Federal Graduate PLUS Loans
Graduate PLUS loans are part of the Federal Direct Loan Program and are for graduate students enrolled at least half time and who do not have an adverse credit history.
Loan Amounts: Students can borrow up to the cost of attendance minus any other aid. The total education cost can include tuition, living allowance, books and supplies, and transportation.
Interest Rate: Graduate PLUS loans first disbursed on or after July 1, 2013, carry an interest rate is 6.41% with an interest rate cap of 10.50%. Loans carry a fee of 4.204% that will be deducted from the loan disbursements.
Repayment: Students can defer payments while in school. There is no prepayment penalty. Interest accrues during in-school periods and may be paid or added to the principal at repayment.
- Student completes the Free Application for Federal Student Aid (FAFSA) (http://www.fafsa.gov/).
- Student completes the Direct Graduate PLUS Loan Request, Direct Graduate PLUS Master Promissory Note (MPN), and Graduate Level Direct Loan Entrance Counseling. All forms are available online at http://www.studentloans.gov/.
- The Office of Financial Aid receives Direct Graduate PLUS MPN and the Approved/Endorsed Graduate PLUS Loan Record from U.S. Department of Education (ED) and adds the Graduate PLUS award to the student's record.
- Student accepts, reduces, or declines the Graduate PLUS award amount.
- If student is registered and all official transcripts are on file with the Office of Admissions, the Office of Financial Aid sends a Direct Graduate PLUS Loan origination record to ED.[EF1]
The U.S. Department of Education is responsible for all Graduate PLUS Loan credit decisions. Graduate PLUS Loan borrowers are required to pass a simplified credit check, meaning that the U.S. Department of Education is not looking for a certain credit score or for an extensive credit history, but simply the absence of an adverse credit history. Students can view the status of their application by logging in to www.studentloans.gov or by calling Federal Direct Loans at 1-800-848-0979.
The following will cause a Graduate PLUS Loan to be denied:
- A current delinquency of 90 days or more; this includes unpaid collection accounts and charge offs.
- Default in the past five years.
- Defaulted loan that has been claim paid.
- Chapter 7, 11, or 12 bankruptcy (Chapter 13 is OK) in the past five years.
- Discharge in the past five years.
- Foreclosure in the past five years.
- Foreclosure proceedings started.
- Deed in lieu of foreclosure.
- Lease or contract terminated by default.
- Repossession in the past five years.
- Tax lien (county, state, or federal) in the past five years.
- Wage garnishment in the past five years.
- Voluntary surrender in the past five years.
- Write-off of Title IV debt in the past five years.
Students will receive an immediate response of an approved or denied application upon electronic completion as well as the loan reference number, which is needed if the student wishes to pursue an endorser. The Office of Student Financial Aid will be notified electronically of the credit decision only if the application was completed electronically. Applications are not approved or denied based on the dollar amount requested; therefore, students should NOT complete additional applications once a denied decision is rendered by the Department of Education. Approval for the Graduate Plus loan is specific to the individual loan. It is possible to be approved for one loan and denied at a later date for a new loan. Credit decisions are held for 90 days. Once the loan application is denied, the student must either find an endorser or appeal the credit decision.
The Office of Student Financial Aid has no control or influence on the credit decision rendered by the U.S. Department of Education. Any and all correspondence regarding credit appeals and endorsers must be sent to the U.S. Department of Education.
Denied students still have two options to obtain the Graduate PLUS Loan:
- Review their credit report (which can be done for free at http://www.annualcreditreport.com/) for possible errors and correct them before appealing directly to the U.S. Department of Education.
- Find a creditworthy endorser to co-sign the loan. This endorser will then be responsible for the loan should the student default on the loan at any point during the life of the loan.
Endorsing (co-signing) a Graduate PLUS Loan
Steps to be taken by the endorser-These MUST be completed electronically; paper addendums will not be accepted:
- Sign up for a PIN number at pin.ed.gov. A PIN is required to electronically sign the endorser addendum.
- Sign onto http://www.studentloans.gov/. This is the website where you electronically co-sign the loan.
- Click on "Endorse Direct PLUS Loan" (fourth link down, in the center of the page).
- Enter Loan Reference Number (provided by student borrower) and follow the instructions.
You will need to accept or reduce the Graduate PLUS Loan amount prior to the record being sent for certification.
Disbursement: Usually done in two equal amounts at the beginning of each semester and sent directly to the college. A federal origination fee will be deducted from the proceeds.
Repayment: Graduate PLUS loan repayment normally begins within 60 calendar days after the loan has been fully disbursed.