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| Federal Graduate PLUS Loan | Graduate PLUS loans are intended for students attending graduate school. The federal government sponsors these loans. You may borrower up to the full cost of your education.
Graduate students should exhaust their federal Stafford loan eligibility before applying for a Graduate PLUS loan.
Eligibility
• You must be enrolled at least half time.
• A credit check is required.
• You must be a U.S. citizen or national, a U.S. permanent resident, or an eligible non-citizen.
• You have to complete Free Application for Federal Student Aid (FAFSA)
Characteristics
• Flexible repayment is available for you.
• When you are in school at least half time no payments is required.
• You get life-of-loan servicing.
• There is no prepayment penalty.
• Interest may be tax deductible.
• It’s possible to combine repayment of Graduate PLUS loans with Stafford loans.
• Students who have not eligibility on Graduate PLUS on the basis of their own credit may obtain a creditworthy endorser.
• Some interest rate reductions may be available, they start when you are in school and last throughout repayment.
- A 0.25 percentage point interest rate reduction that begins at first disbursement—the interest rate will never exceed 8.25%.
- A 1 percentage point interest rate reduction after the first on-time payment.
- A 0.50 percentage point interest rate reduction that begins when you make your payments through automatic debit.
Loan limits
You may borrow up to the full cost of your education.
Interest rate
The Graduate PLUS loan has fixed interest rate at 8.5%. Some lenders can reduce the rate to as low as 6.75%.
Fees
There is a 3% origination fee taken out by the federal government. Up to a 1% federal default fee is also taken out. There are lenders and guarantors who pay all or a portion of the default fee for loans guaranteed July 1, 2007–June 30, 2008.
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