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Federal PLUS Loans Available to Graduate Students

Applying to graduate school is nerve-wracking. Not only is it hard to get accepted, but financial aid is harder to find. Government grants are not available to grad students, so costs make undergraduate tuition look like pocket change. Do not let the fear of debt overshadow your goals of attending graduate school. PLUS Loans, originally intended for parents, are available for 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 to know before applying for a PLUS Loan.

The Federal PLUS Loan at a Glance

PLUS Loans are insured student loans that come from the federal government’s Direct Loan Program. Like all other loans, these must be repaid. The interest rate for PLUS loans is a fixed 7.9%. Interest is charged from the date of the first disbursement until the loan is paid off.

How Much Can I Borrow?

Because the PLUS Loan is not based on financial need, you can borrow more money than need-based federal student loans. The amount of money you can borrow is based on the cost of attendance. Cost of attendance includes tuition, room and board, books, and some personal expenses. To calculate the amount to borrow, subtract your financial aid from the cost of attendance.

Similarities and Differences Between Parent and Student Borrowers

To take out a PLUS Loan, graduate students have similar conditions as parents of dependent students. To qualify, grad students must be a U.S. citizen or eligible non-citizen, be enrolled at least half-time, and have good credit history. Graduate students with bad credit can apply with a cosigner.

There are a few differences between applying as a grad student vs. applying as a parent of a dependent student. For example, graduate students must submit their FAFSA information and have their maximum loan eligibility reassessed by the school before applying for the loan.

When Do 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, start 60 days after the first disbursement. Consequently, parents pay for loans while the students are still in school. Graduate students can defer 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 is difficult to swallow. PLUS Loans for graduate and professional students help make costs manageable. Saving money and taking out federal student loans is not always enough, and grad student regulations make financing college difficult. PLUS Loans will supplement financial aid if necessary, and be enough to make ends meet. If you got through undergrad, you can get through this.

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Last Reviewed: February 2020