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Grad PLUS loans are federal student loans for graduate and professional students. Although Grad PLUS loans have higher interest rates and fees than some other types of federal student loans, they also have a major benefit — virtually no borrowing limits. You can borrow up to the full cost of attendance of your school, minus any other financial aid you’ve already received.

Read on for more on how Grad PLUS loans work, including their eligibility requirements, interest rates, and repayment options.

What Are Grad PLUS Loans?

If you’re planning to attend a graduate or professional program, a Grad PLUS loan (also known as a Direct PLUS loan) could help cover costs. Issued by the Department of Education, Grad PLUS loans are student loans designed for graduate and professional students.

PLUS loans are not the only federal loans available to you as a graduate student — you can also borrow federal Direct Unsubsidized loans. Direct Unsubsidized loans have lower interest rates and fees than PLUS loans, but they come with borrowing limits.

If you’ve hit your limit and need additional funding, a Grad PLUS loan could cover the gap. As mentioned above, you can borrow up to the full cost of attendance of your program, minus any other financial aid you’ve already gotten. This flexibility can be helpful for students who are attending pricey programs.

Recommended: How Do Student Loans Work? Guide to Student Loans

What Can Grad PLUS Loans Be Used for?

Grad PLUS loans can be used for tuition, fees and other education-related expenses. These expenses include,

•   Housing

•   Food

•   Textbooks

•   Computers and other supplies

•   Study abroad expenses

•   Transportation

•   Childcare costs

A Grad PLUS loan will first be disbursed to your financial aid office, which will apply the funds toward tuition, fees, room and board, and any other school charges. The financial aid office will then send any remaining funds to you.

Recommended: What Can You Use Student Loans For?

Who Is Eligible for Grad PLUS Loans?

To be eligible for a Grad PLUS loan, you must be a graduate or professional student enrolled at least half-time at an eligible school. What’s more, your program must lead to a graduate or professional degree or certificate.

You’ll also need to meet the eligibility requirements for federal financial aid (more on this below), as well as submit the Free Application for Federal Student Aid (FAFSA®).

Typical Grad PLUS Loan Requirements

Besides being enrolled in an eligible graduate or professional program, you need to meet a few other requirements to take out a Grad PLUS loan:

Meet the Requirements for Federal Student Aid

Since Grad PLUS loans are part of the federal student aid program, you must be eligible for federal aid to borrow one. Here are some of the criteria:

•   Be a U.S. citizen or eligible noncitizen

•   Have a valid Social Security number (with some exceptions)

•   Have a high school diploma, General Educational Development (GED) certificate or other recognized equivalent

•   Maintain satisfactory academic progress while in school

•   Not already be in default on a federal student loan or owe money on a federal grant

If you’re a non-U.S. citizen or have an intellectual disability or criminal conviction, additional requirements might apply.

Submit the FAFSA

You’ll need to submit the FAFSA before you can borrow a Grad PLUS loan. After applying to grad school, you can submit this form, free of charge, on the Federal Student Aid website or by mail. Since the FAFSA only applies to a single academic year, you’ll need to submit it every year you’re in school and want to receive financial aid.

Complete the Grad PLUS Loan Application

Along with submitting the FAFSA, you’ll also need to fill out a separate application for the Grad PLUS loan. You can find and submit the GRAD Plus loan application on the Federal Student Aid website, though some schools have separate processes. Your financial aid office can advise you on the steps you need to take.

If your application is approved, you’ll need to agree to the terms of the loan by signing a Master Promissory Note. If you haven’t borrowed a Grad PLUS loan before, you’ll also be required to complete student loan entrance counseling.

Not Have Adverse Credit History (or Apply With an Endorser)

While you don’t need outstanding credit to qualify for a Grad PLUS loan, you can’t have adverse credit. According to the Department of Education, you have adverse credit if one of the following applies to you:

•   You have accounts with a total balance greater than $2,085 that are 90 or more days delinquent

•   You’ve experienced a default, bankruptcy, repossession, foreclosure, wage garnishment, or tax lien in the past five years

•   You’ve had a charge-off or write-off of a federal student loan in the past five years

If you have adverse credit, you have two options:

•   Appeal the decision due to extenuating circumstances. For example, you could provide documentation showing that you paid off a delinquent debt on your credit report.

