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Federal Direct Graduate PLUS Loan
The Federal Direct Graduate PLUS Loan is a credit-based government-sponsored fixed-interest loan. A Free Application for Federal Student Aid (FAFSA) and a credit check are required to obtain this loan. Graduate students must use their Direct Unsubsidized Loan eligibility prior to applying for a Direct Graduate PLUS Loan.
Recipients of a Federal Direct Loan are required to complete entrance counseling before the funds are disbursed. Students must also complete exit counseling upon dropping below half-time status, taking a leave of absence, withdrawing or graduating.
On August 9, 2013, President Obama signed H.R. 1911, the "Bipartisan Student Loan Certainty Act of 2013," into law. The effective date of the Act is retroactive to July 1, 2013. This law amends section 455(b) of the Higher Education Act of 1965 (the HEA) as it provides new formulas for the determination of interest rates for all Direct Loan types.
Cost of attendance minus other financial aid. The amount borrowed may replace the expected student contribution.
The interest rate for Graduate PLUS loans disbursed on or after July 1, 2013 through June 30, 2014 is fixed at 6.41%, with interest beginning to accrue upon disbursement.
The Federal Direct Graduate PLUS loan has a 4.288 percent origination fee.
The borrower must be a U.S. citizen or eligible non-citizen and have a satisfactory credit rating. He or she must be enrolled at least half-time, not be in default on a prior federal loan, or owe a refund on any federal student aid program.
In a typical academic year, Federal Direct Loans are disbursed in two installments. When the academic period is for one semester or for the summer term, one disbursement is permitted at the beginning of the term. During the regular academic year (fall/spring semesters) funds cannot disburse more than 10 days prior to the first day of class. For the summer term, funds cannot disburse more than five days prior to the first day of class.
Repayment typically begins 60 days after the final disbursement of the loan. Borrowers may request an in-school deferment with the U.S. Department of Education. If the deferment is approved, repayment will begin six months after the borrower completes their program. If the student drops below half-time enrollment or withdraw from the university, the borrower will enter into six-month grace period prior to repayment of their loan.
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