What are Federal Direct Plus loans? How are they Helpful to Graduate Students?


Direct PLUS loans are federal loans that can be used to help pay for college costs for graduate or technical degree students and parents of dependent undergraduate students.

Direct PLUS loans have a constant interest rate and are not subsidized, meaning that once the student is enrolled in school, interest accrues. You will be charged a fee for the processing of a Direct PLUS Loan, called an origination fee. Prior to you or the school accessing the money, an origination fee is removed from the loan disbursement.

What are the Types of Direct PLUS Loans in the Masters Program?

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

Loans from Grad PLUS encourage college and technical students to borrow cash to pay for their own education. Graduate students can borrow Grad PLUS loans, up to the full cost of attendance, to cover any expenses not already covered by other financial assistance or grants.

Parent PLUS loans allow parents of dependent students to borrow money up to the full cost of attendance to offset any expenses not currently covered by the student’s financial assistance program. A total limit on how much parents can borrow is not set by the program. Parent PLUS loans are the parents’ financial obligation, not the student’s.

Parent PLUS loans have a fixed rate of interest and are not subsidized, which ensures that once the recipient is enrolled in school, interest accrues. You will be charged a fee for the processing of a Direct PLUS Loan, called an origination fee. Prior to you or the school accessing the money, an origination fee is removed from the loan disbursement.

Parent PLUS loans have no “grace period.” A grace period is a moment where you do not have to make payments until the student graduates, leaves school, or fall below half-time school attendance. Parents must continue to repay PLUS loans as soon as the loan funds are obtained by you or the school. Parents can, however, be able to recommend that payments be postponed when their child is in school or for an extra six months after graduation, leaving school, or falling below half-time attendance. For more information on how to postpone making payments, parents may contact their loan servicer. The interest that accrues when the refunds are delayed is also the responsibility of parents.

Federal Direct Graduate PLUS Loan Eligibility for Masters Program

U.S. nationals and permanent residents have access to the Federal Direct Graduate PLUS Loan (Grad PLUS). It is not based on need, but you do need to file the FAFSA in order to be qualified. In order to be eligible for this loan, you must be enrolled at least half-time in a college degree program and follow basic credit requirements provided by the U.S. Department of Education.

How to Apply for a Graduate PLUS Loan for Graduate Students?

If you have decided that you follow these requirements, it is time to complete the FAFSA. The completion of the FAFSA is not only for high school seniors and undergraduates – but Graduate students can also file it in order to apply for different means of funding, including scholarships and grants, work-study, and federal student loans.

You will launch a Direct PLUS Loan application as a graduate student once you have filed with the FAFSA. You would need to include your checked FSA ID (which is a username and password created to file the FAFSA), your school name, your permanent mailing address, your U.S. address (if your permanent address is outside the U.S.), your telephone number, and email address, and, if necessary, the details of your employers. The typical submission takes about 20 minutes.

You will need to adhere to the terms of the loan by signing a Master Promissory Note if you are qualifying for the loan. You will need to complete entry counseling as well.

How much can you borrow from the Federal Direct PLUS Loan for Masters Program?

PLUS loan borrowing does not have strict caps. The full number of PLUS loans you can take out is the attendance expense of the school without other financial support you get or your child gets. Tuition and fees, room and board, and books and other materials are included in the cost of attendance.

Max out federal subsidized and unsubsidized direct loan borrowing prior to taping PLUS loans; PLUS loans have higher interest rates on student loans.

What is the Interest Rate of a Federal Direct PLUS Loan for Masters Program?

For 2020-21, the rate of interest for federal direct PLUS loans is 5.30 %. There is also a 4.228% origination charge that is deducted from each disbursement of the loan.

What does a Graduate PLUS Loan cover?

With the exception of other financial assistance received, the Graduate PLUS Loan will finance the entire attendance expense of your graduate degree, such as scholarships, fellowships, grants, etc. No gross loan cap exists.

  • The attendance expense includes:
  • Matriculum and tuition
  • Board and room
  • Books and materials
  • Technology and resources
  • Transportation Services
  • Miscellaneous and individual costs


About David

After completing his undergraduate, David wanted to get a Master's degree. Looking at cost of getting a 2 year degree, David decided there should be some financial aid and scholarship available to help out students like him. He has since then been researching on Graduate program scholarships and how to help future students like him secure a financial aid and make the education affordable.

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