How Do Graduate Student Loans Work
The cost of education is rising, and that means students are increasingly looking for ways to pay for their education.
That’s where federal student loans come in. They’re a great way to get the money you need, with flexible repayment terms and a plethora of repayment options. But they can be confusing to navigate — especially if you’re new to student loans.
So we’ve put together this guide to help you understand your federal student loans for grad school so that you can make the most of them!
Federal Student Loans For Grad School
The U.S. Department of Education makes Direct PLUS Loans to eligible graduate or professional students through schools participating in the Direct Loan Program. (We also offer Parent PLUS loans.)
A Direct PLUS Loan is commonly referred to as a grad PLUS loan when made to a graduate or professional
To receive a grad PLUS loan, you must
be a graduate or professional student enrolled at least half-time at an eligible school in a program leading to a graduate or professional degree or certificate;
not have an adverse credit history (unless you meet certain additional eligibility requirements); and
meet the general eligibility requirements for federal student aid.
What is the current interest rate?
For Direct PLUS Loans first disbursed on or after July 1, 2021, and before July 1, 2022, the interest rate is 6.28%. This is a fixed interest rate for the life of the loan.
How much can I borrow?
The maximum PLUS loan amount you can borrow is the cost of attendance (determined by the school) minus any other financial assistance you receive.
When do I begin repaying my loan?
You don’t have to start making payments until six months after you graduate, leave school, or drop below half-time enrollment.
During any period when you’re not required to make payments, interest will accrue on your loan. You may choose to pay the accrued interest or allow the interest to be capitalized (added to your loan principal balance) when you have to start making payments. Your loan servicer will notify you when your first payment is due.
How do I apply for a grad PLUS loan?
Important: Most schools require you to apply for a Direct PLUS Loan online, but some schools have different application processes. This site has a list of schools that participate in the Direct Loan Program. When you select your school from the list, the site will tell you if the school has a different application process. In that case, check with the school’s financial aid office to find out how to request a grad PLUS loan.
parent plus loan
The U.S. Department of Education makes Direct PLUS Loans to eligible parents through schools participating in the Direct Loan Program. (We also offer PLUS loans for graduate or professional students.)
A Direct PLUS Loan is commonly referred to as a parent PLUS loan when made to a parent borrower.
To receive a parent PLUS loan, you must
be the biological or adoptive parent (or in some cases, the stepparent) of a dependent undergraduate student enrolled at least half-time at an eligible school;
not have an adverse credit history (unless you meet certain additional requirements); and
meet the general eligibility requirements for federal student aid
Note: Grandparents (unless they have legally adopted the dependent student) and legal guardians are not eligible to receive parent PLUS loans, even if they have had primary responsibility for raising the student.
What is the current interest rate?
For Direct PLUS Loans first disbursed on or after July 1, 2021, and before July 1, 2022, the interest rate is 6.28%. This is a fixed interest rate for the life of the loan.
How much can I borrow?
The maximum PLUS loan amount you can borrow is the cost of attendance at the school your child will attend minus any other financial assistance your child receives. The cost of attendance is determined by the school.
Do I have to make payments on my loan while my child is still in school?
If you request a deferment, you will not need to make payments while your child is enrolled at least half-time and for an additional six months after your child graduates, leaves school, or drops below half-time enrollment. If the school your child is attending requires you to submit your request for a parent PLUS loan at StudentAid.gov, you’ll have the option of requesting a deferment as part of the loan request process. You can also contact your loan servicer to request a deferment.
If you do not request a deferment, you will be expected to begin making payments after the loan is fully disbursed (paid out).
During any period when you’re not required to make payments, interest will accrue on your loan. You may choose to pay the accrued interest or allow the interest to be capitalized (added to your loan principal balance) when you have to start making payments. Your loan servicer will notify you when your first payment is due.