Grad Plus Loan Application Tips for Graduates
The Grad Plus Loan is a financial aid program that provides grants, loans, and work-study to eligible students who are graduates or professionals. In this article, we show you the application process and tips for applying.
Graduate and professional degree students can borrow up to their cost of attendance, minus other expected financial aid, through the Plus Loan Program. In this article, we’ll walk you through the application process and provide you with some helpful tips.
What is a Graduate Plus Loan?
The Graduate Plus loan, often known as a Grad Plus loan, is a federal student loan or Direct Plus loan provided by the United States Department of Education.
A Grad Plus loan is intended to assist graduate students with their educational expenses. This tutorial will explain whether you are eligible for a Graduate Plus Loan and how to apply for one.
It probably comes as no surprise to most graduate students that higher education may be costly.
Many students may be astonished to learn that paying for graduate school is much more difficult than paying for undergraduate school because grad students have access to fewer resources such as scholarships and grants.
Even if they didn’t have to borrow for undergraduate school, many graduate students may need to use student loans to finance some or all of the costs of their degree. Grad school debt can quickly spiral out of control for those who aren’t attentive.
The federal Grad Plus loan, which covers up to the full cost of graduate school, including living expenses, less any other financial aid, is a popular choice among graduate students.
While the Grad Plus loan offers relatively high borrowing limits, it also has a high fixed interest rate and costs, so it’s critical to be well-informed and cautious when considering it.
Federal Graduate Plus Loans
Graduate and professional students can use federal Grad Plus loans to cover any leftover educational expenditures not covered by other sources of student financial aid.
The Grad Plus program is similar to the Parent Plus program in that it has the following terms and conditions:
‣ A decision that the applicant does not have a credit history that is unfavorable.
‣ Repayment begins on the date of the loan’s last disbursement.
‣ A fixed interest rate is set by the Department of Education on an annual basis.
‣ The Department of Education charges an origination fee that is deducted from the loan amount each time it is disbursed.
‣ The student is the borrower of a Federal Grad Plus loan, which is a significant difference between the Grad Plus and Parent Plus programs. At the graduate course level, the parent is not eligible to borrow this loan on behalf of their student.
If you’re trying to figure out how to pay for graduate school, you’ve probably heard of the Grad Plus loan. These federal student loans for graduate students may be a reasonable option for paying for graduate school.
However, like with any debt, it’s critical to thoroughly comprehend the financial consequences before applying.
Understanding Grad Plus Loans for Graduate Students
What are Graduate Plus Loans, exactly? Simply explained, they’re federal student loans available to graduate and professional school students.
After a student has used up all of their Direct Unsubsidized Loan funds, they may apply for a Graduate Plus Loan, which is part of the federal Direct Plus Loan program (a type of a federal student loan).
The Graduate Plus Loan may be a possibility for you if you’ve hit the Direct Unsubsidized Loan limit of $20,500 per year and still need funds to afford the expense of grad school.
Bank-sponsored private student loans may be another option worth exploring, especially if you have good credit.
Grad Plus Loans include a fixed interest rate and borrowing limits that are variable. The interest rate for the academic year 2020-21 is 5.30 percent.
An origination fee is charged by the US Department of Education to cover the cost of granting your loan. The cost is 4.236 percent in this example, and it is removed from the total loan amount before funds are given to the institution.
The Federal Direct Grad Plus Loan Program is a loan for graduate students with good credit who need help paying for their education.
Students must fill out the Free Application for Federal Student Aid (FAFSA), be enrolled at least half-time (4.5 credits or more) each term, and maintain Satisfactory Academic Progress.
Graduate Plus Loans are not based on financial need, and they require a separate application. Before seeking a Grad Plus Loan, students should first exhaust their eligibility for Federal Unsubsidized Direct Loans.
Note that graduate students’ parents are not eligible for either the Parent Plus or the Grad Plus loan.
Requirements and Eligibility for Grad Plus Loans
In order to apply for Graduate Plus Loans, you must meet certain requirements.
If this sounds like a good fit for helping you fund your future, you might wonder if you’re eligible for a Graduate Plus loan.
You must meet the following criteria to qualify for a Graduate Plus Loan:
‣ You are a graduate or professional student enrolled at least half-time in a graduate or professional degree or certificate program at an eligible school.
‣ You have no negative credit history (unless you meet certain additional eligibility requirements). This implies your credit report shows no student loan defaults, long-term delinquencies, or bankruptcies.
