Grad PLUS
Encyclopedia
Graduate PLUS is a type of federal
student aid, in the form of student loan
s, which is available to graduate and professional students. Similar to the Parent PLUS loan for parents of dependent undergraduate students, the Graduate PLUS loan is an unsubsidized federally guaranteed education loan with no annual or aggregate limits. It has no grace period
and it goes into repayment as soon as the funds are disbursed to the borrower. It has the same deferment
and forbearance
options as the federal Stafford loan
program. As such, graduate and professional students can postpone repayment using in-school deferment while enrolled at least half-time in a degree or certificate program of study.
As of August 2011, interest rates on Federal Family Education Loan Program
(FFELP) Federal PLUS loans are fixed at 7.9%. Many lenders offer borrower benefits to reduce this interest rate during repayment. During any period of deferment or forbearance, interest can accrue and be capitalized to the principal loan balance at the end of the deferment or forbearance period if it is not paid by the borrower as it accrues. There is also a 4.0% origination fee
attached to the loan that, due to regulations, cannot be paid by the lender on the borrower's behalf.
To get a PLUS loan
, the applicant cannot have adverse credit based on the review of at least one credit report from a national credit reporting agency. Lack of a credit history or insufficient credit history is not considered adverse credit. If the applicant has adverse credit, he or she can provide an endorser (cosigner) who does not have adverse credit to get a PLUS loan.
The federal Graduate PLUS loan is a federally guaranteed loan that is borrowed from a bank or other lending institution (e.g., Access Group
, Sallie Mae) and must be certified by one's school of attendance.
Federal government of the United States
The federal government of the United States is the national government of the constitutional republic of fifty states that is the United States of America. The federal government comprises three distinct branches of government: a legislative, an executive and a judiciary. These branches and...
student aid, in the form of student loan
Student loan
A student loan is designed to help students pay for university tuition, books, and living expenses. It may differ from other types of loans in that the interest rate may be substantially lower and the repayment schedule may be deferred while the student is still in education...
s, which is available to graduate and professional students. Similar to the Parent PLUS loan for parents of dependent undergraduate students, the Graduate PLUS loan is an unsubsidized federally guaranteed education loan with no annual or aggregate limits. It has no grace period
Grace period
A grace period is a time past the deadline for an obligation during which a late penalty that would have been imposed is waived. Grace periods, which can range from a number of minutes to a number of days or longer, depending on the context, can apply in various situations, including arrival at a...
and it goes into repayment as soon as the funds are disbursed to the borrower. It has the same deferment
Student loan deferment
Student loan deferment is an agreement between the student and lender that the student may postpone repayment of a student loan for a designated period. The student agrees to pay more money for the loan so the loan will not be in default. If the student is experiencing financial hardship or is...
and forbearance
Forbearance
In the context of a mortgage process, forbearance is a special agreement between the lender and the borrower to delay a foreclosure. The literal meaning of forbearance is “holding back.”...
options as the federal Stafford loan
Stafford loan
A Stafford Loan is a student loan offered to eligible students enrolled in accredited American institutions of higher education to help finance their education...
program. As such, graduate and professional students can postpone repayment using in-school deferment while enrolled at least half-time in a degree or certificate program of study.
As of August 2011, interest rates on Federal Family Education Loan Program
Federal Family Education Loan Program
The Federal Family Education Loan Program was the second largest of the U.S. higher education loan programs . The FFEL was initiated by the Higher Education Act of 1965 and was funded through a public/private partnership administered at the state and local level...
(FFELP) Federal PLUS loans are fixed at 7.9%. Many lenders offer borrower benefits to reduce this interest rate during repayment. During any period of deferment or forbearance, interest can accrue and be capitalized to the principal loan balance at the end of the deferment or forbearance period if it is not paid by the borrower as it accrues. There is also a 4.0% origination fee
Origination fee
An origination fee, or activation fee, is a payment associated with the establishment of an account with a bank, broker or other company providing services handling the processing associated with taking out a loan....
attached to the loan that, due to regulations, cannot be paid by the lender on the borrower's behalf.
Eligibility
Eligibility for PLUS loans require the applicant to be a U.S. citizen/national or eligible non-citizen with a valid Social Security number, pass a credit review and not have adverse credit history as defined by regulation (see credit criteria below), and not be in default on any federal education loan or owe a refund on a federal education grant.To get a PLUS loan
PLUS loan
A PLUS Loan is a student loan offered to parents of students enrolled at least half time in eligible programs at participating and eligible post-secondary institutions or graduate and professional students at participating and eligible postsecondary institutions.-Similarities with Stafford and...
, the applicant cannot have adverse credit based on the review of at least one credit report from a national credit reporting agency. Lack of a credit history or insufficient credit history is not considered adverse credit. If the applicant has adverse credit, he or she can provide an endorser (cosigner) who does not have adverse credit to get a PLUS loan.
The federal Graduate PLUS loan is a federally guaranteed loan that is borrowed from a bank or other lending institution (e.g., Access Group
Access Group
Access Group is a nonprofit student loan provider that specializes in graduate and professional student loans. The company provides federally-guaranteed Federal Stafford, PLUS and Consolidation loans through the Federal Family Education Loan Program, as well as private education loans for graduate...
, Sallie Mae) and must be certified by one's school of attendance.