Graduate PLUS Loans vs. Private Student Loans

Many PCOM students will consider funding their educational and living expenses with federal or private student loans, or a combination of the two.

A common question during the financial aid process is whether to borrow a federal Graduate PLUS loan or a private student loan.

 
Federal Direct Graduate PLUS Loan
 
Non-Federal Private Student Loan

How to Apply

Login to studentloans.gov and complete:

  • a Graduate PLUS Loan Master Promissory Note.
  • a Graduate PLUS Loan Application.
    • View full details on applying.
    • A credit check is part of the PLUS Loan Application. If a student does not pass the credit check, the student can either apply for an appeal with the Department of Education or use a credit-worthy endorser.
 
  • View our PDF to learn about important questions you should ask lenders when applying for a non-federal private student loan.
  • Discuss the terms, conditions and application process of the private student loan with the lender.

Eligibility
  • FAFSA required.
  • Credit check required.
  • Must be enrolled as at least a half-time student, in good academic standing and working toward a degree or certificate.
 
  • No FAFSA required.
  • Credit check required.
  • Must be enrolled as at least a half-time student, in good academic standing and working toward a degree or certificate.

Co-Signer
  • No co-signer required, but a credit co-signer can be used if credit is declined.
 
  • No co-signer required, but having a co-signer can dramatically decrease your interest rate.
  • Discuss details and conditions with lender.

Lender
  • U.S. Federal Government, however the loan is serviced by an assigned loan servicing company.
 
  • Bank, credit union or lending institution.

Interest Rate
  • 7.00% fixed interest rate for loans with 1st disbursement date between 7/1/2017 - 6/30/2018
 
  • Variable and fixed rates available.
  • Rates vary by lender and credit worthiness.
  • Having a good credit rating and/or using a credit‐worthy cosigner may dramatically decrease your loan interest rate.
  • Discuss details and conditions with lender.

Interest Accrual
  • Interest begins accruing upon first disbursement.
  Interest usually begins accruing upon first disbursement.
       
Interest
Capitalization
  • Interest capitalizes upon repayment or at end of a deferment/grace period.
 
  • Varies by lender.
  • Some lenders capitalize interest monthly or quarterly.
  • Discuss details and conditions with lender.

Loan Fees
  • 4.264% loan fee for loans with 1st disbursement date between 10/1/2017 - 9/30/2018
 
  • Usually no loan fees.
  • Discuss details and conditions with lender.

Loan Limit
  • Up to Cost of Attendance minus other financial aid (loans, scholarships and federal work study) awarded.
 
  • Up to Cost of Attendance (loans, scholarships and federal work study) minus other financial aid awarded.

Aggregate Lifetime
Borrowing Limit
  • None.
 
  • Varies by lender.
  • Discuss details and conditions with lender.

Repayment
Grace Period
  • Student may request a 6-month post-enrollment deferment from lender after student ceases to be enrolled at least half-time or graduates.
 
  • Varies.
  • Discuss details and conditions with lender.

Repayment Plans
  • Various repayment plans available including:
    • Multiple income-driven repayment plans.
    • Standard (10 years)
    • Extended (25 years)
    • and more.
 
  • Most lenders offer 10-20 year repayment plans.
  • Most lenders do not offer income-driven repayment plans.
  • Discuss details and conditions with lender.

Consolidation  
  • Non-federal private student loans cannot be consolidated with federal student loans.
  • Eligible for student loan refinancing.

Public Service Loan
Forgiveness (PSLF)
  • Eligible for PSLF.
 
  • Not eligible for PSLF.

Death/Disability
  • Loans discharged upon borrower death or disability.
 
  • Private loans may have discharge for death or disability.
  • Discuss details and conditions with lender.