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Grad PLUS Loan

Eligibility

Grad PLUS is available to graduate students who

  • are enrolled at least half time in a degree-granting program
  • file the Free Application for Federal Student Aid (FAFSA)
  • pass a credit check

How to apply

Grad PLUS application is a two step process.
If you don't complete both steps the loan will not be processed. These steps can be completed in either order.

  1. If Grad Plus is part of your financial aid package, you need to accept the loan in Stuinfo/eFinaid. To initiate a Grad Plus that is not in your package, complete an MSU Grad PLUS Loan Application Form (LAF). Each Grad Plus Loan must be accepted separately. If you need to complete a LAF, use the form below and fax or mail it to the address on the form.
  2. Complete a GradPLUS Direct Loan Master Promissory Note (MPN).
    The MPN will be valid for 10 years provided a Plus loan is disbursed within 12 months of the MPN signing. If your former Grad Plus was approved with an endorser (co-signer), you will need to complete a new MPN.

Loan limits

  • The loan limit for each year is the annual cost of education (the "budget") minus other financial assistance. If your requested amount is too high, it will be reduced to fit within the budget.
  • The Office of Financial Aid (OFA) must determine your Stafford Student Loan eligibility before you may borrow under the Grad PLUS program. This means that many in-state graduate students, or students with graduate assistantships, will have their costs covered fully with Stafford Loan and may not need to use the Grad PLUS.

Interest rate

  • Under Direct Loans, the interest rate is 7.9%. Under the Federal Family Education Loan Program (FFELP) the maximum interest rate was 8.5%.
  • As with Unsubsidized Stafford Loans and private loans, interest begins to accumulate at the time the first disbursement is made. You may choose to pay the interest while in school in order to avoid "paying interest on interest" (capitalizing interest).

Loan fees

  • The Federal Direct PLUS Loan Program requires a 3% origination fee and a 1% default fee. There's an up-front rebate of 1.5%, so the net disbursement is 97.5% of the gross loan amount. The borrower must make the first 12 payments on time to keep the rebate.

What occurs during Grad PLUS processing?

  1. After MSU confirms your eligibility for a Grad PLUS, we transmit the application to the PLUS loan servicer. For each new year this process usually begins in May.
  2. The servicer performs a credit check.
  3. The servicer notifies you about acceptance or rejection of the loan.
  4. If the loan is approved, funds are sent directly to MSU and applied against your bill.

How is Grad PLUS repaid?

  • You will receive an automatic deferment while you are enrolled at least half-time. Since Grad PLUS is not a subsidized loan, interest will accrue during this time. Repayment begins immediately upon your graduation, or if you drop below half-time enrollment. Grad PLUS disbursed on or after July 1, 2008 has a 6-month grace period. In case of hardship, you may request forbearance for up to 42 months.
  • More about repayment…
 

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