Direct Graduate PLUS Loans: Everything You Need to Know

For graduate students looking to fund their education, Direct Graduate PLUS Loans can be a helpful option. These loans are offered by the U.S. Department of Education and are designed to cover any remaining costs after other forms of financial aid have been exhausted. Here’s everything you need to know about Direct Graduate PLUS Loans.

What is a Direct Graduate PLUS Loan?

A Direct Graduate PLUS Loan is a federal student loan that graduate or professional students can use to help pay for their education. These loans have a fixed interest rate and are available to students who have already used up their annual loan limits on other federal student loans, such as Direct Subsidized and Unsubsidized Loans.

How do Direct Graduate PLUS Loans differ from other federal student loans?

One of the biggest differences between Direct Graduate PLUS Loans and other federal student loans is that there is no limit to how much you can borrow with a Direct Graduate PLUS Loan. This can be helpful for graduate students who have higher educational costs and need additional funding beyond what is available through other federal student loans.

Another key difference is that Direct Graduate PLUS Loans require a credit check. This means that you must meet certain credit requirements to be eligible for a Direct Graduate PLUS Loan. However, the credit requirements are not as strict as those for private student loans, making Direct Graduate PLUS Loans more accessible to a wider range of students.

How to apply for a Direct Graduate PLUS Loan

To apply for a Direct Graduate PLUS Loan, you must first complete the Free Application for Federal Student Aid (FAFSA). Once you have completed the FAFSA, you can apply for a Direct Graduate PLUS Loan through the U.S. Department of Education’s website. You will need to provide information about your school, your enrollment status, and your financial information in order to apply for a Direct Graduate PLUS Loan.

Interest rates and fees

Direct Graduate PLUS Loans have a fixed interest rate, which is set by the U.S. Department of Education each year. The interest rate for Direct Graduate PLUS Loans is currently 6.28% for the 2021-2022 academic year. In addition to the interest rate, there is also a loan fee that is deducted from the loan amount before it is disbursed to you. The loan fee is currently 4.228% for Direct Graduate PLUS Loans.

Repayment options for Direct Graduate PLUS Loans

Direct Graduate PLUS Loans offer several repayment options to help you manage your loan payments after you graduate. One option is the standard repayment plan, which allows you to make fixed monthly payments over a 10-year period. Another option is the graduated repayment plan, which starts with lower monthly payments that increase over time.

If you are having trouble making your loan payments, you may be eligible for an income-driven repayment plan. With an income-driven repayment plan, your monthly payments are based on your income and family size, making it easier to manage your loan payments. There is also the option to consolidate your Direct Graduate PLUS Loans into a Direct Consolidation Loan, which can help simplify your repayment process.

Loan forgiveness and cancellation options

There are also options for loan forgiveness and cancellation for Direct Graduate PLUS Loans. For example, if you work in a public service job, you may be eligible for Public Service Loan Forgiveness (PSLF) after making 120 qualifying payments. There are also other forgiveness options available, depending on your career field and circumstances.

Conclusion

Direct Graduate PLUS Loans can be a valuable tool for graduate students looking to fund their education. With their flexible borrowing limits, fixed interest rates, and various repayment options, Direct Graduate PLUS Loans provide a reliable way to finance your graduate or professional degree. If you are considering taking out a Direct Graduate PLUS Loan, be sure to carefully review the terms and conditions and explore all of your options for financial aid.

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