Graduate PLUS loans: What are they and how to apply

Explore which loan is right for you

The Graduate PLUS Loan is a student loan issued by the U.S. Department of Education. It’s designed to help graduate and professional students finance their education. This guide will walk you through whether you qualify for a Graduate PLUS Loan and, if you do, how to get one.

Understanding federal PLUS Loans for graduate students

So, what are Graduate PLUS Loans? Simply put, they’re federal student loans available to students attending graduate school and professional school and are part of the federal direct PLUS Loan program.

The federal direct unsubsidized loan limit is $20,500 per year, so if you’ve reached that limit and still need funds to cover the cost of grad school, the Graduate PLUS Loan may be a good option for you. Private student loans, offered by banks, could be another option worth considering, especially if you have good credit.

Grad PLUS Loans come with a fixed interest rate and flexible loan limits. For loans first disbursed on or after July 1, 2023, and before July 1, 2024, the Grad PLUS loan interest rate is 8.05%.^{footnote 1}

The Department of Education also charges an origination fee of 4.228% for loans disbursed on or after October 1, 2020.^{footnote 2} It’s deducted from the total loan amount before the money is sent to the school.

Differences between a Grad PLUS loan and other federal student loans

There are several differences you should know about:

• A Grad PLUS Loan is credit-based. If your credit isn’t strong, you will need an endorser to cosign it.
• Unlike other federal direct student loans, there’s no borrowing limit—it’s up to your grad school’s cost of attendance.
• The interest rate for a Grad PLUS Loan is higher than for a direct unsubsidized loan.

Note: You should always use federal direct loans first, and use Grad PLUS Loans (or a private loan) to make up the difference needed.

Requirements for Graduate PLUS Loans

If this sounds like a good fit to help finance your future, your next question may be “am I eligible for a Graduate PLUS Loan?”

You must meet the following requirements:

• You’re a graduate or professional student enrolled at least part-time at an eligible school in a program leading to a graduate or professional degree or certificate.
• You don’t have an “adverse credit history.” This means you have no student loan defaults, no long-term delinquencies, and no bankruptcies on your credit report.
  • If you do have a challenging credit history, consider applying with an endorser—but remember, the endorser is legally responsible for repaying your loan if you’re not able to do it.^{footnote 3}

You meet the general eligibility requirements for federal student aid, including being a U.S. citizen or eligible non-citizen, having a Social Security number, and making satisfactory academic progress.

How to apply for a Grad PLUS Loan

Once you determine that you meet these criteria, it’s time to complete the Free Application for Federal Student Aid (FAFSA^®). Submitting the FAFSA^® isn’t just for high school seniors and undergraduates—grad students should file it, too, in order to qualify for various forms of aid, including scholarships and grants, work-study, and federal student loans.

Once you’ve filed the FAFSA^®, you can start a Grad PLUS Loan application. It takes about 20 minutes, and you’ll need to provide your verified FSA ID (which is a username and password created to file the FAFSA^®), your school name, your permanent mailing address, your U.S. address (if your permanent address is outside of the U.S.), your telephone number and email address, and if applicable, your employer's information.

If you’re eligible for a Grad PLUS Loan, you’ll need to agree to its terms by signing a Master Promissory Note. You may also need to complete entrance counseling.

What does a Graduate PLUS Loan cover?

The Graduate PLUS Loan can cover the full cost of attendance for your graduate program, with the exception of other financial aid received. There is no aggregate loan limit.

The cost of attendance includes:

• Tuition and fees
• Room and board
• Books and supplies
• Technology and equipment
• Transportation
• Miscellaneous and personal expenses

Key benefits of the Grad PLUS Loan

There are benefits to a Graduate PLUS Loan, similar to benefits offered for other federal student loans.

• Grad PLUS loans come with a fixed interest rate that won’t go up (or down) during the life of your loan.
• Loan payments can be postponed while you’re in school, as long as you’re enrolled at least part-time at an accredited program, and for an additional six months after you’ve left school or dropped below part-time status.
• There are multiple repayment plans available, including income-driven repayment plans, and the interest you pay on your loan can be tax deductible.

Alternative options to pay for your graduate degree

After you’ve maximized money you don’t have to pay back and explored direct federal student loans, you may still need additional funds.

That’s when you should consider a Graduate PLUS Loan. Another option may be a private student loan. Both are credit based, but most private student loans don’t have an origination fee. Interest rates could be competitive and there may also be expanded repayment terms.

Whatever methods you choose to finance your graduate degree, you can rest assured you’re making a commitment and investment in your future.