The Federal Direct PLUS Loan
The Federal Direct PLUS Loan is a credit-based educational loan available to graduate students and parents of dependent undergraduate students.
A Federal (Parent) PLUS is a loan in the parent's name for a dependent student enrolled at least half time in a degree seeking program. It is a non-need based loan with the benefit of having a fixed interest rate. PLUS loans are available regardless of income or assets, and no collateral is required. While the parent borrower does not have to prove financial need, a credit check is required.
A Federal Graduate PLUS is a loan in a graduate or professional student's name enrolled at least half time in a degree seeking program. The Graduate PLUS loan carries the same terms and conditions as the Parent PLUS loan. The borrower should use the loan funds available to them through the Subsidized and Unsubsidized Stafford loan program before applying for a Graduate PLUS loan. A credit check is required.
Both PLUS loans carry these features:
- Interest rate is fixed at 6.41% for any loan taken out on or after July 1, 2013 and begins to accrue on the date of disbursement.
- Loan Limits - Borrowers are required to complete the Free Application for Federal Student Aid (FAFSA) and may borrow up to the Cost of Attendance.
- Loan Fees - The PLUS loan has a 4.204% origination fee.
- Grace Period - A 6-month grace period after the student leaves school is available upon request.
- Repayment begins sixty days after the final loan disbursement. Graduate students will automatically be granted an in-school deferment as long as they are enrolled at least half-time. An in-school deferment is also available to parents upon request.