Federal Grad PLUS Loan

The Federal Grad PLUS Loan allows graduate and professional students to pay for additional educational expenses, not covered by financial aid.

You may borrow up to the full cost of education minus other financial aid received. You are not required to have financial need to apply for the Grad PLUS loan and no collateral is required. However, you must be creditworthy.

Eligibility

When applying for a Federal Grad PLUS Loan you must be the graduate or professional student enrolled in a qualified program. You should have submitted a Free Application for Federal Student Aid (FAFSA) and obtained any Stafford loans for which you qualified. In addition, you must be a U.S. citizen or permanent resident and pass a credit check.

Fees

Many lenders charge origination fees of up to 3.00% of the total loan amount. These fees go to the federal government to help make up the cost of student loan programs. In addition, guarantors may charge a fee of up to 1.00% of the total loan amount as an insurance against student loan default.

AHELA currently offers the following borrower benefits for Arizona graduate students attending an Arizona school:

• 0.50% Interest rate reduction upon entering repayment and continuing as long as the borrower continues to make on-time payments

• 0.50% Interest rate reduction for enrolling in automatic payments through your savings or checking account

Interest Rate

The Federal Grad PLUS loan has a fixed interest rate of 8.5% for all loans first disbursed on or after July 1st, 2006.  AHELA’s interest rate deductions for on-time payments and automatic payments will reduce your interest rate to 7.50%.

Disbursements

Once you have completed your application, your financial aid office will determine your scheduled disbursements for the academic year. AHELA will disburse your check to the school, who will apply the funds to your tuition bill. Any remaining funds will be disbursed to you.

Repayment Terms

Repayment begins within 60 days after the final disbursement of the loan. Because you are the borrower, you're responsible for repaying the loan in full. Grad PLUS loans do not have a grace period, although you may apply for a deferment while you are enrolled in school. During the deferment period you will not be required to make payments, but interest will continue to accrue on your Grad PLUS loan.

Standard Payment Plan - You pay the same amount each month for up to 10 years towards the principal and interest of the loan. The minimum payment amount is at least $50 per month.

Graduated Payment Plan - You begin repaying your loan with a lower payment, then after 2 years, the payment amount increases. The minimum payment amount is at least $50 per month.

Income-Sensitive Payment Plan - You may repay your loan based on your gross monthly income. You must show income documentation annually and additional documentation may be required.

Extended Payment Plan - You may take up to 25 years to repay your loan if you received your first loan after October 7, 1998 and your combined loans total $30,000 or more.