Grad Plus Loans

Discuss various money matters here. Loans (federal and private), scholarships, lottery winnings, or other school finance related information and queries.
DanInALionsDen
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Grad Plus Loans

Postby DanInALionsDen » Wed Feb 10, 2010 6:23 pm

How in depth is the credit check for getting Grad Plus loans? I just received an admissions packet from GW which states that so long as you have no late payments on your credit report in the 90 days prior to applying, you should be fine. Is it really that easy? I'm asking in general; the information just so happened to come from a GW admissions packet.

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swc65
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Re: Grad Plus Loans

Postby swc65 » Wed Feb 10, 2010 6:26 pm

I have heard they are very lenient. As long as you are not in default on any education debt, have above a 600, and havent had anything bad in last six months you should be fine.

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scribelaw
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Re: Grad Plus Loans

Postby scribelaw » Wed Feb 10, 2010 6:28 pm

Grad Plus loans cap out at $10,000, right? So you get $20,500 in Stafford, $10,000 in Grad Plus and anything above that comes from a private lender -- is that correct?

shuchong
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Re: Grad Plus Loans

Postby shuchong » Wed Feb 10, 2010 6:36 pm

scribelaw wrote:Grad Plus loans cap out at $10,000, right? So you get $20,500 in Stafford, $10,000 in Grad Plus and anything above that comes from a private lender -- is that correct?


I'm pretty sure that's incorrect. Check out http://studentaid.ed.gov/students/attachments/funding/PlusLoansQA.pdf.
#10 on their FAQ: "How much can I borrow in Direct PLUS Loans?"

"A: There are no set annual or aggregate limits. You may borrow up to your full cost of attendance, minus any other financial aid you receive (including Direct Subsidized Loans, Direct Unsubsidized Loans, scholarships, and certain fellowships)."

So you may only be able to take $10,000 in Grad Plus loans, but that would be because your total cost of attendance for the year is $30,500.

DanInALionsDen
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Re: Grad Plus Loans

Postby DanInALionsDen » Wed Feb 10, 2010 6:49 pm

swc65 wrote:I have heard they are very lenient. As long as you are not in default on any education debt, have above a 600, and havent had anything bad in last six months you should be fine.


I've actually read that they don't check your FICO score. So maybe they're even more lenient than this.

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SamSeaborn2016
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Re: Grad Plus Loans

Postby SamSeaborn2016 » Wed Feb 10, 2010 6:59 pm

http://studentaid.ed.gov/students/attachments/funding/PlusLoansQA.pdf

The above document has all the info but the part regarding adverse credit history I've quoted below:

"You are considered to have an adverse credit history if you are 90 or more
days delinquent on any debt or if, within 5 years of the date of the credit
report, you have been the subject of a default determination, bankruptcy
discharge, foreclosure, repossession, tax lien, wage garnishment, or writeoff
of a Federal Student Aid debt (for example, a Direct Loan or Federal
Stafford Loan)."

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swc65
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Re: Grad Plus Loans

Postby swc65 » Thu Feb 11, 2010 11:45 am

DanInALionsDen wrote:
swc65 wrote:I have heard they are very lenient. As long as you are not in default on any education debt, have above a 600, and havent had anything bad in last six months you should be fine.


I've actually read that they don't check your FICO score. So maybe they're even more lenient than this.



I just thought 600 was the lowest score :)

Torvon
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Re: Grad Plus Loans

Postby Torvon » Wed Feb 17, 2010 1:33 am

shuchong wrote:
scribelaw wrote:Grad Plus loans cap out at $10,000, right? So you get $20,500 in Stafford, $10,000 in Grad Plus and anything above that comes from a private lender -- is that correct?


I'm pretty sure that's incorrect. Check out http://studentaid.ed.gov/students/attachments/funding/PlusLoansQA.pdf.
#10 on their FAQ: "How much can I borrow in Direct PLUS Loans?"

"A: There are no set annual or aggregate limits. You may borrow up to your full cost of attendance, minus any other financial aid you receive (including Direct Subsidized Loans, Direct Unsubsidized Loans, scholarships, and certain fellowships)."

So you may only be able to take $10,000 in Grad Plus loans, but that would be because your total cost of attendance for the year is $30,500.


So is the total amount you can borrow based on the schools standard cost of attendance or the individual students cost of attendance? For example, I'm married and so I will need to pay for the health insurance for not only myself but my wife as well, does that increase the amount I can loan through Grad PLUS or no?

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vanwinkle
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Re: Grad Plus Loans

Postby vanwinkle » Wed Feb 17, 2010 1:36 am

Torvon wrote:So is the total amount you can borrow based on the schools standard cost of attendance or the individual students cost of attendance? For example, I'm married and so I will need to pay for the health insurance for not only myself but my wife as well, does that increase the amount I can loan through Grad PLUS or no?