‣ Consider applying with a cosigner if you have a poor credit history; however, keep in mind that the cosigner is legally liable for repaying your loan if you are unable to.
‣ You meet the standard federal student assistance eligibility requirements, which include being a U.S. citizen or eligible noncitizen, possessing a social security number, and making satisfactory academic progress.
Eligibility Criteria for Application
To be eligible for the Grad Plus Loan, the student must pass a credit check that shows they have no credit problems.
The credit decision is made by the US Department of Education (not UW-W), and they define adverse credit history as being 90 days or more.
Behind on any debt or having any debt subjected to default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off within the last five years.
‣ If a student is not eligible for the Grad Plus, they have the following options:
‣ If you choose this option, StudentAid.gov will provide instructions on how to appeal the credit decision.
‣ Obtain a co-signer (the endorser) – if this option is chosen, the endorser must fill out the “Endorse Direct Plus Loan” portion on StudentAid.gov using their own FSA ID.
‣ Undecided – If you choose this option, we will be unable to process your Grad Plus Loan Application request.
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The Grad Plus Loan Application Process
For the appropriate aid year, students must complete the Grad Plus Loan Request process. Every year that a student chooses to borrow a Grad Plus Loan, a new application must be completed.
StudentAid.gov is where you submit your Grad Plus application. You must specify the amount you wish to borrow on the application. Students can borrow up to the cost of attendance, less any additional financial aid.
The following are the processes that the US Department of Education requires in order to acquire a Plus loan:
1. Fill Out an Application for a Plus Loan
To get their loan, all Federal Graduate Plus Loan borrowers must complete the Plus Loan Application. If you want to get a loan, you must fill out this annual application every year.
To complete the Plus Loan Application, follow the steps below:
Use Chrome, Safari, or Firefox to visit StudentAid.gov (they do not recommend using Internet Explorer).
‣ Using the student’s Federal Student Aid ID, click “Log In” (FSA ID).
This is the same FSA ID that the student used to apply for financial aid.
Make sure you’re logged in as the student, not someone else; you’ll need the student’s FSA ID.
‣ Select “Apply for a Plus Loan” from the “Apply for Aid” menu at the top of the page.
‣ Click “Learn More” and then “Start” in the “I am a Graduate or Professional Student” box.
Follow the on-screen instructions from there.
2. Filing a Master Promissory Note
To get their loan, all first-time Federal Graduate Plus Loan applicants must file a Master Promissory Note (MPN). The MPN is a document that you sign acknowledging that the Federal Direct Loan is a debt you must repay.
The MPN for the Federal Graduate Plus Loan is distinct from and separate from the MPN you signed for your Unsubsidized Federal Direct Loan.
To finish the MPN, follow the steps below:
Use Chrome, Safari, or Firefox to visit StudentAid.gov (they do not recommend using Internet Explorer).
‣ Using the student’s Federal Student Aid ID (FSA ID), click “Log In.”
This is the same FSA ID that the student used to apply for financial aid. Make sure you’re logged in as the student and not someone else; you’ll need the student’s FSA ID to do so.
‣ Select “Complete a Master Promissory Note (MPN)” from the “Complete Aid Process” menu at the top of the page, and then “MPN for Graduate/Professional Students.”
‣ Select “Start” under the “MPN for Direct Plus Loans” section and fill in the required information.
‣ Make sure to hit “Submit” once you’ve completed all sections of the MPN.
3. Receipt of Annual Student Loans
The Annual Student Loan Acknowledgement is available to new students, continuing students, and Plus Loan borrowers. This tool allows new borrowers to see their average federal loan indebtedness while existing borrowers can see their unique federal loan debts.
To complete the Annual Student Loan Acknowledgement, follow the steps below:
‣ Use Chrome, Safari, or FireFox to visit StudentAid.gov (they do not recommend using Internet Explorer).
‣ Using the student’s Federal Student Aid ID, click “Log In” (FSA ID).
This is the same FSA ID that the student used to apply for financial aid. Make sure you’re logged in as the student, not someone else; you’ll need the student’s FSA ID.
‣ Select “Complete Annual Student Loan Acknowledgement” from the “Complete Aid Process” menu at the top of the page, then “Start.”
‣ Then, in the “State” box, type WI, and then in the “School Name” box, type University of Wisconsin-Whitewater.
‣ Select “View Data” after entering the student’s Degree/Certificate and Field of Study.
