Frequently Asked Questions
About Graduate/Professional PLUS Loans

What are Graduate PLUS Loans?

• This loan is based not on financial need.  

• You'll need to start repaying your loan with 60 days of your last disbursement.  You’ll have up to 10 years to repay.  You have the option of deferring making any loan payments until after you graduate.  The interest, however will continue to accrue during any deferment. 

Who can get a Graduate PLUS Loan?

• Enrollment - You must be enrolled in an eligible program as a graduate or professional student.

• Minimum Enrollment - You must be enrolled in 5 or more credits per semester (3 credits summer term)  to be eligible for this loan.  

• Ability to borrow includes credit worthiness (credit check) conducted by the lender.

How do I get this loan?

The Graduate PLUS Loan application process:

The loans amounts for which you are eligible are listed on your financial aid award notification.  If you choose to borrow, you must confirm the award amounts you wish to borrow and return one signed copy of the notification to the Office of Student Financial Aid.  If you choose to borrow less than the amount listed, you will need to modify the letter to show the lesser amount you wish to borrow.

• If you have previously completed a Master Promissory Note (MPN) at Washington State University, you are not required to complete a new loan application unless you decide to change your lender.  (The MPN is the legal contract between the borrower and the lender, ensuring that you (the borrower) will repay the loan.)

• If you have not previously completed an MPN at Washington State University, you'll start the loan application process by getting a letter from EdFund, which includes instructions for completing the loan application online at www.edfund.net.  A list of federal loan lenders will be available online as well.

How much can I borrow?

Maximums - You may borrow up to the cost of attendance minus all other financial aid (including other student loans).

NOTE: Your school can refuse to certify your loan application, or can certify a loan for an amount less than you would otherwise be eligible for if the school documents the reason for its action and explains the reason to you in writing. The school's decision is final and cannot be appealed to the U.S. Department of Education.

How will I receive my Graduate PLUS Loan?

The loan funds will be sent to your school. In most cases, your loan will be disbursed electronically.

Your loan money must first be used to pay for your tuition, fees, and room and board. If loan money remains, you'll receive the funds by check or via direct deposit to your checking account (if previously authorized).  (Direct deposit information)

If you withdraw during the first 30 days of classes you may have to repay this loan or a portion of it if  you owe money to the school for a portion of tuition or other fees. 

Can I cancel the loan if I change my mind, even if I've signed the promissory note agreeing to the loan's terms?

Yes. Your school must notify you whenever it credits your account with your Graduate PLUS Loan funds.  You may cancel all or a portion of your loan if you inform your school that you wish to do so within 14 days after the date that your school posts/shows the disbursement as received on your WSU student account.

What's the interest rate charged on these loans?

• The Graduate PLUS interest rate is fixed at 8.5% for the life of the loan. 

• Interest is charged on the loan from the date that the first disbursement is made until the loan is paid in full.  Up to $2,500 of the interest you pay may be tax deductible.  Check with your tax advisor for the details.

Other than interest, is there a charge to get these loans?

You may have to pay an origination fee of up to 3 percent and a federal default fee of up to 1 percent.  Some lenders may offer reduced interest rates and fees, so shop around.  This fee will be deducted proportionately from each loan disbursement.  Because of this deduction, you'll receive slightly less than the amount you're borrowing. 

When do I pay back these loans?

Your loan goes into repay 60 days after the last disbursement.  You may apply for a deferment of payment during periods of enrollment.  However, interest will accumulate during deferment periods.   You can either pay the interest or it will be capitalized.

Your lender will send you information about repayment, and you'll be notified of the date repayment begins. However, you're responsible for beginning repayment on time, even if you don't receive this information. Failing to make payments on your loan can lead to default.

How do I pay back my Graduate PLUS loans?

You'll repay your Graduate PLUS loan to the private lender you borrowed from or to a loan servicer.  The Graduate PLUS program offers four repayment options you may choose from, but the terms differ slightly.  You'll receive more detailed information on your repayment options during entrance and exit counseling sessions.  

• You'll be better off if you borrow conservatively, budget wisely and plan ahead.  Knowing the monthly payments for the amount you borrow is a great start.

                                               Interest rate 8.50% fixed

If you do not choose a repayment plan when you first begin repayment, you will be placed under the Standard Repayment Plan.  You can change plans to suit your financial circumstances but you may change only once a year.  Aspects of these plans will vary by lender because the individual lenders can tailor the plans.  Check with the lender for complete information.