It's based on the school's calculation of cost of attendance, but you can get them to alter this figure if you have special needs. The flexibility of your total COL amount will vary depending on the helpfulness/policies of the financial aid department at your school and whether your unique circumstances warrant special consideration.

I would imagine that many schools would grant an increase to cover the costs of health insurance for both you and your spouse. You'd have to talk to them and ask though.

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radical4peace
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Re: Grad Plus Loans

Postby radical4peace » Wed Feb 17, 2010 1:43 am

1) GradPLUS loan check is not at all strict -- nothing too bad and you should be ok
2) You can borrow GradPLUS up to the total cost of attendance. Stafford loans are capped but GradPLUS is not. Total cost of attendance includes health insurance, rent, food, etc. Many schools also allow married students/students with children to petition for more aid if their cost of living is higher than average, but this can be a pain.
Bottom line -- DO NOT borrow from private lenders. Completely unnecessary.

UGA2010
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Re: Grad Plus Loans

Postby UGA2010 » Mon Mar 15, 2010 2:42 pm

Ok, so I'm confused about GradPLUS loans... I went on the website and was checking it out, clicked on the apply now button, clicked on Georgia, but only certain schools were listed, leaving out Georgia State, UGA, and others. Does this mean people attending those schools next year can't get GradPLUS loans? Why is that and where else could I look for loan information?

Anonymous Loser
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Re: Grad Plus Loans

Postby Anonymous Loser » Mon Mar 15, 2010 3:43 pm

UGA2010 wrote:Ok, so I'm confused about GradPLUS loans... I went on the website and was checking it out, clicked on the apply now button, clicked on Georgia, but only certain schools were listed, leaving out Georgia State, UGA, and others. Does this mean people attending those schools next year can't get GradPLUS loans? Why is that and where else could I look for loan information?


What website?

UGA2010
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Re: Grad Plus Loans

Postby UGA2010 » Mon Mar 15, 2010 6:24 pm

Anonymous Loser wrote:
UGA2010 wrote:Ok, so I'm confused about GradPLUS loans... I went on the website and was checking it out, clicked on the apply now button, clicked on Georgia, but only certain schools were listed, leaving out Georgia State, UGA, and others. Does this mean people attending those schools next year can't get GradPLUS loans? Why is that and where else could I look for loan information?


What website?



Sorry, I should have been more specific. I was looking at the Sallie Mae ones, since they have the lower interest rate. Now I understand different institutions have Graduate PLUS loans as well. Here is the Sallie Mae site though

--LinkRemoved--

lawduder
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Re: Grad Plus Loans

Postby lawduder » Mon Mar 15, 2010 6:38 pm

UGA2010 wrote:
Anonymous Loser wrote:
UGA2010 wrote:Ok, so I'm confused about GradPLUS loans... I went on the website and was checking it out, clicked on the apply now button, clicked on Georgia, but only certain schools were listed, leaving out Georgia State, UGA, and others. Does this mean people attending those schools next year can't get GradPLUS loans? Why is that and where else could I look for loan information?


What website?



Sorry, I should have been more specific. I was looking at the Sallie Mae ones, since they have the lower interest rate. Now I understand different institutions have Graduate PLUS loans as well. Here is the Sallie Mae site though

--LinkRemoved--

ouch Sallie Mae GradPLUS is 8.5%, when I recieved my financial aid information from Emory it lists GradPLUS as 7.9%

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vanwinkle
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Re: Grad Plus Loans

Postby vanwinkle » Mon Mar 15, 2010 6:44 pm

GradPlus loan rates are fixed. 8.5% is the standard interest rate for third-party lending, and 7.9% is the standard interest rate for direct lending (where a university directly lends you the money instead of sending you to a third-party). I wish more universities did direct lending because the difference in interest rate could save a person thousands over the lifetime of their loans.

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lateforthesky16
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Re: Grad Plus Loans

Postby lateforthesky16 » Mon Mar 15, 2010 6:59 pm

lawduder wrote:
UGA2010 wrote:
Anonymous Loser wrote:
UGA2010 wrote:Ok, so I'm confused about GradPLUS loans... I went on the website and was checking it out, clicked on the apply now button, clicked on Georgia, but only certain schools were listed, leaving out Georgia State, UGA, and others. Does this mean people attending those schools next year can't get GradPLUS loans? Why is that and where else could I look for loan information?


What website?



Sorry, I should have been more specific. I was looking at the Sallie Mae ones, since they have the lower interest rate. Now I understand different institutions have Graduate PLUS loans as well. Here is the Sallie Mae site though

--LinkRemoved--

ouch Sallie Mae GradPLUS is 8.5%, when I recieved my financial aid information from Emory it lists GradPLUS as 7.9%





did you apply for the GradPLUS, or did Emory just list it in your financial award without you applying? I didn't receive a GradPLUS loan in my Emory financial aid package, but I didn't apply for anything either. Thanks :)

Anonymous Loser
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Re: Grad Plus Loans

Postby Anonymous Loser » Mon Mar 15, 2010 7:16 pm

UGA2010 wrote:
Anonymous Loser wrote:
UGA2010 wrote:Ok, so I'm confused about GradPLUS loans... I went on the website and was checking it out, clicked on the apply now button, clicked on Georgia, but only certain schools were listed, leaving out Georgia State, UGA, and others. Does this mean people attending those schools next year can't get GradPLUS loans? Why is that and where else could I look for loan information?


