If you are attending college and entering into grad school, you may be looking for a loan to help you afford the cost of tuition and other expenses. Fortunately, there is a federal student loan program known as the Grad PLUS loan, which can help you financially when you want to attend grad school.
If you do not know much about this loan, you are not alone, and we will go over it in depth below to help you get a good idea of what it is and who can apply for it.
Who Qualifies for a Grad PLUS Loan?
It is important to note that there are eligibility requirements that you must meet to receive a Grad PLUS loan and not everyone will qualify.
First things first, this is not a financial need based loan, so how much money you make is not weighted as heavily here and if you are considered low income, it does not automatically qualify you for this loan. However, you still must fill out the FAFSA yearly in order to be eligible for the Grad PLUS loan.
To qualify, all borrowers will need to pass a credit check performed by the loan servicer and you must have exhausted and used up all of your Federal Stafford loans.
The Grad PLUS loan is ONLY able to be borrowed by students who are considered professional or graduate students. This means that you must be enrolled in a Master’s, Doctorate, or other similar degree program, including veterinary school, J.D. degree, and other professional degrees. Bachelor degrees do not count.
Does My Credit Score Affect My Grad PLUS Loan?
While your credit score does not have to be considered perfect, you will need to have a credit score that does not reflect any adverse or negative credit history. Some adverse credit history disqualifiers include:
- Severely delinquent accounts
- Wage garnishments
- Write offs
Now, if any of this information is older than five years prior to the date the credit report is run, it will not count against you.
If you do not qualify for a Grad PLUS loan due to your credit history, you may have the option to add a cosigner to the loan, which might then make you eligible to receive it. Of course, your cosigner will need to meet all of the eligibility requirements for the credit section as well. If you do not have a cosigner and do not qualify for a Grad PLUS loan alone, you can look into student loans that are available without a cosigner.
What Are Some of the Benefits of the Grad PLUS Loan?
When it comes to taking out a loan for your schooling, you want to make sure that the loan is going to work in your favor and not cause you to struggle too much with debt when you graduate.
The Grad PLUS loan offers a number of benefits to those who borrow including the following:
- Cosigner is not required for those who qualify
- Repayment is deferred while the student is enrolled at least half time
- Fixed interest rate of 6.84%
- Interest is considered tax deductible
How Much Can I Borrow?
The amount of money you can borrow depends on your enrollment status and the cost of tuition for your program. You are only able to borrow what is needed for your educational costs.
For example, if the total cost for your chosen program is $45,000 and you receive roughly $21,000 in aid from Federal Stafford loans and no other financial aid, you would be eligible to borrow up to $24,000 to cover the remaining costs.
When it comes to the release of the funds, you will typically see the funds applied to your account at your chosen school. The amount is often applied first to your due tuition, then books, and other related costs to your education.
If you are interested in the Grad PLUS loan, you want to make sure you fill out the free FAFSA and speak with your financial aid counselor as he or she can help you make the right decisions about loans and applying for aid. If you are ineligible for Grad PLUS loans, you may want to see if you are eligible for a private student loan.