Federal Graduate PLUS Loan
The Federal Graduate PLUS Loan is a loan limited to graduate students. While it is similar to and takes its name from the Federal Parent Loan for Undergraduate Students (PLUS), the graduate student (and not their parent) is the borrower.
Like other student loans, the Grad PLUS Loan has a 10-year repayment cycle. However, repayment is not automatically delayed until after the graduate student leaves school (though most lenders offer a delay in repayment). Students can work with their lender to seek an in-school deferment option though interest will be accumulating during this time.
Federal PLUS Loans (for either parents and graduate students) have a fixed 8.5% interest rate. However, lenders may provide borrower benefits that can reduce this rate. PLUS Loans can also have up to a 3% origination fee that is kept by the lender upon disbursement of the loan.
Overall, Grad PLUS is a helpful way for students to address educational expenses through a federal, low-interest loan that spreads costs over a longer period and allows for manageable, monthly payments. It is a federal option to lessen reliance on alternative educational loan borrowing.
APPLYING FOR THE GRAD PLUS LOAN
Students eligible for the Grad PLUS Loan will be offered it via the UC online award offer. Grad PLUS eligibility is based on the UC-budgeted estimate of educational expenses minus other aid.
At present, graduate students wishing to borrow the Grad PLUS can complete the credit check along with the application and promissory note as directed in the sidebar to the right.
Some students use Grad PLUS funds to cover books and other non-billed expenses while other graduate students are only looking to borrow for billed costs. As a borrower, a graduate student may well wish to limit debt and elect to borrow a lesser amount than offered. Students who later wish to raise or lower their annual Grad PLUS Loan after accepting an amount would do so by contacting Student Financial Aid.
CREDIT CHECK
Each time a borrower accepts or increases a Grad PLUS Loan, a credit check is performed. Students denied the Grad PLUS Loan may need to work with their lender to see if their credit situation can be improved for loan approval.
MASTER PROMISSORY NOTE
The Grad PLUS Master Promissory Note (MPN) is an open-ended loan note that allows borrowing for multiple years. Because each loan program (i.e., Federal Perkins, Federal Stafford, Federal Graduate PLUS, Federal Parent PLUS) has a unique MPN, new Grad PLUS borrowers will have to complete the Grad PLUS promissory note even if they have an MPN on file for another type of student loan. Students who previously borrowed a Grad PLUS Loan will not need to complete an additional MPN. However, a credit check will still occur following acceptance of the loan.
Only when the credit check, promissory note, and UC certification are complete can Grad PLUS Loan funds be sent to UC for the appropriate quarter.
LOAN COUNSELING
Students borrowing a Federal Grad PLUS Loan at UC for the first time will also need to complete Loan Entrance Counseling. While it is similar to loan counseling required when you took out a Federal Stafford Loan, it again demonstrates the U.S. Department of Education and UC's commitment to having you understand the responsibilities of loan borrowing.
Failure to complete this requirement can hold up the posting of your loan funds to your student bill and creation of any refund payments.
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