What Is the Maximum Grad Plus Loan Amount?
Planning graduate school? Learn about federal Grad Plus loans, how much you can borrow, and the steps to apply.
Graduate education often requires significant financial investment. Federal student loans, such as the Grad Plus loan, are designed to support graduate and professional students. This loan helps bridge the gap between other available financial aid and the total cost of attendance.
Understanding Grad Plus Loans
A Grad Plus loan is a federal student loan provided by the U.S. Department of Education for students pursuing a graduate or professional degree. These loans are designed to help cover educational expenses up to a student’s institutionally determined cost of attendance. Unlike some other federal student aid programs, Grad Plus loans are not awarded based on financial need, making them accessible to a broader range of graduate students.
Determining Your Maximum Loan Amount
The maximum amount a student can borrow through a Grad Plus loan is not a fixed figure. It depends on their specific educational expenses and other financial support received. This maximum is determined by subtracting any other financial aid from the school’s total Cost of Attendance (COA). For example, if a school’s COA is $50,000 and a student receives $10,000 in scholarships and other federal loans, the maximum Grad Plus loan eligibility would be $40,000.
The Cost of Attendance is a comprehensive estimate set by each educational institution, representing the total educational expenses for a period of enrollment. It typically includes direct costs such as tuition and fees, along with indirect expenses like room and board, books and supplies, transportation, and personal expenses. Scholarships, grants, fellowships, and other federal student loans, such as Direct Unsubsidized Loans, are considered when calculating Grad Plus loan eligibility. These forms of aid reduce the amount that can be borrowed. There is no aggregate or lifetime maximum limit on Grad Plus loans; the annual borrowing limit is consistently based on the COA minus other financial aid.
Eligibility for a Grad Plus Loan
To qualify for a Grad Plus loan, prospective borrowers must meet several general federal student aid requirements. These include:
Being a U.S. citizen or eligible non-citizen.
Being enrolled at least half-time in an eligible graduate or professional degree program.
Maintaining satisfactory academic progress as defined by their institution.
Not being in default on any other federal student loans or owing an overpayment on federal education grants.
A specific requirement for Grad Plus loans is a credit check conducted by the U.S. Department of Education. This check assesses the applicant’s credit history for the absence of an adverse credit history. An adverse credit history generally includes conditions such as being 90 or more days delinquent on a debt totaling over $2,085, having debts placed in collection or charged off within the last two years totaling over $2,085, or experiencing events like bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or a federal student aid write-off within the preceding five years. If an applicant has an adverse credit history, they may still become eligible by obtaining an endorser who does not have such a history, or by documenting extenuating circumstances. An endorser functions similarly to a co-signer, agreeing to repay the loan if the borrower fails to do so.
Applying for a Grad Plus Loan
The Free Application for Federal Student Aid (FAFSA) must be completed first, as it serves as the foundational application for all federal student aid, including Grad Plus loans. The FAFSA requires personal and financial information, such as tax documents, bank statements, and investment records. For graduate students, the FAFSA typically considers them independent, meaning parental financial information is not required.
After completing the FAFSA, the specific Grad Plus loan application can be accessed, typically through StudentAid.gov. This application requires personal details, school information, and the requested loan amount, and it authorizes the necessary credit check. Following approval of the Grad Plus loan, borrowers are required to complete a Master Promissory Note (MPN), which is a legally binding document agreeing to the loan’s terms and conditions. Additionally, all first-time Grad Plus loan borrowers must complete entrance counseling, an online session designed to help them understand their rights and responsibilities as federal loan recipients.
Once all required documents are submitted and counseling is completed, the student’s school certifies the loan amount based on the determined cost of attendance and other aid. Loan funds are generally disbursed directly to the school to cover tuition, fees, and other institutional charges. Any remaining funds are then released to the student to help cover other educational and living expenses. The credit check outcome is communicated promptly after application submission, and if denied due to adverse credit, the endorser option or an appeal process can be pursued.