Graduate PLUS Loan FAQ
General
- What is a Graduate PLUS Loan?
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A Graduate PLUS loan is a low-interest education loan provided to graduate and professional students through the Federal Family Education Loan Program. This program supplements the federal Stafford loan program and should only be used after your stafford eligibility is exhausted.
- Who pays back the loan?
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The student.
- How does my school get the loan money?
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Graduate PLUS loan funds are sent directly to your school. Your loan money must first be applied to pay for tuition and fees, room and board, and other school charges. If loan money remains, you will receive the funds, unless you authorize the school to hold them in a school account.
- What should I do before I apply?
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Several events must happen before you should apply for a Graduate PLUS loan. You must:
- Complete the Free Application for Federal Student Aid (FAFSA). This is required to be considered for federal and most other types of student aid awarded by state agencies and colleges. If you do not submit a FAFSA, you will NOT be eligible to receive student aid.
- Receive a Student Aid Report (SAR) which tells you what federal funding you can get.
- Review the student aid award letter from your school.
If you are eligible for a federal Stafford loan, but still require more funding, then now is the time to apply. Apply for a Graduate PLUS loan online (recommended) or print the Graduate PLUS loan application (242 KB PDF).
- What is a Graduate PLUS Master Promissory Note (MPN)?
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An MPN is a “promise to pay” document under which you may receive Graduate PLUS loans for either a single or multiple enrollment periods.
You may need to sign the MPN only once, but you must apply for additional Graduate PLUS loan funds each academic year.
Eligibility
- Am I eligible?
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To get a PLUS loan, you must:
- Complete the Free Application for Federal Student Aid (FAFSA)
- Be a U.S. citizen or eligible non-citizen
- Be an independent student
- Be enrolled or accepted for enrollment in a school that participates in the Federal Family Education Loan Program
- Be enrolled or plan to be enrolled at least half-time while working toward a graduate degree or certificate
- Be enrolled in an eligible program of study beyond a bachelor's degree, taking graduate level courses leading to a master's or doctorate degree or professional certification (excluding teacher certification)
- Have no education loans in default or owe education grant refunds
Special eligibility requirements:
- Be creditworthy
- Apply for the maximum annual amount through the federal Stafford Loan Program
- Register with the Selective Service, if you are a male 18-25 years old
- Is there a credit check involved?
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Yes, you will undergo a credit check to verify your credit history. We recommend you apply for the PLUS loan which will also determine if you passed the credit check. If it is determined that you are denied, you may still qualify for a Graduate PLUS loan by securing a creditworthy endorser. Your endorser must complete the Endorser Addendum and return to AES.
Print the following:
- Am I an independent student?
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If you can answer yes to any of the following questions, you are an independent student for the 2008-2009 academic year:
- Were you born before January 1, 1985?
- Are you married as of the day you apply (or separated but not divorced)?
- Will you be enrolled in a master’s or doctorate program (beyond a bachelor’s degree) at the beginning of the 2008-2009 school year?
- Do you have children who receive more than half their support from you?
- Do you have dependents (other than your children or spouse) who live with you and who receive more than half their support from you and will continue to receive more than half their support from you through June 30, 2009?
- Are both your parents deceased?
- Are you or were you a ward or dependent of the court until age 18 years?
- Are you a veteran of the U.S. Armed Forces? (includes students who attended a U.S. service academy and who were released under a condition other than dishonorable)
- Are you currently serving on active duty in the Armed Forces for other than training purposes?
Terms
- What is the interest rate?
- The current fixed rate is 8.5% for loans paid out on/after July 1, 2006.
- The rate is adjusted each July 1st and is based on the 90-day Treasury bill plus a margin determined by your lender.
- Select lenders offer additional rate reductions.
- The rate will never exceed 9.0%.
- How much can I borrow?
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You may borrow up to the full cost of your education less other aid received. You can use the loan funds for all associated costs - including tuition, room and board, books, computer, etc.
- What are the loan fees?
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Loan fees total 4% of the borrowed amount.
- Federal default fee will not exceed 1%
- Federal origination fee: 3%
- Can I consolidate?
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Yes. Graduate PLUS loans in repayment are eligible for loan consolidation.
Advantages & Disadvantages
- Is this the right loan for me?
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A Graduate PLUS loan is the best way for graduate and professional students to pay for costs not covered by their financial aid awards.
- Low, fixed interest rate of 8.5% - get even lower rates with AES benefits
- Borrow the difference between your cost of attendance and financial aid award
- No required payments while you attend school at least half-time
- No income requirements
- Payments on interest can be tax deductible
- No penalties for paying your loan off early
- Flexible repayment options
AES offers two Graduate PLUS loan programs:
- a standard Graduate PLUS loan
- KeystoneBEST for Graduates for those who live or go to school in Pennsylvania
Repayment
- What are my repayment options?
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The standard repayment period is 10 years. Loans become due for repayment 60 days after the school receives the loan funds; however, AES automatically defers payments while you attend school.
We understand that things do not always go as planned, so we offer several repayment plans:
- Level. Pay the same amount each month on the principal and interest throughout repayment.
- Graduated. Pay a smaller amount at the beginning of repayment and increase your payment amount over time.
- Income Sensitive. Base your monthly payment amount on your gross income and student loan debt for a limited period of time.
- What if I pay my loan off early?
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You can pay your loan off early without penalty. This is known as prepayment.
- Why should I work with AES?
- Choose to pay by automatic direct debit and, if eligible, we may reduce your interest rate.
- Manage your loans online any time.
- Get single-point servicing for the life of the loan with AES.
- Get one statement for all AES-serviced loans.
- We help you every step of the way, from choosing a loan to repaying your loan.