Federal PLUS Loan for Graduate & Professional Students

Beginning on July 1st, 2006 graduate and professional student may borrow under the Federal PLUS loan program. Lewis & Clark graduate and law students may choose either a Grad PLUS or private loan to cover educational costs after they have exhausted their Federal Stafford Loan eligibility.

When considering which loan to apply for there are a few important facts to keep in mind:

• Most private loans come with a variable interest rate and no fees. The Grad PLUS Loan, on the other hand, offers a fixed 8.5% interest rate for the life of the loan, but charges a small fee.
• Income and credit score do not affect a student's ability to obtain a Grad PLUS Loan, whereas credit criteria are usually more stringent on private loans.
• The Grad PLUS Loan may not offer an automatic grace period, while private loans usually do.
• The Grad PLUS Loan is permitted in Federal Consolidation Loans and private loans are not.

How to Apply

Please review our Guide to Choosing a Lender and apply online, directly with your lender.

If you have not already done so, you will need to file a Free Application for Federal Student Aid (FAFSA) before we will certify your Federal Grad PLUS Loan application. You may do so online at www.fafsa.ed.gov.

Fees and Disbursement

The Federal Graduate PLUS loan is subject to a 3% origination fee and a 1% default fee. The 1% default fee may or may not be covered, depending on your lender selection. Since these fees are deducted before the lender disburses the loan proceeds, the amount the lender sends will be 3-4% less than the actual loan.

The loan amount will be evenly divided over your academic year. Disbursements will be made at the beginning of each semester. All proceeds are forwarded to Lewis & Clark College. We will notify you when PLUS funds have been received. Any excess funds will be released to you via a refund check through the Cashier & Credit Office (loan funds must first clear the student account with the college for that semester).

Deferment of Payment and Forbearance

Payment of a Federal Graduate PLUS Loan may be deferred if the borrower is enrolled in school on at least a half-time basis or is engaged in a graduate fellowship. Some lenders provide automatic deferment for Federal Graduate PLUS Loan borrowers, others require borrowers to apply for deferment. Payment may also be deferred if the borrower is unemployed or in a situation of demonstrable economic hardship. Contact the lender for additional information on deferments. During a deferment, interest continues to accrue on the loan and may be capitalized (added to the principal of the loan).

In situations not covered by deferment, a borrower may ask for a forbearance. By granting forbearance, a lender permits a temporary cessation of payments, allows an extension of time for making payments, or temporarily accepts smaller payments than were previously scheduled. The lender may grant forbearance to a borrower only if the lender reasonably believes, and documents in the borrower's file, that the borrower intends to repay the loan, but due to poor health or other acceptable reasons, is currently unable to make payments.

Interest and Repayment

As of July 1, 2006, the Federal Graduate PLUS Loan interest rate is fixed at 8.5%.

Graduate PLUS Loan borrowers enter repayment at the time the loan is fully disbursed, unless the lender offers automatic in-school deferment. The lender must notify the borrower of the terms and conditions for repayment of the loan before repayment is scheduled to begin. The minimum monthly payment is $50.00. A borrower is allowed at least 5 years (unless the minimum required payment will retire the debt in less time), and no more than 10 years, to repay a Grad PLUS loan. A borrower may prepay his or her loan in full or in part at any time, without penalty and without liability for unearned interest.

Alternative repayment schedules and deferment or forbearance options are available on all federal student loans, including the Grad PLUS Loan. Extended repayment plans (up to 25 years) are available for borrowers with FFELP debt exceeding $30,000. Contact your lender for more information.

The following table is based on a standard 10 year repayment plan. Use this table to estimate the monthly payment amount for your Federal Grad PLUS Loan(s).

Financial Planning Tools

Students considering a Federal Graduate PLUS Loan may benefit from the following financial planning tools designed to assist with student loan debt management.

Edwise Financial Planning Guide

Mapping Your Future Financial Fitness Tools