Read the information on the page as you scroll through it.
‣ “Complete Your 20##-20##” section at the bottom of the page.
‣ Select “I understand the borrowing guidelines you’ve shown me.” in the “Acknowledgement” box, then click “Submit.”
Borrowers wanting to appeal or acquire an endorsement due to bad credit must attend Plus Loan Credit Counseling. To complete Plus Credit Counseling, students must log in to StudentAid.gov using their personal FSA ID.
Using someone else’s FSA ID is considered fraud.) Use just your personal FSA ID data. The Plus Loan Credit Counseling session lasts about 15-20 minutes.
You may wish to have information on your income, financial aid, and living expenditures before beginning therapy. This contains data from your account as well as information about your future earnings, financial aid, and living expenses if any are known.
Select “Apply for Aid” and then “Complete Plus Credit Counseling” once you’ve signed into StudentAid.gov.
4. Loan Processing
The GSAS Office will send you an award letter explaining the amount and disbursement schedule for your loans once you have been approved for a Graduate Plus Loan. You are under no obligation to take out this loan.
If you have a debt outstanding on your account as a result of the cancellation of this loan, please make other arrangements for your bill before registering to avoid a hold being placed on your account.
You can apply for a return of your credit balance through Student Financial Services once you’ve completed all loan and course enrollment requirements.
Grad Plus Credit Counseling
Borrowers wanting to appeal or acquire an endorsement due to bad credit must attend Plus Loan Credit Counseling. To complete Plus Credit Counseling, students must log in to StudentAid.gov using their personal FSA ID.
Using someone else’s FSA ID is considered fraud.) Use just your personal FSA ID data. The Plus Loan Credit Counseling session lasts about 15-20 minutes.
You may wish to have information on your income, financial aid, and living expenditures before beginning therapy. This contains data from your account as well as information about your future earnings, financial aid, and living expenses if any are known.
Select “Apply for Aid” and then “Complete Plus Credit Counseling” once you’ve signed into StudentAid.gov.
Counseling for Exit Loans
There is what we call, exit counseling for student loans. If a student receives federal loans, they must complete Exit Loan Counseling at STUDENTAID.GOV if they withdraw, drop below half-time enrollment, or graduate.
Loan Fees and Interest Rates
There is a loan fee and interest rate on all Grad Plus loans.
The loan fee is calculated as a percentage of the loan amount and is deducted proportionally from each distribution. For loans with a first payout date on or after October 1, 2020, but before October 1, 2023, the charge is 4.228 %.
Each year, interest rates are set based on an index rate. Once a loan’s interest rate is set, it is locked in for the duration of the loan. 7.54 % interest rate is accrued for loans disbursed from July 1, 2022, to June 30, 2023.
To double-check and get the precise amount of loan fees and interest rates, you should visit the student aid website. Furthermore, you can calculate using online loan calculators.
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Deadlines For Submitting Grad Plus Loan Applications
The Plus Loan Application is available at the end of May, just before the start of the fall semester, and we urge that you complete all of these processes by August 1 for the fall semester (or prior to December 1 for the spring term).
If an application is received fewer than 30 days before the start of the semester, we cannot guarantee that funds will arrive before the tuition date.
For funds to post by the billing due date and refunds to be accessible as soon as feasible, students should file loan applications by the following schedule.
Students can still apply for loans beyond the deadline, however, the loan may not post to the student’s account until the following month.
‣ Fall Semester: Second week in July
‣ Spring Semester: Second week in November
‣ Summer Semester: First week in June
Tips For Applying For Grad Plus Loans
When applying for Grad Plus Loans there are many things to consider and keep in mind.
1. To qualify, you must show that you are creditworthy
Graduate Plus loans, unlike federal Direct Unsubsidized Loans, need proof that you don’t have a bad credit history.
If you have a bad credit history, you may be needed to find an “endorser” (or cosigner) with a better credit history, or you may be required to document the extenuating circumstances that led to your bad credit.
As a result, some borrowers resort to the private student loan market for the funds they require to continue their education.
Alternatively, you can work to improve your credit before starting graduate school to increase your chances of getting a Grad Plus loan.
Delaying your decision to attend graduate school can, of course, allow you more time to save money and reduce the amount of money you will need to borrow.
