A Grad PLUS loan is a federal student loan that lets graduate and professional students borrow up to the full cost of attendance at their school, minus any other financial aid they receive. Unlike Direct Unsubsidized Loans, which cap graduate borrowing at $20,500 per year, Grad PLUS loans can fill the remaining gap between your other aid and what your program actually costs. That flexibility comes at a price: higher interest rates, steeper fees, and a credit check.
How Much You Can Borrow
There is no fixed dollar cap on a Grad PLUS loan. Your maximum is your school’s cost of attendance minus any other financial assistance you’re receiving, including scholarships, grants, fellowships, and Direct Unsubsidized Loans. Cost of attendance includes tuition, fees, room, board, books, transportation, and personal expenses as calculated by your school’s financial aid office.
In practice, most graduate students should first take their full $20,500 in Direct Unsubsidized Loans for the year, since those carry a lower interest rate and no credit check. Grad PLUS loans are designed to cover whatever remains after that.
Interest Rate and Fees
For loans first disbursed between July 1, 2025, and June 30, 2026, the fixed interest rate on a Grad PLUS loan is 8.94%. That rate is locked in for the life of the loan, regardless of what happens to market rates later. By comparison, Direct Unsubsidized Loans for graduate students carry a lower fixed rate each year.
On top of the interest rate, Grad PLUS loans charge a loan origination fee of 4.228%. This fee is deducted from each disbursement before the money reaches you. If you borrow $10,000, about $423 is taken off the top, meaning you receive roughly $9,577 but still owe the full $10,000. That origination fee is roughly four times what Direct Unsubsidized Loans charge, which is another reason to exhaust your unsubsidized borrowing first.
The Credit Check Requirement
Grad PLUS loans are unusual among federal student loans because they require a credit check. The review isn’t looking at your credit score or debt-to-income ratio the way a private lender would. Instead, it’s checking for what the Department of Education calls “adverse credit history,” a specific list of negative events.
Your credit history counts as adverse if you have accounts totaling $2,085 or more that are 90 or more days delinquent, charged off, or in collections. Bankruptcy discharge, tax liens, wage garnishment, and foreclosure also qualify. If none of those apply to you, you’ll pass the check even if your credit score is modest.
What to Do if You’re Denied
A denial based on adverse credit isn’t necessarily the end of the road. You have two options. First, you can get an endorser, which is essentially a cosigner. The endorser must not have adverse credit themselves and agrees to repay the loan if you don’t. Second, you can appeal the decision by documenting extenuating circumstances, such as showing that the negative items were errors, are resolved, or resulted from a situation you’re actively addressing. Either path also requires you to complete PLUS Credit Counseling before the loan can be finalized.
Eligibility Requirements
To qualify for a Grad PLUS loan, you must be enrolled at least half-time in an eligible graduate or professional degree or certificate program. You also need to meet the general eligibility requirements for federal student aid, which include being a U.S. citizen or eligible noncitizen, having a valid Social Security number, and maintaining satisfactory academic progress.
Starting July 1, 2026, new restrictions take effect under the One Big Beautiful Bill Act. After that date, only students who were already enrolled and borrowing Direct Loans for their current program before July 1, 2026, can continue receiving Grad PLUS loans. They must remain continuously enrolled in the same program at the same school (an approved leave of absence doesn’t count as a break). Students starting new graduate programs after that cutoff will not be eligible.
Repayment Options
Repayment on a Grad PLUS loan begins after you graduate, leave school, or drop below half-time enrollment. There is a six-month grace period before your first payment is due, though interest accrues during that time and while you’re still in school.
You can repay under the Standard Repayment Plan (fixed payments over 10 years), the Graduated Repayment Plan (payments that start lower and increase every two years), or the Extended Repayment Plan (up to 25 years if you owe more than $30,000 in Direct Loans). Grad PLUS loans are also eligible for income-driven repayment plans, which set your monthly payment as a percentage of your discretionary income and forgive any remaining balance after 20 or 25 years of qualifying payments, depending on the plan.
Unlike Parent PLUS Loans, Grad PLUS loans do not need to be consolidated into a Direct Consolidation Loan to qualify for income-driven repayment. They’re eligible on their own.
Public Service Loan Forgiveness
Grad PLUS loans qualify for Public Service Loan Forgiveness without consolidation. If you work full-time for a qualifying employer (government agencies, nonprofits, and certain other public service organizations) and make 120 qualifying monthly payments under an income-driven repayment plan, the remaining balance is forgiven tax-free. For borrowers headed into lower-paying public service careers after graduate school, PSLF can significantly reduce the total cost of a Grad PLUS loan despite its high interest rate.
When Grad PLUS Loans Make Sense
Grad PLUS loans fill a specific role: covering graduate school costs that exceed what Direct Unsubsidized Loans and other aid can handle. The interest rate and origination fee are high compared to other federal options, but they’re often more favorable than private student loans, especially for borrowers without strong income or credit histories. Grad PLUS loans also come with federal protections that private loans lack, including income-driven repayment, PSLF eligibility, and deferment and forbearance options.
If your remaining funding gap is small, compare the Grad PLUS loan to private loan offers you might qualify for. Some private lenders offer lower rates for borrowers with excellent credit or a creditworthy cosigner. But if you’re planning to use income-driven repayment or pursue PSLF, keeping your borrowing in the federal system through Grad PLUS loans preserves access to those programs.