Graduate or professional students are eligible to borrow under the PLUS Loan Program up to their cost of attendance minus other estimated financial assistance in the Direct 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 an adverse credit history will not be eligible for increased Stafford Loan limits.
Application Form
Applicants for these loans are required to complete the Free Application for Federal Student Aid (FAFSA).
They also must have applied for their annual loan maximum eligibility under the Federal Subsidized and Unsubsidized Direct Loan Program before applying for a Graduate/Professional PLUS loan.
Amounts
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).
Interest rate and repayment
Direct PLUS Loans have a fixed interest rate of 7.9%. 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.
Qualifying Credits and Program
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 Federal 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 done).
Additional information
The Graduate and Professional Student PLUS loan will not reduce eligibility for the Direct Loan, but the PLUS loan limit will take the amount borrowed under the Direct Loan into account. The PLUS loan is limited to cost of attendance minus aid received, as certified by the school.
The graduate and professional student 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 PLUS Loan does not depend on these factors. You can get a PLUS loan even if you have a bad credit score, so long as you don't 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). Most private education loans are variable rate loans with an interest rate that depends on the borrower's (and/or co-borrower's) credit score. The loan fees on a PLUS loan total 4%, while the loan fees on private education loans depend on your credit score and can be as high as 11%.
