Funding your Education with Financial Aid: Graduate PLUS Loans
by Brooke Heath
Being accepted into a graduate school or professional school is a great accomplishment! But pursuing higher education also means paying higher tuition costs. Graduate school and professional schools cost a lot more than undergraduate schools. For example, at an unnamed Ivy League school, tuition for undergraduates is $16,832. However, at the same school the tuition more than doubles for graduate programs at $40,592.
Fortunately, the government understands that increasing costs come with increasing your education, and have implemented a loan program specifically for graduate and professional students, the Graduate PLUS Loan.
Graduate PLUS Loans
Before July 1, 2006, PLUS Loans were only available to parents of dependent undergraduate students. Since then, the federal government has made these loans available to graduate and professional students as well. Graduate PLUS Loans are available to students attending graduate school or professional students pursuing advanced studies in law, medicine, education, pharmacology, or dentistry.
Interest Rates
Graduate PLUS Loans are similar to the original parent PLUS Loans in that their interest rates are at 8.5% for FFEL loans and 7.9% for Direct loans. Because of these low rates, Graduate PLUS Loans are a great alternative to high interest loans such as credit card or home equity loans.
Benefits of Graduate PLUS Loans
Graduate PLUS Loans offer the benefits of federal student loans in that they have no prepayment penalties, which allow students to repay their loan as early as they choose. They also offer deferment and forbearance options, which give borrowers the option to temporarily suspend payments due to financial hardships or other adverse situations that may hinder them from making their monthly payments.
Until recently, Graduate PLUS Loans had no automatic in-school deferment, and borrowers needed to file a request to receive one. However, Direct PLUS Loans for graduates now offer an immediate in-school deferment status on their loans.
Also like parent PLUS Loans, Graduate PLUS Loans are not based on need, so any student that needs aid in funding their graduate or professional degree may apply. However, Graduate PLUS Loans are credit-based, so students who have a poor credit history or have yet to establish credit may need to have a cosigner sign on the loan with them. There are also loan fees attached to these loans, which can total 4%.
Loan Limits
Graduate PLUS Loans allow students to borrow up to the total cost of attendance minus any other financial aid that they receive. For example, if the total cost of a graduate student's first year of attendance is $50,000 and he or she receives $5,000 in grants and $10,000 in scholarships, then he or she may borrow up to $35,000, but no more.
How to Apply
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); and be enrolled in an eligible graduate or postdoctoral program. They must also have applied for their annual loan maximum eligibility under the Federal Subsidized and Unsubsidized Stafford Loan Program before applying for a Graduate PLUS Loan. To complete your FAFSA online or for more information on the FAFSA, visit http://www.fafsa.ed.gov/ .
Consolidation = Savings
Another advantage to Graduate PLUS Loans is that they can be consolidated with all of your other federal loans, even the ones from your undergraduate schooling. Consolidating bundles all of your outstanding federal loans into one, easy-to-manage loan. This not only eliminates the hassle of making multiple payments to multiple lenders, but also saves you money! When you consolidate with EdFed, you can save thousands of dollars over the life of you loan!
EdFed: An Industry Leader
As a leader in the consolidation industry, EdFed is dedicated to helping students manage their student loans and reach their educational goals. EdFed offers incredible benefits with our federal student loan consolidation, as well as customer service that is second to none!
More Information
For more information on Graduate PLUS Loans visit:
Article Title : Funding your Education with Financial Aid: Graduate PLUS Loans
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