PLUS over Other Graduate Loans

Graduate loans in the PLUS category have some distinct advantages over other graduate loans, like Stafford.

PLUS loans were previously available only to parents, because they had a higher ceiling on actual disbursements, and needed greater assurance of recovery. However, recent legislative changes have created some graduate loans in the PLUS category, called Graduate PLUS Loans.

PLUS loans differ from other kinds of federal graduate loans in that they are not need-based, but demand-based. You may actually cover the whole expense of your entire graduate course term with a PLUS loan. Unlike other graduate loans, getting a grad PLUS loan will depend on your credit history.

Private Graduate Loans on Turbo?

Another advantage to PLUS graduate loans is that though they function somewhat like a commercial private loan, you don't need to put up any collateral in terms of property. Simply a clean credit history is good enough. Since these graduate loans are backed and guaranteed by the US government, the interest rate is lower than many other private graduate loans, being fixed at 8.5% per annum.

PLUS Parent Loans and PLUS Graduate Loans

PLUS loans given out to parents have no grace period, and repayment begins from day one. However, graduate loans in the PLUS category are a little lenient in this regard. You are free to defer the initial payment until you have finished the course. The interest will continue to accrue in the meantime, though.

Applying for PLUS Graduate Loans

To apply for graduate loans in the PLUS category, you need to fill out the FAFSA form, which stands for Free Application for Federal Student Aid. You make this application to the US Dept. of Education, but of course submitting the application does not automatically guarantee that you'll receive graduate loans. You application goes through a rigorous government screening process which involves assessment of your past financial deals.