Graduate Student PLUS Loans

Graduate Student PLUS Loans are not just for parents anymore and now graduate and professional students qualify to borrow money for graduate studies. The Grad PLUS loan will work much like the Parent PLUS loans that are available to parents of undergraduate students. Now, graduates will be able to borrow up to the full cost of education minus all other financial aid received.

Depending on the school you plan to attend you'll need to complete either a Direct PLUS loan application or a FFEL PLUS Loan application. In either case, the application needs to be completed and sent to your graduate school's financial aid office.

Industry specialist suggest that you should borrow what you can through the Stafford loan program before applying for your Grad PLUS loan. Why? Because the interest is higher and unlike some Stafford loan amounts, the Grad PLUS loan is not subsidized. Also, Grad PLUS loans don't have a grace period and generally must be repaid once the money is dispersed. You'll be able to defer payments until after school, and you can either pay the interest while in school or add it to the principal.

Overall, graduate PLUS loans are at a much lower interest rate (depending on your credit history) even though some private lenders advertise a low variable rate. Private loan variable rates generally only apply to the loan while you're in school and can increase by 2% once you've completed your studies.

Should your credit history not be in great standing at the time, you should still go through the application process. As long as you don't carry a tax lien, are not in default on a loan or more than 90 days late on a credit card payment, you loan chances are very good.

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