The Federal Direct Grad PLUS Loan is offered to eligible borrower to bridge a gap between the financial aid awarded and the cost of attendance reflecting on the student award notice. A student must apply each year as a new credit check must be performed. If a student has an adverse credit history, he/she may still apply for the Grad PLUS Loan by obtaining an endorser who does not have an adverse credit history.
The Grad PLUS Loan Master Promissory Note (MPN) is good for 10 years provided an endorser is not needed. If the Grad PLUS Loan was approved with an endorser, the student will be required to complete a new MPN each time they apply. The interest rate is fixed at 7.9%. The U.S. Department charges a loan origination fee of 4% that is deducted from each disbursement. Questions concerning credit worthiness and/or credit decisions can be directed to the Federal Servicer Applicant Service at 1-800-577-7394.
Please remind your student about the importance of responsible borrowing. Why? Every dollar not borrowed is one that will never be repaid – with interest.