Direct Graduate PLUS Loan

If you need to borrow funds beyond the federal direct subsidized and unsubsidized loan limits, you may be able to participate in the new William D. Ford Federal Direct Graduate PLUS Loan. The Graduate PLUS Loan will have a fixed 7.9 percent interest rate, a 4.0 percent origination fee deducted at disbursement, and all other federal direct loan criteria. A 1.5 percent rebate is refunded to the student borrower who makes the first 12 monthly payments on time that reduces the origination fee to 2.5 percent. No annual or aggregate borrowing limits are imposed, other than cost of attendance less other financial aid received.

While credit checks are required to be eligible, credit criteria are less restrictive than those for most private student loans. If you do not meet the credit requirements, you may still qualify for the loan if you have someone who does meet the credit requirements endorse the loan. An endorser, unlike a co-signer, is not liable for your Graduate PLUS loan debt if you become permanently disabled or die.

Use the Graduate PLUS Loan vs. private loan comparison chart to compare the interest rate, credit check requirements, terms, and repayment criteria
when choosing between the Graduate PLUS Loan and a private educational loan you may be considering. Private educational loans from commercial lenders are too numerous to catalog here, so the chart uses typical rates, terms, and conditions of private lenders. Also, you will also find useful information in the "Questions and Answers About Direct PLUS Loans for Graduate and Professional Students" flyer from the U.S. Department of Education.

To apply, complete the Free Application for Federal Student Aid (FAFSA). You must first be offered subsidized and/or unsubsidized direct loans. You must accept, reduce, or decline these loans prior to requesting the Direct Graduate PLUS Loan. Then, to have the loan amount you need certified, send an e-mail from your University-assigned e-mail account to helpingu@umn.edu. Use the subject "Graduate PLUS Loan request." In the message section, give your name, student ID number, and indicate the Graduate PLUS Loan amount you would like to borrow. Or you may apply by completing the Student Loan Supplement 2007-2008. Complete, print, sign, date, and send the form to the address given at the top or FAX it to 612-625-3002.

Before the loan can be disbursed, you must complete a separate master promissory note (MPN). Read carefully all of the terms and conditions of the Graduate PLUS Loan explained in the MPN. By signing the MPN, you promise to repay the loan. You can sign the required MPN electronically with your U. S. Department of Education-issued PIN. If you don't already have their PIN, you can request one on the official PIN site.

The Graduate PLUS MPN can be used for one or more loans in one or more academic years. This means that, in most cases, you may receive additional Direct PLUS loans for up to 10 years without completing a new PLUS MPN.