• The Standard Repayment Plan:  
  • You pay a fixed amount each month--at least $50--for up to 10 years, not including deferment and forbearance periods.  
  • The length of your repayment period depends on your loan amount.
• The Extended Repayment Plan:  
  • You repay your loan over a period that is generally 12 to 30 years, depending on the loan amount.  
  • Your monthly payment might be lower than under the Standard Repayment Plan, but you'll repay a higher total amount of interest over the life of the loan because the repayment period is longer.  
  • The minimum monthly payment is $50.
• The Graduated Repayment Plan:  
  • Your payments will be lower at first and then increase, usually every two years.  
  • The length of your repayment period will generally range from 12 to 30 years, depending on your loan amount.  
  • Your monthly payment will never increase to more than 1.5 times what you'd pay under the Standard Repayment Plan.  
  • You'll repay a higher total amount of interest, though, because the repayment period is longer than under the Standard Repayment Plan.
• The Income Contingent Repayment Plan:  
  • Your monthly payment is based your yearly income, family size, interest rate, and loan amounts.  
  • As their income rises or falls, so do the payments.  
  • After 25 years, any remaining balance on the loan will be forgiven, but the borrower will have to pay taxes on the amount forgiven.

• When it comes time to repay your loans, keep in mind that if you fall behind in your payments, your delinquency will be reported to the national credit reporting agencies.  A damaged credit rating will make it hard and more expensive to get a loan later should you want to finance a car, a house or more education.

• If you allow your loan to go into default, your wages may be taken from you, your tax refunds could be seized, you could be charged hefty collection costs and more.

• You can take steps to temporarily postpone or reduce loan payments to avoid delinquency and the consequences of default.  If you're having problems making your payments, ask your lender about a deferment or forbearance, or other options.

(See Sample Repayments for more information on comparing repayment plans.)

Are there any tax incentives available for paying back these loans?

• Yes, there are tax incentives for certain higher education expenses, including a deduction for student loan interest for certain borrowers.  This benefit applies to all loans taken out to pay for postsecondary education costs.  The maximum deduction is $2,500 a year.
• IRS Publication 970, Tax Benefits for Higher Education, explains these credits and other tax benefits.  You can find our more at www.irs.gov  or by calling the IRS at 1-800-829-1040.  TTY callers can call 1-800-829-4059.

Are there any tax credits available for paying back student loans?

Two federal income tax credits-dollar-for-dollar reductions in tax liability-are available for higher education expenses. The Hope tax credit, worth up to $1,500 per student, is available to first- and second-year students enrolled at least half time. The Lifetime Learning tax credit is a tax benefit equal to 20 percent of a family's tuition expenses, up to $5,000, for virtually any postsecondary education and training, including subsequent undergraduate years, graduate and professional schools, and even less than half time study.

For more information on the Hope and Lifetime Learning tax credits, and other tax benefits for postsecondary students, visit

www.ed.gov/offices/OPE/PPI/HOPE/index.html

or see the Internal Revenue Service's (IRS) Publication 970. You can get a copy of Publication 970 Tax Benefits for Higher Education by calling 1-800- TAX-FORM (1-800-829-3676). You can also view or download the publication from the Internet at

www.irs.gov/formspubs/index.html

Interest that you pay on your student loans might be tax deductible.

Is it ever possible to postpone repayment of my loan?

Yes. Under certain conditions, you can receive a deferment or forbearance on your loan. A deferment allows you to temporarily postpone payments on your loan. You will be responsible for the interest on the loan during the deferment. If you don't pay the interest as it accrues, it will be capitalized and increase the amount you will have to pay.

For information on deferments available to borrowers with outstanding loans received prior to that date, FFEL Graduate PLUS borrowers should contact the lenders or agencies holding the loans.

You can't receive a deferment if your Graduate PLUS Loan is in default.

If you are temporarily unable to meet your repayment schedule but are not eligible for a deferment, you might receive forbearance for a limited and specified period. During forbearance, your payments are postponed or reduced. You will be charged interest. If you don't pay the interest as it accrues, it will be capitalized.

For example, you might be granted forbearance if you are

• unable to pay due to poor health or other unforeseen personal problems.
• serving in a medical or dental internship or residency.
• obligated to make payments on certain federal student loans that are equal to or greater than 20 percent of your monthly gross income.

Deferments and forbearances are not automatic. If you have a Direct Graduate PLUS Loan, you must contact your Direct Loan Servicing Center to request either option. If you have a FFEL Graduate PLUS Loan, you must contact the lender or agency that holds your loan. For either program, you might have to provide documentation to support your request. You must continue making scheduled payments until you receive notification that the deferment or forbearance has been granted. Failing to make payments on your loan might have a negative effect on your credit rating.

Can my loan be discharged (canceled)?

Yes, in certain circumstances. A discharge releases you from all obligations to repay the loan. 

Your loan can't be canceled because you didn't complete the program of study at the school (unless you were unable to complete the program because the school closed), didn't like the school or the program of study, or didn't obtain employment after completing the program of study.

Repayment assistance (not a discharge but another way to satisfy your obligation to repay) might be available if you serve in the military. For more information, contact your recruiting officer.

For more information about discharge or repayment assistance, Direct Graduate PLUS Loan borrowers should contact the Direct Loan Servicing Center. FFEL Graduate PLUS Loan borrowers should contact the lenders or agencies that hold their loans.

For more information on Graduate PLUS Loans:

• Federal Loan Lenders for Graduate PLUS Loans

• return to Loan Overview