Direct Graduate PLUS Loan
What are Direct Graduate PLUS Loans?
The Direct Graduate PLUS Loan is available through the Direct Loan Program to help graduate students in the Physician Assistant or Medical MMS Programs pay for their education. However, Direct Graduate PLUS Loans should only be used after exhausting your maximum annual Direct Loan eligibility. Graduate students must first borrow the annual Direct Loan maximum limit of $20,500 ($8,500 maximum Subsidized and $12,000 maximum Unsubsidized) before receiving a Direct Graduate PLUS Loan and be enrolled in the Physician Assistant or Medical MMS Program.
Direct Graduate PLUS Loans are not based on financial need but may not exceed the total cost of attendance less any other financial aid.
- Payments are deferred as long as the graduate student remains at least half-time
- The fixed interest rate is 7.9%.
- There is no prepayment penalty.
- The credit criteria are generally more lenient than for private loans.
- Eligible to be consolidated with Stafford and Perkins Loans.
- In cases of economic hardship, repayment may be deferred for up to three years.
- In the event of permanent disability or death, the loan will be forgiven.
In addition to having completed a FAFSA and first exhausting the $20,500 in annual Direct Loan eligibility, a graduate student must be enrolled in school at least half-time, must maintain Satisfactory Academic Progress and be enrolled in the Physician Assistant or Medical MMS Program. The Office of Financial Aid determines the amount of Direct Graduate PLUS Loan eligibility in accordance with federal requirements.
Eligibility for the Direct Graduate PLUS Loan depends on a modest credit check that determines if the graduate student has what is termed an “adverse credit history.” An “adverse credit history” is defined as being more than 90 days late on any debt or having any Title IV debt within the past five years subjected to default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off. This credit check is performed by the Department of Education upon applying for the Grad Plus Loan.
How Much Can Be Borrowed?
Graduate students may borrow up to their total cost of attendance less other financial aid received such as loans or scholarships. The total cost of attendance is determined by the Office of Financial Aid based on an average cost for tuition, books, room and board, travel, and miscellaneous expenses for the academic year. It is important for each individual to fully understand how a Direct Graduate PLUS Loan will impact them financially. Most financial experts advise that one should not incur debt (excluding mortgage debt) that results in total monthly payments (debt-to-income ratio) exceeding 20% of your monthly gross income.
The interest rate is fixed at 7.9%.
For all Direct Graduate PLUS loans made between July 1, 2011 and June 30, 2012, the origination fee will be 4.00% of the principal loan amount. However, there is an automatic rebate amount equal to 1.50% of the principal loan amount. Therefore, the actual total up-front fee is only equal to 2.50% of the principal loan amount. The 2.50% fee is deducted from the principal at each disbursement.
Loan amount: $2,000
Total up-front fee (2.50%): -$50
Amount disbursed Fall: $975
Amount disbursed Spring: $975
To retain the up-front interest rebate of 1.50%, a borrower must make the first twelve monthly payments on time.
If all of the twelve monthly payments are not made on time, the rebate amount is added to the borrower's principal loan balance, which will increase the loan amount that must be repaid.
How do students apply for a Direct Graduate PLUS loan?
Go to: https://studentloans.gov and apply for the Grad Plus Loan
Upon approval of your Direct Graduate PLUS Loan, you must complete Direct Graduate PLUS Loan Entrance Counseling online (one-time requirement) and also the Grad Plus Master Promissory Note (This contract can be valid for up to 10 years as long as the graduate student borrows every 12 months).
Loan proceeds will be sent directly to the University. The disbursement will reflect the amount of the loan less origination fees (4 %). The proceeds will be applied to the graduate student’s account to clear any balances. The Bursar’s Office will notify you of any refund once your account is clear.