•   Apply with an endorser who does not have adverse credit. Your endorser will be responsible for repaying the loan if you fall behind on payments.

💡 Quick Tip: New to private student loans? Visit the Private Student Loans Glossary to get familiar with key terms you will see during the process.

Grad PLUS Loans Interest Rates

Grad PLUS loans come with fixed interest rates that will remain the same over the life of your loan. They also have a disbursement fee, which is a percentage of your loan amount that gets deducted from your loan.

Congress sets rates and fees on federal student loans periodically. These are the current Grad PLUS loan interest rates and fees:

Repaying Your Grad PLUS Loans

Grad PLUS loans are eligible for a variety of federal repayment plans:

•   Standard repayment plan, which involves fixed monthly payments over 10 years.

•   Income-driven repayment, including Pay As You Earn (PAYE), Income-Based Repayment (IBR), and Income-Contingent Repayment (ICR). These plans adjust your monthly student loan payments to a percentage of your discretionary income while extending your loan terms to 20 or 25 years. If you’ve made on-time payments but still have a balance at the end of your term, it may be forgiven on the IBR plan only, as of late March 2025. (Forgiveness on the other IDR plans is currently paused.) The amount forgiven may be considered taxable income by the IRS.

•   Extended repayment, which extends your repayment term to 25 years and lets you pay a fixed or graduated amount.

•   Graduated repayment, which lowers your student loan payments in the beginning and increases them every two years. You’ll pay off your loan over 10 years, and your final payments won’t be more than three times greater than your initial payments.

Grad PLUS loans are also eligible for certain federal forgiveness programs, such as Public Service Loan Forgiveness.

Other Options to Pay for Grad School

Grad PLUS loans aren’t the only way to pay for graduate school. Here are some alternative options:

Direct Unsubsidized Loans

You can borrow up to $20,500 per year in Direct Unsubsidized loans as a graduate student with an aggregate loan limit of $138,500, including any loans you borrowed as an undergraduate.

Here are the interest rate and disbursement fee for graduate students:

Grants and Scholarships

Besides student loans, you can also pursue grants and scholarships for graduate school. You can find grants and scholarships from a variety of sources, including the Department of Education, your state, your school, or a private organization. By earning grants and scholarships, you might not need to borrow as much in student loans.

Private Student Loans

You can also explore your options for private graduate student loans from banks, online lenders, or credit unions. Some lenders offer interest rates that start lower than Graduate PLUS loan interest rates and don’t charge an origination fee.

Although private student loans aren’t eligible for federal repayment plans or programs, some lenders offer flexible repayment options or deferment if you need to pause payments. But, because private student loans aren’t required to offer the same borrower benefits as federal student loans, they are generally borrowed as a last resort option after all other sources of financing have been exhausted.

The Takeaway

If you’re looking for ways to pay for graduate school, a Grad PLUS loan could help. You can use this flexible loan to cover your school’s cost of attendance, as well as choose from a variety of federal repayment plans when it comes time to pay it back.

Alternative options to paying for school include federal Direct Unsubsidized loans, scholarships and grants, and private student loans.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

FAQ

What kind of loan is Grad PLUS?

The Grad PLUS loan is a federal student loan issued by the Department of Education. It is designed specifically for graduate and professional students.

Is there a max on Grad PLUS loans?

There is virtually no limit on the amount you can borrow with a Grad PLUS loan. You can borrow up to your school’s cost of attendance, minus any other financial aid you’ve already received.

Can Grad PLUS loans be used for living expenses?

Yes, you can use Grad PLUS loans to cover your living expenses while at school. You must use your loan for education-related expenses, which can include housing, food, supplies, transportation, and other costs related to attending school.

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SOISL-Q225-007

In March 2025, President Donald Trump signed an executive order directing the U.S. Secretary of Education to close down the Department of Education (DOE). He also announced that the Small Business Administration would take over the student loan portfolio, though there have been no additional details.

It’s uncertain what will happen next, since closing the DOE would require an act of Congress. Read on to learn what student loan borrowers should know about Trump and student loans — including Trump’s stand on student loan debt and forgiveness — and steps to take to prepare for potential changes.

Overview of Proposed Changes

President Trump has indicated that there may be some upcoming changes to the way student loans are handled, though it’s unclear how things might evolve. Here’s where things stand as of mid-April 2025.

