Federal PLUS Loans Available to Graduate Students
Funding an education is hard enough when you are an undergraduate student. When you apply to graduate school, things may get overwhelming. Government grants are no longer available, and undergraduate tuition looks like petty cash next to graduate school expenses. But don’t let your fear of debt overshadow your goals of attending graduate school. PLUS Loans, originally intended for parents, are also available to graduate students. Prospective graduate students don’t need to visit loan sharks to meet their financial needs; graduate school is a realistic goal. Here are some things you should know before applying for the PLUS Loan.
The Federal PLUS Loan At A Glance.
PLUS Loans are insured student loans that come directly from the federal government’s Direct Loan Program. The loans must be repaid with interest, with rates fixed at 7.9%. Interest is charged from the date of the first disbursement until the loan is paid in full.
How Much Can I Borrow?
Because the PLUS Loan is not based on financial need, it will allow you to borrow more money than other, need-based, federal student loans. The amount you may borrow is directly related to the cost of attendance. This takes into account tuition, room and board, the cost of books, and some personal expenses. When you subtract the amount of financial aid you already have from the cost of attendance, you will be left with the maximum sum you may borrow.
Similarities and Differences Between Parent and Student Borrowers.
The conditions that parents must meet when taking out a PLUS Loan are similar to those that graduate students must meet. These include citizenship (or non-citizen eligibility), at least half-time student enrollment, and a good credit history. Graduate students with a poor credit history may still apply if they find a cosigner.
However, there are a few differences between the rules that govern parents and graduate student loan applicants. For example, graduate students, unlike parents, must submit their FAFSA information. They must also have their maximum loan eligibility reassessed by the school before applying.
When Must I Repay The Loan?
Rules that applied to parents taking out PLUS Loans in the past are still intact. The payments for loans, including accumulated interest, will begin 60 days after the first disbursement. Consequently, parents will be paying for loans while the students are still in school. Graduate students, however, have the option of deferring their payments until they graduate. Both parents and students taking out a PLUS Loan have up to 10 years to pay off the loans.
The costs of graduate school can indeed be difficult to swallow. Hopefully, PLUS Loans for graduate and professional degree students will make doing so a little easier. Saving money and taking out federal need-based student loans may not always get you through school. While this regulation won’t make financing college a walk in the park, it should be enough to make ends meet. If you got through your undergraduate years, you can definitely get through this.