2. A FAFSA form is required to unlock Grad Plus loans
When you fill out the Free Application for Federal Student Aid, you’ll find out if you’re eligible for a Grad Plus loan (FAFSA). Additionally, you will be eligible for federal loan perks like income-driven repayment.
The application process is straightforward, and the benefits offered by federal student loans are often superior to those offered by many private student loans. Graduate Plus loans might be a very appealing option because of this.
3. Interest begins to accrue as soon as your loan is disbursed
Although you are not required to make payments if you are enrolled at least half-time in a graduate program, interest on your Grad Plus loan begins to accrue the moment it is disbursed.
Interest accrues on other student loan alternatives as well, but this is an excellent reason for borrowing as little as feasible. Making interest-only payments while in school will also help to prevent interest from accruing once you begin repayment.
4. You have the option of borrowing up to the full cost of attendance
The highest amount you can borrow for the graduate school under the federal Direct Unsubsidized Loan program is $20,500 per year, with a lifetime ceiling of $138,500.
A graduate Plus loan, on the other hand, permits you to borrow up to the cost of attendance, less any other financial help.
If you meet the eligibility requirements, you may be able to pay for graduate school entirely with federal loans (see below). This is a distinct advantage if you’re wary of the private student loan industry.
However, keep in mind that any money borrowed through grad Plus loans must be repaid. If you decide that the loan is unneeded, you can simply decline all or part of it before it is disbursed.
Students’ Expenses Covered by Grad Plus Loans
With the exception of other financial help earned – such as scholarships, fellowships, grants, and so on – the Graduate Plus Loan can pay the whole cost of attendance for your graduate program. There is no maximum loan amount.
The following items are included in the cost of attendance:
‣ Fees and tuition
‣ Books and materials
‣ Board and lodging
‣ Transportation
‣ Equipment and Technology
‣ Personal Expenses and miscellaneous costs
Benefits of the Graduate Plus Loan
A Graduate Plus Loan has benefits that are similar to those granted by other federal student loans. Graduate Plus loans, for example, have a set interest rate that will not increase (or decrease) for the term of the loan.
Loan payments can also be deferred while you’re in school, as long as you’re enrolled at least half-time in an accredited program, and for another six months after you’ve graduated or fell below half-time status.
Graduate Plus Loans come with a variety of repayment options, and the interest you pay on your loan may be tax-deductible.
Mistakes to Avoid When Choosing a Grad Plus Loan
If you need to borrow money to pay for graduate school or a professional school like medical school or law school, careful borrowing might save you a lot of money in the long run. Here are four costly blunders to stay away from:
1. Avoid First Exhausting Unsubsidized Student Loans
When it comes to financing graduate education, federal direct student loans should always be your first choice, but not all of them have the same terms.
Federal direct unsubsidized student loans have the lowest interest rates among federal student loans, at 5.28 percent for those taken out on or after July 1, 2021, and before July 1, 2022.
Plus a 1.057 percent origination fee for those taken out on or after October 1, 2020, and before October 1, 2022. These loans are available to graduate students for up to $20,500 per year.
Graduate students can also take out federal Grad Plus loans, which have a higher interest rate of 6.28 percent for loans taken out after July 1, 2021, and a higher origination fee of 4.228 percent for loans taken out after October 1, 2021, and before October 1, 2022.
These loans allow graduate students to borrow up to the cost of attendance less additional aid, although they are not the most affordable choice.
The FAFSA, or Free Application for Federal Student Aid, assesses eligibility for federal student loans. You will be eligible to borrow federal unsubsidized loans after you complete the form and your eligibility is approved.
Graduate and professional students are not eligible for subsidized student loans, in which the federal government covers the interest while the student is in school, and in some other instances, federal Pell Grants.
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2. Avoid Borrowing Too Much
It’s crucial not to take on more debt than you can afford to repay, and you shouldn’t take on more than you absolutely need.
That is to say, you should not automatically borrow the entire cost of attendance and should only accept what you require. You can borrow less than what is given if you have room in your budget.
The Consumer Financial Protection Bureau’s “financial path to graduation tool” is a free online tool that can help you understand a school’s financial assistance offer, plan for all remaining fees, and determine how much debt you can afford to repay.
You can always choose to borrow more based on your remaining eligibility if you discover later in the semester that you didn’t borrow enough.
3. Avoid Paying Interest During School Time
Keep in mind that while you’re in school, interest accrues on both federal and private loans.
After graduation, the accrued interest will be added to the loan’s principal, potentially increasing the loan’s cost. You’ll be paying interest on interest after the interest becomes part of the principal, which is known as capitalization.