Potential Closing of the Department of Education

The Department of Education was created by Congress, which means that closing it fully would require an act of Congress. But since March 2025, the DOE’s workforce has been cut almost in half, and as a result, the department may operate in a significantly reduced way.

To put any changes in perspective, it’s helpful to know what the DOE does. The Department of Education has been responsible for overseeing 100,000 public and 34,000 private schools in the U.S., providing federal grants for needy schools and programs, evaluating public and private schools for curriculum quality, enforcing Title IX guidelines, and investing in education research and development.

The DOE has also managed the nearly $1.7 trillion in federal student loans borrowed by tens of millions of Americans, as well as about $30 billion in Pell Grants for lower-income college students.

Even though Trump technically cannot close down the department through an executive order, the DOE’s scope and effectiveness may be limited going forward.

Potential Reduction or Elimination of Loan Forgiveness Programs

One of the most well-known student loan forgiveness programs is the Public Service Loan Forgiveness (PSLF) program. PSLF forgives the remaining balance on a borrower’s federal Direct loans as long as they make 120 qualifying monthly payments under a qualifying repayment plan while working full-time for an eligible employer.

But changes may be coming to the program. In early March 2025, the President signed an executive order to limit the eligibility for PSLF. According to the order, organizations that do work involving “illegal immigration, human smuggling, child trafficking, pervasive damage to public property and disruption of the public order” would be excluded from eligibility. It is unclear, however, which organizations would no longer be considered a qualifying employer for the PSLF program.

For now, the DOE says PSLF is unchanged, and borrowers can continue to pursue forgiveness under the program. Trump’s executive order requested an update to the program’s regulations, a process that can typically take at least a year.

Changes to Repayment Plans

Income-driven repayment (IDR) plans — which include Income-Contingent Repayment (ICR), Income-Based Repayment (IBR), Pay As You Earn (PAYE), and Saving on a Valuable Education (SAVE) — were created to make repayment easier for borrowers who can demonstrate that paying back their student loans is a significant financial burden.

Under IDR plans, payments are based on a borrower’s discretionary income and family size, which may help lower student loan payments.

Ordinarily, the remaining balances on eligible student loans are forgiven under IDR plans after a borrower makes a certain number of qualifying on-time payments over 20 to 25 years. But as of late March 2025, forgiveness has been paused on all of the IDR plans except IBR. (The IBR plan is excluded because it was enacted separately by Congress.)

Applications for IDR plans were put on hold in early 2025, after a federal court injunction. But applications for three of the IDR plans are available again.

However, the SAVE plan is no longer available for new borrowers. Forgiveness has been paused for borrowers who were already enrolled in the plan, and they have been placed in interest-free forbearance.

Borrowers can get updates on IDR plans on the Federal Student Aid website.

Potential Impact on Borrowers

Although much remains uncertain, there are some possible challenges borrowers may face when it comes to Trump’s stand on student loan debt.

Administrative Challenges

The DOE manages federal student loans through its Office of Student Aid (FSA), dealing with loan disbursement and borrower assistance among other things. The President has announced that federal student loans might be taken over by the Small Business Administration, but it’s not clear what will happen on this front.

Borrowers should continue to make their monthly student loan payments. Review your student loan paperwork and make sure you understand student loan statements, how much you owe, and when the payments are due.

It’s also a good idea to regularly monitor your loan status, balance, and payments. If you spot something that doesn’t look right or you have questions, contact your loan servicer.

Changes in Repayment Options

So far, changes in repayment options include the SAVE plan no longer being available, as noted above. In addition, forgiveness is on hold for three of the IDR plans except for the IBR plan. This is something to keep in mind if you’re considering changing student loan repayment plans and hoping to achieve student loan forgiveness.

Legal and Political Considerations

Despite the executive order about the DOE, closing down the Department of Education and making significant changes to the student loan program would technically require action from Congress. The matter has headed to the courts.

Legal Challenges

In late March 2025, two lawsuits were filed against the Trump administration over the executive order to close the DOE. One was filed by the National Education Association, public school parents, the NAACP, and a labor union; the other lawsuit was brought by two Massachusetts school districts, the American Federation of Teachers, and a coalition of labor unions, among other groups.

Both lawsuits say that closing the Department of Education and moving student loans to the Small Business Administration violates federal law and the Constitution because only Congress can shut down the DOE and make these kinds of changes.

