Federal Graduate PLUS Loans
Graduate and professional students are now eligible to borrow under the federal PLUS Loan Program. The Graduate PLUS loan amount is limited to the cost of attendance minus other estimated financial assistance. The terms and conditions applicable for federal Parent PLUS Loans apply to the Graduate PLUS Loan program. But unlike parent borrowers of the Parent PLUS loan, graduate student borrowers are expected to receive an in-school deferment of repayment, though interest will accrue after full disbursement of the loan. The borrower cannot have an adverse credit history. The loan has a fixed interest rate, a 4% loan origination fee.
Eligibility
- Creditworthy graduate and professional students are eligible to borrow in program as long as student is enrolled at least half time and degree seeking.
- Borrower must be a U.S. citizen, U.S. national, or permanent resident of the United States.
- Borrower cannot be in default on a federal education loan or owe a repayment of Federal Title IV aid.
- Financial need is not a requirement to obtain a PLUS Loan, but the borrower is responsible for interest that accrues.
Award Amounts
PLUS Loan limits are determined by the estimated cost of attendance less any other aid. For the Grad PLUS program it is assumed the student will borrow the maximum amount available in the Federal Stafford Loan program.
Interest Rates and Fees
For PLUS Loans disbursed between July 1, 2008, and June 30, 2009, the interest rate is fixed at 7.9%. In Summer 2008, up to 4% in fees may be charged to the borrower. Beginning in Fall 2008, the effective up front fee will be 2.5% of the loan. For example, the proceeds of a $10,000 loan will be reduced by $250. If the borrower fails to make 12 consecutive on-time payments, they will be billed an additional 1.5% fee.
Steps to apply for a Federal PLUS Loan
- File the Free Application for Federal Student Aid (FAFSA) at www.fafsa.ed.gov (this is a requirement for Grad PLUS and recommended for Parent PLUS) and submit all documents requested by the Division of Financial Aid (DFA); check for required documents via the online Financial Aid Self Service system through www.ssinfo.purdue.edu.
- DFA will send the student an Award Notice that the borrower can use to determine loan period, the type of eligibility, and the amount of eligibility; the borrower needs to determine how much they want to borrow. Grad PLUS borrowers will be able to indicate loan amount for 2008-09 via the online Financial Aid Self Service system through www.ssinfo.purdue.edu.
Note: The Grad PLUS form needed for the 2008 summer semester is available at www.purdue.edu/dfa/all/0708/0708_gradplus.pdf.
- Beginning in June 2008, DFA will certify borrower eligibility with the loan service provider. The loan service provider approves the loan once the borrower has completeed a PLUS Master Promissory Note (MPN) at www.dlenote.ed.gov (if not already on file)
- PLUS Loan funds are normally sent electronically to the Purdue Bursar by the loan service provider. The borrower will be notified by the Bursar’s Office that funds have arrived. Funds are applied first to fees, then to any housing costs (if the Bursar bills for housing). Any remaining PLUS funds are sent to the borrower. Please note that it is important that students keep their address up-to-date via SSINFO and read all email from facontact@purdue.edu.
Repayment Information
Loan repayment is deferred in the Grad PLUS program as long as the student remains enrolled at least half time, but interest accrues. If you would like more information regarding repayment, visit our general student loan counseling page.
Amount Borrowed |
Payment |
$5,000 |
$62 |
$10,000 |
$124 |
$20,000 |
$248 |
$30,000 |
$472 |
Sample Estimated Monthly Repayment Chart: Assumes interest rate of 8.5% and all payments made as scheduled on 10-year repayment term (excludes any borrower benefit savings). Borrowers can estimate monthly payments at www.finaid.org/calculators/loanpayments.phtml.