NEW GRAD PLUS Program

Questions and Answers About PLUS Loans for Graduate and Professional Students

ELIGIBILITY

1. What are the eligibility requirements?

You must be enrolled at least half-time in a graduate or professional and must meet all of the other general eligibility requirements for the Federal Student Aid programs. In addition, you must not have an adverse credit history (a credit check will be done).

2. What is considered to be an adverse credit history?

You are considered to have an adverse credit history if you are 90 or more days delinquent on any debt or if, within 5 years of the date of the credit report, you have been the subject of a default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off of a Federal Student Aid debt like a Federal Stafford or Perkins loan.

3. What are my options if I have an adverse credit history?

You may still receive a PLUS Loan if you obtain an endorser who does not have an adverse credit history. An endorser/co-signer is someone who agrees to repay the loan if you do not repay it.

4. Can I borrow a PLUS Loan to pay for courses required for certification or for admission into a graduate or professional program?

No. You must be enrolled in a graduate or professional program.

5. Can I decline a subsidized or unsubsidized Stafford Loans and use only PLUS Loans to pay for my education?

Yes. However, subsidized and unsubsidized Stafford Loans have some advantages over PLUS Loans. Subsidized and unsubsidized Stafford Loans have a lower fixed interest rate (6.8%) than PLUS Loans (8.5% - FFELP or 7.9% - Direct), and no interest is charged on subsidized Stafford Loans while you are in school at least half-time or during grace and deferment periods. Interest is charged on PLUS Loans during all periods. In addition, All Stafford Loans have a 6 month grace period after you leave school during which you are not required to make payments. There is no grace period for PLUS Loans.

Sources include U.S. Department of Education, FinAid.com, and National Council of Higher Education Loan Programs (NCHELP).

July 2006