What a Grad PLUS Loan Is
A Grad PLUS loan is a federal Direct PLUS loan made to a graduate or professional student. The borrower is the student, not a parent. The loan is offered by the U.S. Department of Education and is part of the federal student aid system, alongside Direct Unsubsidized Loans and other aid such as grants, scholarships, and work-study. You can review the official program description on StudentAid.gov.
Grad PLUS loans exist to fill the gap after other aid. A school first determines your cost of attendance, then subtracts other financial aid you receive. The remaining amount is the maximum you can borrow through Grad PLUS, subject to eligibility and credit approval. Because Grad PLUS is a federal loan, it comes with federal repayment plans, deferment and forbearance options, and forgiveness programs that may apply to qualifying borrowers. It is not a private loan, and it is not automatically better or worse than other federal loans; the right choice depends on your program, budget, and long-term plans.
Eligibility Requirements for Grad PLUS Loans
To receive a Grad PLUS loan, you generally must be enrolled at least half-time in a graduate or professional program at a school that participates in the federal Direct Loan program. You must meet citizenship or eligible noncitizen requirements, maintain satisfactory academic progress, and have no unresolved default on a federal student loan or other federal aid issue. The school must also certify your eligibility and loan amount.
The credit check is a key difference. Grad PLUS loans require a credit check, but the standard is limited: the Department of Education reviews for an adverse credit history, not a minimum credit score. If you have adverse credit, you may still qualify by obtaining an endorser who does not have adverse credit or by documenting extenuating circumstances. The rules and definitions are explained by the U.S. Department of Education. A cosigner is not used in the same way as private loans; for Grad PLUS, an endorser may be required. Always confirm current requirements with your school's financial aid office.
How Much You Can Borrow and What It Costs
Grad PLUS borrowing is capped by the school's cost of attendance. Cost of attendance can include tuition, fees, room and board, books, supplies, transportation, and certain personal expenses. It does not include unlimited living costs or any amount you want. After subtracting grants, scholarships, work-study, and other aid, the remaining need is the maximum Grad PLUS amount. You can choose to borrow less than the maximum.
The loan has two main costs: interest and a loan fee. The interest rate is set by federal law for each award year, and the loan fee is a percentage of the amount borrowed. Both can change for new loans, so check the current figures on StudentAid.gov's interest rates page before you sign a promissory note. Interest generally begins to accrue when the loan is disbursed, and the loan fee is deducted proportionately from each disbursement. That means the amount credited to your school may be less than the amount you agreed to borrow, while you remain responsible for repaying the full principal plus interest. Use the student loan calculator to see how different borrowing amounts affect monthly payments.
Interest, Fees, and the Credit Check
Grad PLUS loans are unsubsidized, which means the government does not pay interest for you. Interest starts building while you are in school, during any grace period after you leave school or drop below half-time enrollment, and during deferment or forbearance periods. If you do not pay that interest, it can be capitalized, or added to your principal balance, which increases the amount you owe over time.
The credit check for Grad PLUS is not a full underwriting review. The Department of Education looks for specific adverse credit events, such as certain delinquencies, defaults, bankruptcies, foreclosures, or wage garnishments. If you are denied, the denial letter explains the reason and your options. An endorser promises to repay the loan if you do not, but an endorser does not receive the same rights as a cosigner on a private loan. You can learn more about federal loan terms from the Federal Student Aid loan overview.
Repayment Plans for Grad PLUS Loans
After you leave school or drop below half-time enrollment, Grad PLUS loans enter a grace period before repayment begins. The exact grace period and repayment start date depend on the loan type and your school's schedule, so confirm details with your loan servicer. If you have multiple federal loans, you may be able to combine them through a Direct Consolidation Loan. Consolidation can simplify payments, but it can also affect forgiveness progress, so review the tradeoffs first. Our guide to student loan consolidation explains the basics.
Grad PLUS loans are eligible for federal income-driven repayment plans. Under an income-driven plan, your monthly payment is based on your income and family size, and any remaining balance may be forgiven after a set number of qualifying payments. The Department of Education provides details on income-driven repayment. If you work for a qualifying public service employer, you may also pursue Public Service Loan Forgiveness. Eligibility rules are specific, so document your employment and payments carefully.
Grad PLUS vs. Other Federal and Private Loans
Grad PLUS loans are often compared with Direct Unsubsidized Loans and private student loans. The table below summarizes general differences, but current rates and terms must be confirmed with official sources.
| Feature | Grad PLUS | Direct Unsubsidized | Private student loan |
|---|---|---|---|
| Borrower | Graduate or professional student | Graduate or professional student | Student, often with cosigner |
| Credit check | Yes, adverse credit history review | No credit check for most federal loans | Yes, full underwriting |
| Borrowing limit | Cost of attendance minus other aid | Annual and aggregate limits apply | Varies by lender and school |
| Repayment plans | Federal plans, including income-driven | Federal plans, including income-driven | Lender-specific |
| Forgiveness | May qualify for federal forgiveness programs | May qualify for federal forgiveness programs | Generally no federal forgiveness |
Direct Unsubsidized Loans often have lower interest rates and fees than Grad PLUS loans, but they have lower borrowing limits. Private loans may offer different terms, but they generally lack federal repayment and forgiveness protections. Compare the total cost, not just the monthly payment. The Federal Student Aid loan overview explains the categories.
Risks, Default, and Alternatives to Borrowing
Grad PLUS loans can be useful, but they are still debt. Because they are unsubsidized, interest can grow during school and deferment. If you borrow up to the full cost of attendance, you may graduate with a payment that is difficult to manage on an entry-level salary. Default can lead to damaged credit, loss of eligibility for future federal aid, and collection actions such as wage garnishment or offset of tax refunds. The default page on StudentAid.gov explains consequences and recovery options.
Before borrowing, consider alternatives: school-based aid, scholarships, assistantships, fellowships, employer tuition benefits, part-time work, and lower-cost housing. If you need less than the maximum, borrow less. If you already have Grad PLUS loans, review repayment options early. The guide to paying off student loans covers strategies such as extra payments and refinancing cautions. Be wary of companies that promise fast forgiveness or charge fees for free federal programs; the FTC has student loan scam guidance. You can also compare parent borrowing through our Parent PLUS loans guide.
Steps to Apply and Manage a Grad PLUS Loan
Applying for a Grad PLUS loan involves several steps. Complete the FAFSA first, because your school uses it to determine eligibility for federal aid. Then review your financial aid offer and decide how much you actually need.
- Complete the federal student aid requirements for the award year.
- Accept or decline the Grad PLUS loan in your school's financial aid portal.
- Complete the Grad PLUS loan application and credit check on StudentAid.gov.
- If denied due to adverse credit, review endorser or extenuating circumstances options.
- Sign the Master Promissory Note and complete entrance counseling if required.
- Track disbursements and confirm the loan fee and interest capitalization rules.
- Choose a repayment plan before the grace period ends and update your contact information.
- Monitor your loan servicer account and apply for forgiveness or income-driven repayment recertification on time.
Keep records of every application, disbursement, and payment. If you are unsure about eligibility or repayment, contact your school's financial aid office or your federal loan servicer. You can also use the deferment vs. forbearance guide to understand temporary payment relief.