Federal Grad PLUS Loans
The Federal Grad PLUS Loan is designed for graduate and professional degree students. Like Federal Stafford Loans, your college or university will participate in either:
- The Federal Family Education Loan Program (FFELP) — where
banks, credit unions and savings banks fund the loans.
- The William D. Ford Federal Direct Loan Program (Direct Loan) — where the U.S. Department of
Education provides the money for the loan through the college or
university.
Loan Facts
A few Federal Grad PLUS Loan facts:
- You must complete the Free Application for Federal Student Aid (FAFSA).*
- You must pass a credit check in order to borrow these funds.You must have applied for the annual maximum Subsidized and Unsubsidized Federal Stafford Loans before applying for a Federal Grad PLUS Loan.
- The interest rate is fixed at 8.50% (FFELP) or 7.90% (Direct Loan).
- The loan limit equals the cost of attendance (COA), minus other financial aid received.
- There is no cumulative lifetime maximum.
- Repayment begins six months after you graduate, leave school or drop to less than half time. If you do not want your loan to be placed into the automatic in-school deferment, please contact Iowa Student Loan to opt out.
- You will be responsible for paying the interest that accrues while the loan is in deferment. You may, however, either pay the interest while the loan is in deferment or add it to the principal amount of the loan.
- There is a 3% origination fee and a 1% guarantee fee associated with this loan. Some guarantors will pay the 1% guarantee fee on your behalf.
- You may qualify for borrower benefits.
*The FAFSA is a free form that may be completed without professional assistance via paper or electronic forms provided by the U.S. Department of Education at www.fafsa.ed.gov.
When you defer interest payments, interest will accrue and will be added to your loan; therefore, deferring payments for an extended period of time may substantially increase your loan balance. You should make payments that at least cover your accrued interest to avoid increases in your loan balance.
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Take advantage of borrower benefits and save money on your Federal PLUS Loan.
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