PLUS Graduate Loans Are Available for Graduate Students

By Peterson's Staff updated on Wednesday, April 09, 2014

Until fairly recently, many students pursuing master's or professional degrees found that the federal loans available to them don't completely cover the high cost of an advanced degree. After seeking available scholarships and grants for graduate school and exhausting existing federal loan resources, graduate students were still faced with tuition that needed to be paid. Many of those students only had one option. They had to look into private graduate school loans to fund the completion of their education. Fortunately, paying for a graduate degree became just a tad bit easier in the middle of 2006.

Graduate loans available; children not required

As of July 1, 2006, grad students no longer had to be the proud parent of an undergrad student to take advantage of a PLUS loan. GradPLUS loans began offering almost identical graduate loans to independent students pursuing their master's or professional degree. That could mean a lot of savings on interest when you compare the fixed-percent rate on the GradPLUS grad-school loan to the potentially higher rates tacked on to private loans.

Filling the gaps with a graduate school loan

Scholarships, grants, and federal Stafford Loans are still the mainstays when funding an advanced degree. The Graduate/Professional PLUS loans are meant to fill any gap in funding when all other forms of financial aid have been exhausted. Given that grad and professional programs are rarely funded 100 percent (and it's even more rare that someone has money in the bank to completely cover the cost of their education), it's a pretty good bet that lots of students take advantage of these graduate school loans.

You still must qualify for this grad school loan

To be considered for a GradPLUS, you must be enrolled at least half-time in an eligible graduate or professional program. It's not an automatic given that you will be issued a loan, however. Borrowers still need to pass muster as far as a decent credit score. Your debt-to-income ratio won't be taken into account, but you'll need to be considered creditworthy before you are considered eligible for these graduate loans.

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