What website?



Sorry, I should have been more specific. I was looking at the Sallie Mae ones, since they have the lower interest rate. Now I understand different institutions have Graduate PLUS loans as well. Here is the Sallie Mae site though

--LinkRemoved--


As others have pointed out, some institutions participate in the direct lending program: it might be that UGA and the other schools you've listed above are such institutions. People attending those schools can still get GradPLUS loans, but apparently not through Sallie Mae.

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ShibaDan
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Re: Grad Plus Loans

Postby ShibaDan » Tue Mar 16, 2010 8:51 am

So I think that Michigan is a direct lender, does that mean any GradPlus loans I take out if I go to Michigan will be at 7.9%?

lawduder
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Re: Grad Plus Loans

Postby lawduder » Wed Mar 17, 2010 8:47 am

lateforthesky16 wrote:did you apply for the GradPLUS, or did Emory just list it in your financial award without you applying? I didn't receive a GradPLUS loan in my Emory financial aid package, but I didn't apply for anything either. Thanks :)

It's a separate application found on their financial aid website. I haven't applied yet but I looked over it.

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vanwinkle
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Re: Grad Plus Loans

Postby vanwinkle » Wed Mar 17, 2010 10:29 am

def2104 wrote:So I think that Michigan is a direct lender, does that mean any GradPlus loans I take out if I go to Michigan will be at 7.9%?

I believe so, yes. You'll get detailed information on what you're being offered in your financial aid award statement.

whattodo2008
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Re: Grad Plus Loans

Postby whattodo2008 » Sat Mar 20, 2010 2:23 am

Is anyone considering substituting private loans for gradplus? Gradplus is fixed at 8.5. Many (if not all) private loans have a variable interest rate. Some add as little as 3.5% (if you have great credit) to the 3-month LIBOR (which stands at 0.25% right now). Yes, the LIBOR can go back up in the future, but historically speaking in the past 10 years it has not gone up too high (see http://www.moneycafe.com/library/3monthlibor.htm).

What do you guys think?

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ShibaDan
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Re: Grad Plus Loans

Postby ShibaDan » Sat Mar 20, 2010 8:33 am

whattodo2008 wrote:Is anyone considering substituting private loans for gradplus? Gradplus is fixed at 8.5. Many (if not all) private loans have a variable interest rate. Some add as little as 3.5% (if you have great credit) to the 3-month LIBOR (which stands at 0.25% right now). Yes, the LIBOR can go back up in the future, but historically speaking in the past 10 years it has not gone up too high (see http://www.moneycafe.com/library/3monthlibor.htm).

What do you guys think?


I thought about this because with a co-signer you might get a better rate, but the key word is might. If you do have great credit get a loan quote, what's the harm. As for the LIBOR or Treasury Rate going up too high, it isn't too likely.

Unadilla Kayaker
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Re: Grad Plus Loans

Postby Unadilla Kayaker » Sat Mar 20, 2010 9:24 am

I'm not 100% sure about this, but I think the non-payment rules for GradPlus are a bit laxer than for private loans (meaning deferment due to financial hardship, unemployment, further education, etc). I know this is the case for the Stafford loans, but I think there are extra benefits to the GradPlus as well. That might be a consideration.

Also, I'd imagine that at some point the interest rate on GradPlus will come down, at which point you could probably refinance. I did that once while in college and once after on Stafford loans.

I'm going to admit my novice level of understanding on this point, but suggest you look into factors other than the interest rate. Maybe others on TLS are more knowledgeable about those factors and could opine here.

Genericswingman
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Re: Grad Plus Loans

Postby Genericswingman » Sun Mar 21, 2010 1:13 pm

The qualifications cannot be based too much on FICO scores because the interest rate on the loan is fixed and the same for all applicants. FICO scores come into play because they help to calculate the risk premium that becomes part of the interest rate that is charged on loans. Since Grad PLUS loan's interest rate is the same for everyone, those with good FICO scores subsidize (theoretically) those with poorer FICO scores. The risk becomes pooled (more like insurance) with adverse selection.

apples
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Re: Grad Plus Loans

Postby apples » Mon Mar 22, 2010 3:33 pm

sorry if this is a dumb question, but do I apply for a Gradplus loan after i receive a financial aid award letter from a school so that I know how much of a Gradplus loan to apply for? I filled out all the fafsa, needaccess and special forms for individual schools, but nothing for gradplus. I do that later, correct?




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