The Federal Direct Grad PLUS loan supplements the Stafford loan for most Georgetown Law students. Important facts about the Federal Direct Grad PLUS Loan Program:

• Students may receive a Grad PLUS loan in an amount equal to the standard student budget, minus all other forms of aid.
• There is no lifetime aggregate on Grad PLUS loans.
• Interest is charged on Grad PLUS loans beginning on the date of disbursement and can either be paid by the student while in school or accrued and capitalized at repayment (six months after either graduation or after the student ceases to be enrolled at least half-time).
• The interest rate is fixed at 7.9%.
• There is a combined 4% origination fee on Direct Grad PLUS loans.
• These loans are generally disbursed in two installments, one at the beginning of each semester.
• Payments are made over a 10-year period, unless the borrower extends the repayment period to up to 25 years (based on total loan volume borrowed).  Grad PLUS loans may be included in a Federal Direct Consolidation Loan (which have a payment period of up to 30 years).

Arrival of Funds

• Funds arrive electronically and are posted to the student's account no sooner than just prior to the start of classes.
• If the student owes Georgetown Law, funds will be applied first to the outstanding account balance (tuition, housing, and other authorized charges) and the excess will be refunded though the Student Accounts Office.
  

 

The Financial Aid Office expects that the majority of students will select the Grad PLUS loans as their choice to supplement their Stafford Loans, but there are valid reasons for choosing a commercial loan.  We have distilled the available data and compiled the information below for your consideration.  Please review this information before making your borrowing choice.

 
How Federal Direct Grad PLUS differs from commercial loans

• The interest rate is fixed for the life of the loan at 7.9%.  (Commercial loan rates are variable by borrower and typically variable over the life of the loan.)
• Offers the same payment deferment and forbearance options as the federal Direct Stafford Loan (e.g. hardship, unemployment (3 years) and in-school (unlimited for ½ time enrollment)).  Most commercial loans only offer one year of forbearance.
• Commercial loan origination fees vary by lender and borrower. 
• Grad PLUS credit requirements are less stringent than those for commercial loans.
• The Grad PLUS may be consolidated with other federal loans.
• The Grad PLUS are eligible for Income-Based Repayment and Federal Public Service Loan Forgiveness programs.

 

You may prefer Grad PLUS if:

• You like the certainty that a fixed-rate loan provides.
• You plan to pursue a career in government service or public interest work, as both federal and LRAP benefits will be significantly more advantageous.  (LRAP benefits will not be available on commercial loans for students entering Georgetown Law in the 2009-2010 academic year or later.  Federal benefits are not available on any commercial loans.)
• If your credit is good, fair, or poor, your cost will likely be lower.
• You like the protection that the greater deferment and forbearance options provide.

 

You may prefer a commercial loan if:

• You are comfortable with the possibility of interest rates increasing beyond the interest rate cap (7.9%) of the Grad PLUS loan.
• You have top-tier credit – at this point in time, borrowers with excellent credit may be charged less interest, but if interest rates climb, this benefit decreases or disappears altogether.
• You believe that there is almost no possibility that you may use the deferment or forbearance options.
• You plan to borrow the loan only for a short time.