Making interest-only payments while you’re still in school can help you save money.
4. Avoid Interest Rates Comparison
Graduate student borrowers can examine interest rates in the private market after exhausting federal unsubsidized loans before acquiring Grad Plus loans. Borrowers can frequently find lower interest rates and no origination costs, potentially saving them money in the long run.
Furthermore, graduate students may have better credit records than undergraduate students and can often obtain these loans without the requirement of a cosigner.
When applying for a Grad Plus loan, a credit check is necessary, although there are exceptions if you have a bad credit history, such as obtaining an endorser.
Consider a variety of loan alternatives and compare interest rates and terms to find the best loan for your unique situation.
Be aware that variable-rate private student loans allow interest to fluctuate over time, so while the rate may be modest at first, it is likely to alter over time and become substantially higher afterward.
Borrowing through a charity or state-based organization is one option to examine because these lenders adhere to a strict set of consumer protections and offer fixed-interest loan alternatives with minimal or no origination costs.
Borrowers should be aware that private loans are not eligible for certain federal student loan repayment perks, such as Public Service Loan Forgiveness and federal income-driven repayment programs.
Alternative Options for Funding Your Graduate Degree
Federal student loans are a wonderful option for financing graduate education. However, before you take out student loans, look into non-repayable funds such as scholarships, grants, fellowships, and assistantships.
Use online resources, such as this free Graduate School Scholarship Search tool, to find scholarships tailored to graduate students. You may still require additional finances after you’ve maximized money you don’t have to repay and looked into federal student loans.
When this happens, a private student loan may be the best option. Because most private student loans don’t have an origination fee and some have longer payback terms, they can be a good deal.
Whatever method you use to pay for your graduate degree, you can be confident that you’re making a long-term commitment and investment in your future.
Frequently Asked Questions
The following questions and answers will provide you with more insight into the subject.
1. Are FAFSA student loans available for master’s degrees?
Absolutely. Although graduate students are eligible to file the FAFSA, just 64% of grad students did so for the 2016-2017 school year.
Your first step should always be to complete the Free Application for Federal Student Aid (FAFSA). This gives you the opportunity to apply for federal and state financial aid.
2. Do I have to apply for a Graduate Plus loan every semester?
Students can apply for a Graduate Plus Loan at https://studentloans.gov under the section “Complete Plus Request Process” after completing the FAFSA. Each academic year, you will need to reapply for a new Graduate Plus loan.
3. Should I take out a private student loan or a Parent Plus loan?
Parent Plus Loans are the most popular loan program for parents who want to assist their children to pay for college. Private parent loans, on the other hand, frequently have lower interest rates and no origination costs.
4. Can I get a student loan for fees of only one semester?
A student may only borrow up to the school’s estimated cost of attendance, minus financial help and additional study student loans. The remainder of that equation is the amount a student is eligible to borrow, and it can only be determined one academic year at a time.
5. Can I get student loans if I’m on academic probation?
Yes, even if you are on academic probation, you can still receive financial aid. Each institution, however, has strong restrictions in place to help you stay on track.
6. Is it worth it to take loans to go to Harvard University?
If you have made it to Harvard, there is no doubt in my mind that you should attend.
All need-based aid recipients, regardless of citizenship or federal aid eligibility, are eligible for the Harvard Loan. Harvard pays the interest on a need-based loan during the enrollment, grace, and deferment periods.
7. Are loans considered financial aid?
Yes, they are in a way. Financial aid is money given to students to assist them in paying for college or vocational education. Grants, work-study, loans, and scholarships can help you afford college or career school.
8. How much does FAFSA cover for graduate students?
Direct Unsubsidized Loans are available to graduate and professional students for up to $20,500 per year. Direct Plus Loans: You can use a Direct Plus Loan to pay for expenses that aren’t covered by your school’s other financial aid.
9. Can I get into FAFSA if I have defaulted on student loans?
If you have defaulted on student loans, you will be unable to apply for FAFSA. To recover federal student aid eligibility, you must first get your student loans out of default. You must first get your student loans out of default before applying for financial aid.
10. Is there a way to have federal student loans sent directly to you?
If any money from grant or student loan disbursements remains after tuition, fees, and room and board have been paid, the remainder, known as a credit balance, will be paid directly to you in cash or check or deposited into your bank account.
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CSN Team.