Graduate PLUS Student Loans

The information below is only relevant if you are a graduate student. If you are an undergraduate, you cannot use a GradPLUS loan.

Interest Rates: GradPLUS loans offer a fixed interest rate for the life of the loan which is the same for all borrowers (currently 8.5%) while most (but not all) private loans are based on a variable rate that is based on your credit strength. Keep in mind that most lenders offer incentives to lower the rate you might actually pay. The variable rate used for private loans is credit-based and wil increase and/or decrease according to the market environment.

Consolidation: GradPLUS loans may be consolidated with other federal education loans such as Stafford or Direct loans. This may help to better manage your debt when you graduate and enter repayment.

Repayment Length: GradPLUS loans are based on a 10-year repayment that begins 60 days following the final disbursement, although this can be deferred in many cases until you graduate. Private loans offer variable repayment terms. Most are in the range of 12-30 years for repayment.

Credit Check/Credit Strength: GradPLUS loans do have a credit check, but it is a "light" credit check which looks for "adverse" credit. GradPLUS loans do not require a co-signer.

Private loan lenders generally perform a more thorough credit check which, in addition to checking your FICO, or credit score, may also look at your debt-to-income ratio, income, employment status and other credit-based factors. If you do not have strong credit, most private loans will require the presence of a creditworthy co-signer to approve the loan.

Consolidation: GradPLUS loans can be consolidated along with your Stafford loans upon graduation to give you a single payment. Private loans can be consolidated but in a separate loan from your Federal loans called a private consolidation loan.

Deferment & Forbearance: GradPLUS loans are federal loans and therefore offer the same payment deferment and forbearance options as the federal Stafford loan. Forbearance covers factors such as unemployment and economic hardship (up to 3 years) and deferment of payments while in-school is unlimited while you maintain at least half-time enrollment. Many private loans only offer one year of forbearance but each lender's conditions may vary.

You might want to choose a private loan if:

• You are comfortable with the possibility of interest rates increasing beyond the interest rate cap of the GradPLUS loan
• You have top-tier credit - at this point in time, these borrowers will presently be charged less interest, but if interest rates continue to climb, this benefit decreases or disappears altogether
• You believe that there is very little possibility that you may use the deferment or forbearance options
• You plan to only borrow the loan for a short time

You might want to choose a GradPLUS loan if:

• You like the certainty that a fixed-rate loan provides
• If your credit is good, fair, or poor, your cost will likely be lower
• You like the protection that the greater deferment and forbearance options provide
• The repayment incentives offered may bring the repayment interest rate cost to less than 8.50%

You must be enrolled at least half-time in a graduate or professional program leading to a master’s degree (or law, medical, or other professional degree) to be eligible to borrow a GradPLUS loan. For non-degree granting programs, you may want to consider a continuing education loan.

Yes, in order to be eligible for the GradPLUS loan, you must file the FAFSA.

Additionally, you must apply for and the school must determine the student's eligibility for the maximum annual subsidized and/or unsubsidized Stafford loan amount; however, the student is not required to receive a Stafford loan as a condition of receiving a GradPLUS loan.

The eligible loan amount cannot exceed your total cost of attendance unless other aid is received.