With more than 10 years of experience making loans and other complex money matters more accessible to the everyday person, Jennifer has helped readers build manageable and healthy money habits. Her work has been featured on numerous national financia.
Jennifer Calonia Loans ExpertWith more than 10 years of experience making loans and other complex money matters more accessible to the everyday person, Jennifer has helped readers build manageable and healthy money habits. Her work has been featured on numerous national financia.
Written By Jennifer Calonia Loans ExpertWith more than 10 years of experience making loans and other complex money matters more accessible to the everyday person, Jennifer has helped readers build manageable and healthy money habits. Her work has been featured on numerous national financia.
Jennifer Calonia Loans ExpertWith more than 10 years of experience making loans and other complex money matters more accessible to the everyday person, Jennifer has helped readers build manageable and healthy money habits. Her work has been featured on numerous national financia.
Loans Expert Kennedy Edgerton Personal Finance EditorKennedy Edgerton is a personal finance editor, leveraging his passion for writing and personal finance to produce stimulating content that empowers readers to enhance their lives through advised decision-making. He has written for several publication.
Kennedy Edgerton Personal Finance EditorKennedy Edgerton is a personal finance editor, leveraging his passion for writing and personal finance to produce stimulating content that empowers readers to enhance their lives through advised decision-making. He has written for several publication.
Kennedy Edgerton Personal Finance EditorKennedy Edgerton is a personal finance editor, leveraging his passion for writing and personal finance to produce stimulating content that empowers readers to enhance their lives through advised decision-making. He has written for several publication.
Kennedy Edgerton Personal Finance EditorKennedy Edgerton is a personal finance editor, leveraging his passion for writing and personal finance to produce stimulating content that empowers readers to enhance their lives through advised decision-making. He has written for several publication.
| Personal Finance Editor
Updated: Feb 9, 2024, 9:50am
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A graduate degree can be useful if you’re willing to pay high tuition expenses. However, these degrees can cost between $54,000 to $73,000, according to the Education Data Initiative—and that price may increase over time.
Most graduates will need federal student aid programs, like Graduate PLUS Loans, to cover expenses. Before you pursue a Grad PLUS loan, make sure you know all of the details and requirements.
You must submit a completed Free Application for Federal Student Aid (FAFSA) before you can apply for a Grad PLUS loan. Your eligibility for a Grad PLUS loan is determined when the Department of Education processes your FAFSA.
The FAFSA allows access to other types of financial aid, including other loans, scholarships, grants and work-study opportunities. Many state- and school-sponsored aid programs also require graduate students to complete a FAFSA as part of their eligibility requirements.
If your financial aid award package includes Grad PLUS loans, you can submit a Grad PLUS loan application using your personal information, FSA ID, desired loan amount, school name and employer information (if applicable) on your application.
To apply for a Grad PLUS loan, you’ll need to undergo a credit check. Direct PLUS loans are the only type of federal student loan that requires a credit inquiry. You can’t have an adverse credit history if you want to qualify.
Within five years preceding the credit pull date, you can’t have a default, bankruptcy, repossession, foreclosure, federal student aid debt write-off, wage garnishment or tax lien on your record.
If you have adverse credit, you might still be able to apply for Grad PLUS loan through two options:
With either option above, you’ll need to also complete PLUS counseling before Grad PLUS loans are disbursed.
The maximum borrowing limit for each annual Grad PLUS loan application is your school’s cost of attendance (COA), excluding the amount of financial assistance you’ve already received. The COA is based on your school’s reported figure only.
As a graduate student, you’ll face higher educational costs than your undergraduate counterparts. Other federal loan options may not cover all of the year’s graduate school costs.
Direct PLUS loans have the highest interest rates and fees of all federal student loan options.
Currently, PLUS loans have a fixed rate of 8.05% for loans disbursed between July 1, 2023 and July 1, 2024. You’ll also owe a 4.228% loan fee on the amount you’ve borrowed, which is automatically deducted from your loan payout.
By comparison, new unsubsidized Direct loans have a fixed rate at 7.05%, and a loan fee of 1.057% of your loan amount. Additionally, other non-federal loan options through private student loan lenders might offer competitively lower interest rates than a Grad PLUS loan.
Despite higher interest rates, you still have access to federal benefits and protections that private loans don’t offer.
You can also access flexible income-driven repayment plans and federal student loan forgiveness programs, like Public Service Loan Forgiveness. As a federal loan borrower, you’ll also be eligible for extended deferment and forbearance options. For example, the COVID-19 administrative payment and interest pause offered automatic repayment relief to borrowers with federally owned student loans.
Interest charges are added to the loan while you’re in school and during the six-month grace period following your departure from the school. You can make in-school or interest-only payments to reduce your debt when you leave school and enter repayment.
If you don’t pay the accrued interest during deferment and your grace period, the interest that accumulates capitalizes—meaning it’s added to your loan’s principal balance. When you start repaying your loan, interest will be charged on the higher balance and you’ll essentially pay double the interest.
If Grad PLUS loans aren’t a fit for you and you still need to pay for graduate school, you have a few options:
Compare rates from participating lenders via Credible.com
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Loans ExpertWith more than 10 years of experience making loans and other complex money matters more accessible to the everyday person, Jennifer has helped readers build manageable and healthy money habits. Her work has been featured on numerous national financial publications like Credit Karma, Newsweek and LendingTree.
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