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New In-School Deferment Status for Graduate Students with Direct PLUS Loans
By Brooke Heath
The Department of Education implemented a new policy last week that will allow graduate and professional students with Direct PLUS Loans to automatically be enrolled with in-school deferment status based on information reported by schools through the Enrollment Reporting Process (formerly known as the SSCR).

Prior to this change, a student who borrowed a Direct Graduate PLUS Loan had to apply separately for an in-school deferment. Otherwise, the student would have to begin to make payments on the loan while he or she was still in school. Implementing the new guideline will allow students to focus on their schooling and save them the time it takes to complete the application and wait for it to be approved.

Through the Enrollment Reporting Process, graduate and professional students who continue to be enrolled in eligible graduate programs at least half-time will be able to take advantage of this new policy. The new in-school deferments on their Direct Graduate PLUS Loans will remain in effect until the students reach their Academic Completion Dates (ACDs) reported by their schools.

Repayment on a Direct Graduate PLUS Loan will begin once a student reaches his or her ACD; the first payment will be due within 45 days of the deferment period's ending. Because there are no grace-period options with Graduate PLUS Loans, the Direct Loan Servicing Center (DLSC) will notify students 60 days before their deferments end.

Prior to July 1, 2006, PLUS Loans were only available to parents of dependent undergraduate students. However, the federal government has since then made these loans available to graduate and professional students. Graduate PLUS Loans are available to students attending graduate school or professional students pursuing advanced studies in law, medicine, education, pharmacology, or dentistry.

In addition to the new policy on Direct Graduate PLUS Loans, Graduate PLUS Loan borrowers can also take advantage of the other benefits of federal student aid, such as deferment, forbearance, and forgiveness options. Deferment and forbearance allow borrowers to temporarily suspend payments due to financial hardships or other adverse situations that hinder them from making monthly payments.

The Graduate PLUS Loan is intended to supplement federal Stafford Loans with the aim of covering a graduate or professional student's full cost of attendance.

In order to be eligible to receive a Graduate PLUS Loan, a borrower must be a U.S. citizen or eligible non-citizen, complete the Free Application for Federal Student Aid (FAFSA), be enrolled in an eligible graduate or postdoctoral program, and be creditworthy.


Article Title : New In-School Deferment Status for Graduate Students with Direct PLUS Loans
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