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Federal Direct PLUS Loan for Graduate Students

The Federal Direct PLUS Loan is a federal loan program. A student can borrow up to the school-determined cost of attendance minus other financial aid each year through the PLUS Loan program.

Payments on the principal of the PLUS Loan can be deferred while the student is enrolled at least half time. Unlike the Stafford Loan, the PLUS Loan does not have a grace period after the student stops attending school. It is likely, however, that the student will qualify for a deferment or forbearance to temporarily relieve him of his payment responsibility at that time.

The Direct PLUS Loan has a variable fixed interest rate based on the U.S. 10-Year Treasury Note Index. The current 10-year rate is 2.61%. The Federal PLUS Loan for Graduate Students carries a rate of the 10-year index plus 4.60%. For loans that first disburse from July 1, 2014 through June 30, 2015, the interest rate will be 7.21%.

While rates will vary from year to year, the rate assigned to the loan at the time of disbursement will be the fixed rate on that loan for the life of that loan. The Grad PLUS Loan will never have a rate higher than 10.50%.

The PLUS Loan requires a credit check. A borrower with adverse credit will not be able to receive a PLUS Loan without a credit-worthy endorser. Adverse credit is defined as having one or more of the following:

  • Currently 90 days or more delinquent on repayment of any debt
  • Have had debt discharged in bankruptcy during the past 5 years
  • Evidence of a default, foreclosure, tax lien, repossession, wage garnishment, or write-off of a Title IV (federal student aid) debt during the past 5 years
  • Unpaid collection accounts

4.288% fees will be deducted from the gross amount of the loan borrowed, so borrowers should expect to receive 4.288% less money than they ask to borrow. 

How to apply for a Federal Direct Grad PLUS Loan for 2014-15:

  1. Complete the Federal Direct Grad PLUS Loan Master Promissory Note
    1. Visit
    2. Sign in
    3. Select “Complete Master Promissory Note”
    4. Select “Graduate PLUS” and press “continue”
    5. Enter all requested information
    6. Select “Pennsylvania State University” (there is not a separate option for the Law School) as your school and press continue
    7. Follow on-screen instructions the rest of the way through the e-sign/MPN process
  2. Students new to Penn State should complete and submit the Federal Direct Graduate PLUS Loan Request Form (available upon request). Continuing Penn State students should complete the PLUS Request Form on e-Lion.

Both the MPN and the Loan Request Form must be completed in order for your Grad PLUS Loan to be processed.