If additional loan funding is needed to cover the cost of attendance, student have the option to apply for a Federal Direct Graduate PLUS loan. In order to qualify, you must complete the FAFSA, meet all federal requirements for eligibility and be packaged with your Stafford loan eligibility first. After you meet these requirements, you may borrow Graduate PLUS loan funds up to the cost of attendance less any other financial aid. For example:
- 2012-13 Student Expense Budget $78,112
Federal Stafford loan eligibility $20,500
Graduate PLUS loan eligibility $57,612
Unlike the Stafford loans, the Graduate PLUS is approved based on a student's credit. A credit check is required to determine that the applicant does not have an adverse credit history (according to federal guidelines, adverse credit history means no past-due payments, charge-offs, or collections in the past 90 days). If you have an adverse credit history, you have the option to use an endorser on the application in order to get approved.
The Graduate PLUS loan does not have a grace period. Instead, it has a post-enrolment deferment period which acts in the same way as a grace period. And because this loan is unsubsidized, the interest would accrue during this period much like the unsubsidized Stafford loan.
The current fixed interest rate for the Graduate PLUS loan is 7.9%. There is a 4% origination fee taken from each disbursement of the loan. For students attending the full academic year, this loan will typically have two disbursements and therefore two fees for the fall and spring semesters respectively.