A Direct PLUS Loan for graduate students is a federal student loan that helps cover education costs not met by other financial aid. Unlike undergraduate loans, this loan is taken out by the graduate or professional student themselves. You must be enrolled at least half-time and pass a credit check to qualify.
How Does a Direct PLUS Loan for Graduate Students Work?
This loan is part of the William D. Ford Federal Direct Loan Program. The U.S. Department of Education is your lender, so you borrow directly from the federal government. The funds are sent to your school to pay for tuition, fees, and other education expenses.
You can borrow up to the cost of attendance minus any other financial aid you receive. Your school determines the exact amount you are eligible for each academic year.
Key Features of the Graduate PLUS Loan
- Fixed interest rate: The rate is set each year by Congress and remains the same for the life of the loan.
- Loan fee: A percentage of the loan amount is deducted as a fee, which is set annually.
- No borrowing limit: You can borrow up to your school’s cost of attendance, not a fixed maximum like other federal loans.
- Credit check required: You must not have an adverse credit history.
Eligibility Requirements for Graduate PLUS Loans
To qualify, you must be a U.S. citizen or eligible noncitizen. You must be enrolled at least half-time in a graduate or professional program at a participating school.
You also need to complete the Free Application for Federal Student Aid (FAFSA) each year. Your school will use this to determine your financial need and loan eligibility.
Interest Rates and Fees for 2026-2027
For loans disbursed between July 1, 2026, and June 30, 2027, the interest rate is fixed at 8.50%. The loan fee is 4.20% of the loan amount, which is deducted before funds are sent to your school.
| Loan Type | Interest Rate | Loan Fee |
|---|---|---|
| Graduate PLUS Loan | 8.50% | 4.20% |
How to Apply for a Graduate PLUS Loan
First, complete the FAFSA and receive your financial aid offer. Then, visit the Federal Student Aid website to submit a PLUS Loan application.
You will need your FSA ID and your school’s information. After you apply, the Department of Education will run a credit check. If approved, you will sign a Master Promissory Note (MPN) agreeing to repay the loan.
Repayment Options for Graduate PLUS Loans
Repayment begins after your loan is fully disbursed, but you can request a deferment while you are enrolled at least half-time. You can choose from several repayment plans, including standard, graduated, extended, and income-driven repayment.
Income-driven repayment plans base your monthly payment on your income and family size. After 20 or 25 years of qualifying payments, any remaining balance may be forgiven.
Pros and Cons of Graduate PLUS Loans
Advantages
- Can cover the full cost of attendance, including living expenses.
- Fixed interest rate provides predictable payments.
- Access to income-driven repayment and public service loan forgiveness.
- No prepayment penalty – you can pay off early without extra fees.
Disadvantages
- Higher interest rate compared to other federal loans.
- Loan fee adds to the total cost.
- Requires a credit check – those with adverse credit may need an endorser.
Tips for Managing Your Graduate PLUS Loan
Borrow only what you truly need, not the maximum amount offered. Keep track of your total debt and consider making interest payments while in school to avoid it capitalizing.
Set up auto-pay to get a 0.25% interest rate reduction. Stay in touch with your loan servicer and update your contact information whenever it changes.
Summary
A Direct PLUS Loan for graduate students is a valuable resource to fund your advanced degree. Understand the interest rate, fees, and repayment terms before borrowing. Use it responsibly to invest in your future without taking on more debt than necessary.
Frequently Asked Questions
What is a Direct PLUS Loan for graduate students?
A Direct PLUS Loan is a federal loan that graduate or professional students can use to pay for education expenses not covered by other financial aid.
How do I apply for a graduate PLUS loan?
You apply online at the Federal Student Aid website using your FSA ID after completing the FAFSA.
What credit score is needed for a graduate PLUS loan?
There is no minimum credit score, but you must not have an adverse credit history, such as bankruptcy or foreclosure in the past five years.
Can I get a graduate PLUS loan with bad credit?
If you have an adverse credit history, you may still qualify by getting an endorser who passes the credit check or by appealing the decision.
When do I have to start repaying a graduate PLUS loan?
Repayment starts within 60 days after the loan is fully disbursed, but you can request a deferment while you are enrolled at least half-time.