A spokesperson for the Department of Education said in response that the Trump administration has pledged to work with Congress to close the department.

Alternatives and Additional Support

Amid all the uncertainty, what should student loan borrowers do? For those looking for ways to potentially reduce their student loan payments or qualify for forgiveness, there are a few strategies to explore.

•   Student loan consolidation: Consolidating student loans is one option that could help you manage your payments. For instance, a Direct Consolidation Loan allows you to combine multiple federal loans into one new loan to streamline payments and potentially lower your monthly payment amount.

•   Paying down loan principal: You could also direct any additional money you have — such as a tax refund or a bonus at work — to help pay off your loan principal, which could help reduce the amount of interest you owe over the life of the loan.

•   State forgiveness programs: For those looking for loan forgiveness options, many states offer state-specific forgiveness programs, especially if you work in a public service field like teaching or health care. Search your state government website to see what may be available.

•   Employer repayment programs: Additionally, check to see if your employer has a loan repayment assistance program that could help you repay your loan. The terms of these programs vary depending on the employer, but in general, an employer might establish a maximum amount they will contribute, and the employee may have to work for the company for a specific period of time to be eligible. Check with your benefits or HR department.

•   Student loan refinance: Some borrowers may want to consider student loan refinancing, which involves paying off your existing student loans with a new loan from a private lender. Ideally, the new loan will have a lower interest rate, which could lower your monthly payments, or more favorable loan terms.

If you’re curious about how to refinance, be aware that you can refinance both private and federal student loans. However, it’s important to note that refinancing federal student loans makes them ineligible for federal benefits like income-driven repayment plans and Public Service Loan Forgiveness.

Recommended: Student Loan Refinancing Calculator

The Takeaway

While President Trump has issued an executive order to close the Department of Education and announced that the Small Business Administration will take over the student loan portfolio, there is much uncertainty about the proposed changes. In the meantime, student loan borrowers should continue to make their monthly payments.

Those looking for some debt relief can explore federal loan forgiveness programs such as income-driven repayment plans, state-specific loan forgiveness programs, and employer loan repayment assistance programs.

Additionally, borrowers might choose to pay extra toward their loan principal to help reduce the amount of interest they owe overall or explore student loan consolidation or refinancing.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

FAQ

How could repayment plans change under the proposed policies?

There have been some changes to the federal income-driven repayment (IDR) plans under the Trump administration. With IDR plans, the remaining balances on eligible student loans are forgiven after a borrower makes a certain number of qualifying on-time payments over 20 to 25 years. But as of late March 2025, forgiveness has been paused on all of the IDR plans except Income-Based Repayment.

Additionally, the Saving on a Valuable Education (SAVE) plan is no longer available for new borrowers. Forgiveness has been paused for borrowers who were already enrolled in the plan, and they have been placed in interest-free forbearance.

What impact will these changes have on current student loan borrowers?

Current student loan borrowers may see some changes to IDR plans. For example, the only IDR plan currently offering forgiveness is IBR. Also, the SAVE plan is no longer available to new borrowers.

Otherwise, as of April 2025, the Department of Education is continuing to disburse federal Direct Loans and Pell Grants. And the process for filling out and submitting the Federal Application for Federal Student Aid (FAFSA) is not expected to change at the moment.

Will existing loan forgiveness benefits be revoked?

It’s unlikely that existing loan forgiveness benefits would be revoked, because once the federal government discharges debt and the borrower receives official notification of that discharge, it is typically considered final and irreversible. Any attempt to revoke loan forgiveness benefits would also likely be met with legal challenges.

What legal hurdles could impede the implementation of these proposals?

Lawsuits have already been filed against the Trump administration over the executive order to close the Department of Education. The lawsuits maintain that closing the Department of Education and moving student loans to the Small Business Administration violates federal law and the Constitution because only Congress can shut down the department and make these kinds of changes.

Are there alternative options for borrowers if federal programs are reduced?

If federal programs are reduced, borrowers have several alternative options for reducing their student loan payments and pursuing loan forgiveness. These include paying down student loan principal to reduce the amount of interest owed over the life of the loan, exploring state-specific loan forgiveness programs and employer loan assistance programs, and considering student loan consolidation or refinancing to make monthly loan payments more manageable.

Photo credit:iStock/Inna Kot

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