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GradPLUS Loans
Graduate and
Professional Student PLUS Loans pay up to 100% of your graduate
school expenses.
If you were ever
wondering how you were going to pay for your graduate school
education, you can put your mind at ease and relax, because
paying for your graduate education is now within your reach with
a Federal Grad PLUS Loan. With a Grad PLUS student loan you can
get the money you need to pay up to the full cost of a graduate
or professional degree.
Besides student tuition, Grad PLUS student loans can be used to
cover all your educational
expenses, like text books, program fees, transportation and even
a living allowance. |
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Although similar, there are some notable differences between the
Graduate and Professional Student PLUS Loans and the the Parent
PLUS Loans. Specifically, the main difference between the
Student PLUS Loan and the Parent PLUS Loan is graduate and
professional students who are denied a PLUS loan on the basis of
their credit history will not be eligible for increased Stafford
Student Loan limits. |
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With a notable fixed interest rate of 8.5 percent on your
Federal Grad PLUS Loan, you’ll never have to worry about your
interest rate going up or your student loan payments changing
on a monthly basis, which is what makes the professional student
PLUS loan an interesting alternative to private student loans.
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In addition to the fixed term interest rate the Student Grad
PLUS loan is eligible for student loan consolidation.
Key
differences between the Student PLUS Loans Private Student
Loans:
Student PLUS Loans Loan Fees.
The Student PLUS Loan fees on a Student PLUS Loan total 4
percent, while the loan fees on a private student loan will vary
and depend on your credit score. Interest rates can be anywhere
between 4 percent and as high as 12 percent.
Student PLUS Loans Eligibility
Requirements.
To be eligible for private student loan your FICO score and
debt-to-income ratio will usually be taken into consideration
whereas your eligibility for the PLUS Student Loan does not rely
on these factors. You can get a PLUS student loan even if you
have a bad credit score, as long as you do not have an adverse
credit history. These requirements include a determination that
the applicant does not have an adverse credit history. Repayment
for the Student PLUS Loan begins on the date of the last
disbursement of the loan, and a fixed interest rate of 8.5
percent in the FFEL program and 7.9 percent in the Direct Loan
program. Examples of adverse credit history include being more
than 90 days late on any existing or previous debt, loan
defaults, a bankruptcy or any other adverse action on any Title
IV debt.
Student PLUS Loans Interest
Rates.
Most private student loans have a variable interest rate on
loans. The private student loans interest rate is determined by
the borrower's (and/or in some cases, co-signers') credit score
whereas the PLUS student loan has a fixed interest rate of 8.5%
that is not based on or determined by your credit score. In most
cases the PLUS student loan will be less expensive to repay than
most private student loans.
Consolidating the Student PLUS
Loans
One of the biggest advantages of Grad PLUS loans is that they
can be easily consolidated with the other federal student loans,
such as the Stafford student and Perkins student loans. This
option is not available with a private loan!
Economic Hardship Deferment.
You can apply the balance of the Grad PLUS loan towards an
economic hardship deferment whereas you can not with a private
student loan.
Student PLUS Loans Cosigner.
If the student has an adverse credit history a parent may be
added to the loan as an endorser to help pay for the loan.
Student PLUS Loans Require FAFSA
Application.
Students seeking private student loans do not need to submit the
Free Application for Federal Student Aid Application (FAFSA)
whereas Graduate and professional students who borrow the Grad
PLUS loan must submit the and max out the Stafford Loan first.
In other words, students must have applied for their annual loan
maximum eligibility under the Federal Subsidized and
Unsubsidized Stafford Loan Program before applying for a
Graduate/Professional PLUS loan before they are eligible for
Student PLUS Loans.
A key point to remember regarding the PLUS Loan is the Graduate
and Professional Student PLUS loan will not reduce a student's
eligibility for the Stafford Student Loan, but the PLUS Student
loan limit will take the amount borrowed under the Stafford Loan
into consideration. The PLUS Student loan is restricted to the
cost of attendance minus aids received. Aid received will be
certified by the students institution.
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Major
Benefits of the Grad PLUS Loan
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Students
can lock in your graduate student loan payments with
a fixed interest rate;
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Repayment on your Grad PLUS loan is deferred as long
as you’re enrolled at least half time which means no
payments will be due while you’re in school;
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Students
can borrow up to 100 percent of the cost of your
education costs; and
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Repayment Flexibility and consolidation: Grad PLUS
student loans can be consolidated with other Federal
Student Loans and come with various repayment
options.
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