Grad PLUS Loan Q&A

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     Grad PLUS Loan Basics                           Grad PLUS Loan Eligibility

     Applying for a Grad PLUS Loan               Grad PLUS Loan Repayment

     Grad PLUS Loan Terms

Grad PLUS Loan Basics

What is a Grad PLUS Loan?
A Grad PLUS loan is an education loan for graduate school sponsored by the federal government. It is available to graduate and professional students.

What Is the Interest Rate on a Grad PLUS Loan?
The interest rate for Grad PLUS loans disbursed after July 1, 2006 will be fixed at 8.5%.


How Much Can I Borrow with a Grad PLUS Loan?
You can borrow up to 100% of the estimated cost of your attendance with federal Grad PLUS loans. The estimated cost of attendance includes tuition, room and board, books, transportation and other expenses, minus any financial aid.

Grad PLUS Loan Eligibility

Am I Eligible for a Grad PLUS Loan?
To be eligible for a Grad PLUS loan you must:

• Be enrolled in a graduate or professional school at least half-time
• Be creditworthy
• Have completed the Free Application for Federal Student Aid (FAFSA)
  .

Applying for a Grad PLUS Loan

How Do I apply for a Grad PLUS Loan?
At Student Lending Works, we have simplified the application process to make getting loans for graduate school as quick and easy as possible. All you need to do is complete our Grad PLUS Loan Online Application. Once you submit your application, we will verify your information and credit history. When your Grad PLUS loan is approved and certified by your school, we will send the funds to your school.


What Is a Master Promissory Note (MPN)?
The Master Promissory Note is your Grad PLUS Loan application and contract. By signing the MPN, you agree to repay the lender the money you borrow. You may be able to use your initial Grad PLUS Loan MPN to obtain Grad PLUS Loans in subsequent academic years. If you attend a school that supports this process, you can take out additional Grad PLUS loans during all the years you attend the school without completing another MPN. You will only need to submit for your request for the new loan amount. However, if you choose a different lender for new Grad PLUS loans, then you must complete a new MPN.

Is There a Credit Check to Get a Grad PLUS Loan?
Yes. In order to obtain a Grad PLUS Loan, you will need to pass a credit evaluation, but there are no income or employment requirements.

When Do I Get the Grad PLUS Loan Money?
Once you apply for your Grad PLUS loan, your school will tell us when the loan should be disbursed. The loan is not disbursed in a lump sum; instead it is divided into equal disbursements throughout the loan period, usually before each quarter or semester. Generally, a disbursement may not be made prior to 30 days before the beginning of the academic term.

Do You Send the Check To Me?
No. The loan money goes directly to your school. The school will apply any funds needed to pay tuition and other school bills. The school will then give any remaining funds to you.

Are There Any Fees for Getting a Grad PLUS Loan?
The federal government charges borrowers a 3% origination fee and a 1% default fee.

What is the difference between FFEL Program and Direct Loan Program?
These are two competing programs doing the same thing: originating education loans (Stafford, PLUS and Consolidation Loans.) Both of the programs have the same basic rules; however, there are a few primary differences:

• The identity of the lender of your loan. The lender in the FFEL Program is a private lender (like Student Lending Works); whereas, the exclusive lender for the Direct Loan Program is the federal government.
• The loan discounts offered. FFEL Program lenders may offer different discounts than the Direct Loan Program.

Note: If your school participates in the Direct Loan Program, you must borrow your loans from this lender. If your school participates in the FFEL Program you may choose any lender to borrow your federal student loans – including any lender that is not listed on your schools “preferred lender list”.

Grad PLUS Loan Repayment

When Do I Have to Start Repaying My Grad PLUS Loan?
Your first Grad PLUS loan payment may be due within 60 days after the loan has been fully disbursed.


How Long Do I have to Repay My Grad PLUS Loan?
The regular repayment term for federal loans is not to exceed 10 years with a $50 minimum payment. If you have at least $30,000 in federal student loans, you may request to have your repayment term extended up to 25 years.

Is There A Penalty For Paying My Grad PLUS Loan Off Early?
No. There are never any fees for paying off a Grad PLUS Loan early.

Is It Possible to Postpone My Grad PLUS Loan Payments?
Yes. As long as you are enrolled at least half-time and are eligible, you may be able to postpone or reduce monthly payments on your Grad PLUS loans with deferment or forbearance benefits.

What is the Difference Between Deferment and Forbearance?

Deferment
A deferment is a way to postpone your loan payments. If you apply for a deferment, your loan principal will be deferred and will not accrue any interest during the deferment period. You must meet specific criteria as set by the federal government to qualify for a deferment. For deferment criteria visit the Federal Student Aid website.

Forbearance
Forbearance is also a way to postpone your loan payments. If you apply for forbearance, only your loan principal will be deferred. The interest on your loans will still accrue during the forbearance period and can be paid monthly or deferred and added to the loan balance when the forbearance period expires. If you do not qualify for a deferment, you may be able to receive forbearance, which has less specific qualifications. For forbearance criteria visit the Federal Student Aid website.

Grad PLUS Loan Terms

Grad PLUS Loan Limits

You can borrow up to 100% of the estimated cost of your attendance with a Grad PLUS loan. The estimated cost of attendance includes tuition, room and board, books, transportation and other expenses, minus any financial aid awarded to you.

Grad PLUS Loan Interest rate

The interest rate for Grad PLUS loans disbursed after July 1, 2006 is fixed at 8.5%

Grad PLUS Loan Fees

The federal government charges borrowers a 1% default fee and a 3% origination fee.

Grad PLUS Loan Repayment

Your first Grad PLUS loan payment is usually due within 60 days after the loan has been fully disbursed. You may be able to postpone or reduce making payments on your Grad PLUS loans with deferment or forbearance benefits. The regular repayment term for federal Grad PLUS loans is not to exceed 10 years. The following repayment options are available:

• Standard repayment: Your monthly payments include both principal and interest and are fixed over the life of the loan (a maximum of 10 years). This plan has the lowest total interest cost to you.

• Graduated Repayment Plan: This repayment option will allow you to have a lower monthly payment for the first few years and then an increased monthly payment thereafter.

In example:

• For the first 2 years your monthly payments will be interest-only.
• For the next 3 years, you will continue to pay the interest and you will also pay off some of the principal.
• For the remaining life of your loan, you will be put on a standard repayment plan.


• Income-Sensitive Repayment: Your monthly payment amount will vary each year (up to 5 years) based upon a percentage of your annual income. You must reapply every year and payments are adjusted annually to reflect changes in your income.

• Extended repayment: If you have high student loan debt, you may qualify to extend your repayment term to 25 years.