What is the Graduate/Professional PLUS Loan?
Graduate/Professional PLUS Loans are low-interest loans meant to help cover
college expenses for graduate and professional degree students. You can borrow
up to your cost of attendance minus the amount of any other financial aid
PLUS loans are unsubsidized -this means that interest accumulates while
you are attending graduate school. You need a positive credit history to qualify.
How do I qualify for the loan?
To qualify for a Graduate/Professional PLUS loan, 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).
You must meet all of the other general eligibility requirements for the
Federal Student Aid programs. For example, you must be a United States citizen
or eligible non-citizen, and you must not be in default on a federal student
loan or owe a refund on a federal education grant. You must also pass a credit
check. If you don't pass, you may still be able to receive a loan by documenting
any existing extenuating (difficult and unusual) circumstances, or by obtaining
an endorser who does not have an adverse credit history. An endorser or co-signer
is someone who agrees to repay the loan if you fail to do so.
Can I borrow a Graduate/Professional PLUS Loan to pay for courses
required for teacher certification or that are prerequisites for admission
into a graduate or professional program?
No. You must be enrolled in a graduate or professional program.
How do I apply?
For a Graduate/Professional PLUS Loan, you must complete the Free Application
for Federal Student Aid (FAFSA). You may also need to complete a Federal PLUS
Loan application. Check with your school's financial aid office to inquire
about their process for requesting a Direct PLUS Loan.
Before receiving your Graduate/Professional PLUS Loan, you must sign a
Master Promissory Note (MPN) that you'll get from your school or from the
Department of Education. You may be able to complete the application and MPN
online -- check with your school's financial aid office. The MPN explains
the terms and conditions of your loan and is your legally binding agreement
to repay your loan.
Can I cancel the loan if I change my mind?
Yes. Before your loan money is disbursed (paid out), you may cancel all
or part of the loan by notifying your school of your decision. After your
loan money is disbursed, you may cancel all or part of your loan within certain
timeframes. For details, refer to the Borrower's Rights and Responsibilities
Statement that accompanies your PLUS MPN.
How much can I borrow?
With a Graduate/Professional PLUS Loan, you may borrow up to your full
cost of attendance, minus any other financial aid you receive (including other
loans, scholarships and certain fellowships).
Your cost of attendance (COA) is the total amount it will cost you to go
to school -- usually expressed as a yearly figure. It is determined using
rules established by law. The COA includes tuition and fees, on-campus room
and board (or a housing and food allowance for off-campus students), and allowances
for books, supplies, transportation, loan fees and dependent care, if applicable.
What's the interest rate on Graduate/Professional PLUS Loans?
The interest rate is 6.84 percent for Direct PLUS Loans first disbursed
between July 1, 2015 and before July 1, 2016. These are fixed interest rates
for the life of the loan.
Other than interest, is there a charge to get a Graduate/Professional
Yes. In addition to interest, you will pay a loan fee of 4.292 percent
for loans first disbursed on or after October 1, 2014 and before October 1,
2015. A loan fee of 4.272 percent will be assessed for loans first disbursed
on or after October 1, 2015 and before October 1, 2016. The U.S. Department
of Education charges the loan fee to help reduce the cost of making these
low-interest loans. The loan fee is deducted proportionately each time a
loan disbursement is made. In other words, because it is a percentage of the
principal amount, the fee will get smaller as you make payments on the principal.
How much will I have to pay back each month?
You will be able to choose from a variety of repayment plans designed to
meet your needs. Your monthly payment amount on a PLUS Loan will vary depending
on the repayment plan that you choose and how much you borrowed. Your loan
servicer will provide you with information on available repayment plans. They
can also provide you with estimated monthly payment amounts for different
debt levels or for other repayment plans.
When do I pay back the loan?
The Federal Student Aid website says: "Your Direct PLUS Loan enters repayment
once your loan is fully disbursed (paid out). However, if you are a graduate
or professional student, your loan will be placed into deferment while you
are enrolled at least half-time and for an additional six months after you
cease to be enrolled at least half-time.
If your loan is deferred, interest will accrue on the loan during the deferment.
You may choose to pay the accrued interest or allow the interest to capitalize
when the deferment period ends. Your loan servicer will notify you when your
first payment is due."
Is it ever possible to postpone repayment of the loan?
You may defer repayment while you are enrolled in school at least half-time.
If you have trouble making your scheduled loan payments, you should contact
your loan servicer immediately. There are options your loan servicer can explain
to you such as changing your repayment plan, requesting a deferment or a forbearance
that would allow you to temporarily stop or lower the payments on your loan.
You will have to explain why you are unable to make payments. Be sure to contact
your loan servicer immediately if you encounter any difficulty repaying your
Is interest charged during deferment or forbearance?
Yes. Interest is charged on a PLUS Loan starting on the date of the first
loan disbursement, and it continues to be charged during periods of deferment
If you don't pay the interest as it accumulates, it will be capitalized.
This means that the interest will be added to the principal amount of the
loan, and additional interest will be based on that higher amount. In other
words, the loan will get bigger!
Can a PLUS Loan debt ever be discharged?
Yes, under certain conditions such as bankruptcy, disability and death.
A discharge releases you from your obligation to repay the loan.
The following reasons are not sufficient to discharge your PLUS
- You didn't complete your program of study at your school (unless you couldn't
complete the program for a valid reason -- for example, the school closed)
- You didn't like the school or the program of study
- You didn't obtain employment after completing the program of study
Can I consolidate my Graduate/Professional PLUS Loans with my other
Yes, you may consolidate your Direct PLUS Loans with your other eligible
student loans after you leave school. Consolidation is the combining of several
loans into a single loan to reduce the monthly payment amount and/or increase
the repayment period.
Note that the repayment period for a consolidation loan begins as soon
as the loan is made. Therefore, if you want to consolidate your PLUS Loans
with other student loans that have a grace period, you should wait to do so
until shortly before the end of the grace period on the other loans.
How can I get more information?
For more information on Student Financial Assistance Programs, contact
the Federal Student Aid Information Center:
Aid on the Web
Phone: 1-800-4-FED-AID (1-800-433-3243)
(Spanish speakers are available)