Direct Loan Program in order to be able to receive the PLUS loan.
Cost and Loan Amounts
The graduate PLUS loan has a fixed interest rate of 7.9%, and deducts a 4% fee each time a loan disbursement is made.
You can borrow up to your cost of attendance minus any financial aid, as the Graduate PLUS Loan does not have the limits that Stafford, and Perkins loans come with.
Repayment
Repayment begins for a graduate PLUS Loan sixty days after the final disbursement, although you can postpone when you have to begin making repayments if you are enrolled in school on at least what is considered to be a half-time basis. If your PLUS Loan was disbursed on, or after July 1, 2008 you can delay when you must begin having to make payments by an additional six months if you cease to be enrolled on at least a half-time basis.
There are a whole host of repayment plans available when you decide to start making payments on your PLUS Loan. Students typically have from ten, to about twenty-five years to repay their PLUS Loan, although you can get explicit details of the options that may be available to you after you have completed the required entrance, and exit counseling at your school.
You may even be able to postpone when you have to begin making payments via forbearance, or deferment.
Graduate PLUS Loans may be able to be discharged under certain circumstances, and may be forgiven if you are employed at a qualified public-service position while making 120 consecutive payments.
