What is a Direct PLUS loan?

Answer:

Direct PLUS loans are federal loans that graduate or professional degree students and parents of dependent undergraduate students can use to help pay for education expenses.

Direct PLUS loans have a fixed interest rate and are not subsidized, which means that interest accrues while the student is enrolled in school. You will be charged a fee to process a Direct PLUS Loan, called an origination fee. An origination fee is deducted from the loan disbursement before you or the school receives the funds. 

There are two types of Direct PLUS loans: the Grad PLUS loan and the Parent PLUS loan.

Grad PLUS loans allow graduate and professional students to borrow money to pay for their own education. Graduate students can borrow Grad PLUS loans to cover any costs not already covered by other financial aid or grants, up to the full cost of attendance. 

Parent PLUS loans allow parents of dependent students to borrow money to cover any costs not already covered by the student's financial aid package, up to the full cost of attendance. The program does not set a cumulative limit to how much parents may borrow. Parent PLUS loans are the financial responsibility of the parents, not the student.

Parent PLUS loans have a fixed interest rate and are not subsidized, which means that interest accrues while the student is enrolled in school. You will be charged a fee to process a Direct PLUS Loan, called an origination fee. An origination fee is deducted from the loan disbursement before you or the school receives the funds.

Parent PLUS loans have no “grace period.” A grace period is a time after the student graduates, leaves school, or drops below half-time school enrollment when you don’t have to make payments. Parents must start repaying PLUS loans as soon as you or the school receives the loan funds. However, parents may be able to request to delay making payments while their child is in school or for an additional six months after their child graduates, leaves school, or drops below half-time enrollment. Parents should contact their loan servicer for more information about how to delay making payments. Parents are still responsible for the interest that accrues while the payments are postponed. 

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