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What is a Grad PLUS Loan?
Getting an advanced degree instantly increases your earning potential, but it doesn’t come cheaply. Depending on your field of study, tuition alone can cost tens—or even hundreds—of thousands of dollars. For many students, a Grad PLUS Loan may offer a solution for financing the cost of their education. This government-backed loan program provides students with a credit-based option for borrowing the amount they need to cover their graduate-level expenses.
In order to qualify for a Grad PLUS Loan, borrowers must be U.S. citizens or eligible noncitizens who are enrolled in an eligible graduate or professional degree program. Plus, borrowers must meet all the other general eligibilities for federal student aid. Borrowers must also maintain Satisfactory Academic Progress (SAP) in their program and not be in default on any previous federal student loan.
Who Qualifies for a Grad PLUS Loan?
How Does a Grad PLUS Loan Work?
A Grad PLUS Loan is a federal loan that is borrowed by the student and must be repaid with interest. It is a credit-based loan that can cover the costs of tuition, books, supplies, and other related expenses. Because it is a federal loan, the credit requirements for the Grad PLUS Loan are more lenient than the requirements for a private student loan. That said, the borrower is still required to demonstrate that they have good credit history and a basic understanding of financial management and responsibility.
Interest Rates and Terms
The interest rate for a Grad PLUS Loan is a fixed rate and is set for the life of the loan. The current rate for the Grad PLUS Loan is 6.84%. Borrowers are not required to pay any upfront or origination fees, and they can choose to pay the loan off in up to 10 years after graduation. Repayment can cost anywhere from $25 a month to over $200 a month, depending on the loan size and repayment plan.
Pros and Cons of a Grad PLUS Loan
Pros: Fixed rate loans can provide more stability and predictability. Easier to qualify for than private student loans. A longer repayment period can make it more affordable for borrowers.
Cons: Interest accrues on the loan from the day it is disbursed. High-interest rate can make them expensive to repay. Defaulting on the loan can lead to wage garnishments and tax refund seizures.
Frequently Asked Questions about Grad PLUS Loans
Q: Can I borrow more than the cost of my tuition and related expenses with a Grad PLUS Loan?
Grad PLUS Loans are federal student loans that provide graduate students with the money they need to cover the cost of their education. They have fixed rates and have more lenient credit requirements than private student loans. Borrowers are advised to understand repayment terms and remain up-to-date with payments to avoid defaulting on the loan. For more information, visit Wikipedia’s Federal Direct Plus Loan page.
Q: What is a Grad PLUS Loan?
A: A Grad PLUS Loan is a federal student loan that graduate students can use to help pay for their education.
Q: What are the eligibility requirements for a Grad PLUS Loan?
A: To be eligible for a Grad PLUS Loan, you must be enrolled at least half-time in a graduate or professional degree program. You must also be a U.S. citizen or eligible non-citizen and not have an adverse credit history.
Q: What is the interest rate for a Grad PLUS Loan?
A: The interest rate for a Grad PLUS Loan is fixed at 7.08% for the 2018-2019 school year.
Q: What are the fees for a Grad PLUS Loan?
A: The fees for a Grad PLUS Loan are 4.248% for the 2018-2019 school year.
Q: How much can I borrow with a Grad PLUS Loan?
A: The amount you can borrow with a Grad PLUS Loan is generally limited to the cost of tuition and other related expenses.
Q: Can I consolidate a Grad PLUS Loan with any other federal student loan?
A: Yes, you can. A Grad PLUS Loan can be consolidated with federal student loans in order to make the repayment process more manageable and potentially lower the interest rate.
Q: Who should I contact if I have an issue with my Grad PLUS Loan?
A: You should contact the U.S. Department of Education’s Direct Loan Servicing Center for assistance with any questions or concerns you may have regarding your Grad PLUS Loan.
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