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Minnesota State University, Mankato
Minnesota State University, Mankato

Federal Direct Graduate PLUS Loan

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The Federal Graduate PLUS Loan is intended to allow graduate students with acceptable credit histories to borrow to finance their graduate education.  Graduate students must complete a FAFSA application and be awarded prior to applying for a Federal Graduate PLUS Loan.  While not mandatory, it is strongly advised that a graduate student borrow from the Federal Direct program prior to attempting to borrow from the Federal Graduate PLUS Program.  A graduate student may borrow up to their Cost of Attendance (COA) less any other financial aid received.

Apply for a Federal Direct Graduate PLUS Loan

IMPORTANT: The PLUS Loan complies with both Satisfactory Academic Progress Standards (SAPS) criteria.

Loan Eligibility

An eligible graduate Federal Direct Graduate PLUS borrower must:

  • Be a U.S. citizen or eligible non-citizen (eligible non-citizens must supply documentation of their immigration status),
  • Meet all of the requirements for the Federal Direct Program (for this reason, The Federal Department of Education requires a FAFSA to be on file prior to processing a Federal Direct Graduate PLUS Loan),
  • Have a credit worthy history as determined by your lender, and
  • Not be in default or owe a refund on any Title IV Federal Student Aid.

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Credit Requirements

Minimum of 6 graduates credits is required.

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Loan Amounts

There are no annual or aggregate limits on Federal Direct Graduate PLUS loans. However, you may not borrow more than the cost of education (usually expressed as a yearly amount) as determined by the school, less any other financial aid received during the time period the loan will cover.  For example, if the cost of education is $14,000 per academic year, that is the maximum amount of student financial assistance a graduate student may receive from all sources including the Federal Direct Graduate PLUS Loan.

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Costs Involved

The default and origination fees are subtracted from the loan, by the Department of Education, to cover the expense of processing the loan and Federal Direct Graduate PLUS Loan defaults.  The fees and the current interest rate on your loan are printed on the loan disclosure statement you receive prior to or at the time your loan is disbursed. This disclosure will usually come from your lender's guarantor the Department of Education Servicer.

Origination Fees

  • First disbursed on or after October 1, 2017 and before October 1, 2018 = 4.264% origination fee
  • First disbursed on or after October 1, 2018 and before October 1, 2019 = 4.248% origination fee

This is a loan fee deducted proportionately from each loan disbursement you receive. This means the money you receive will be less than the amount you actually borrow. You're responsible for repaying the entire amount you borrowed and not just the amount you received.

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Disbursement of Funds

If you apply for the Federal Direct Graduate PLUS Loan for the academic year, your Federal Direct Graduate PLUS Loan funds will be disbursed at the beginning of each term (1/2 Fall and 1/2 Spring). Students that only apply for a single semester will receive their loan in a single disburesement. Your funds will be disbursed at the earliest possible disbursement date according to Minnesota State University, Mankato's predetermined disbursement schedule.

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You MUST repay the Federal Direct Graduate PLUS Loan.  It is not a grant.  Failure to repay the loan has serious consequences.  If you default on your loan, all national credit bureaus will be notified.  You will be subject to collections procedures by external collection agencies, wage garnishment, and seizure of federal income tax refunds.

Fall 2018 - Summer 2019

  • As of 7/1/2018, Federal Direct Graduate PLUS loan interest rate is fixed at 7.6% for the 2018-2019 school year.┬áThe interest on the Federal Direct Graduate PLUS loan is not paid by the U.S. Department of Education during in-school periods. Interest accrues from the time of final disbursement. However, interest accrued during periods of deferment can be paid periodically or can accrue and be capitalized and added to the principal amount of the loan, if your lender allows.

Payments begin on a Federal Direct Graduate PLUS loan after the final disbursement of the loan. Generally, the maximum repayment period is 10 years.  Repaying the loan as quickly as possible minimizes the interest costs.  A repayment schedule is sent to the parent borrower upon final disbursement of the loan. 

The Federal Direct Graduate PLUS Loan Program contains a variety of provisions designed for flexible repayment.   Among the provisions are deferments and forbearances, which may enable the borrower to temporarily suspend or reduce payments.  If problems arise in making payments, the lender or servicer should be contacted immediately to see if any of the following conditions are met.


A deferment is a period of time during which repayment requirements are temporarily suspended.  Deferments are granted for specific time periods and only for conditions set forth under federal law.  Deferment eligibility is based on the date that the PLUS loan was made and if the borrower has existing Federal Direct loans.


The Department of Education servicer is able to assist through times of difficulty in making payments through the use of forbearance.  If a borrower is not eligible for a deferment and has difficulty making the scheduled payments, lender or servicer should be contacted to discuss the possibility of a forbearance to reduce or suspend regular payment or lengthen the repayment period.

The Department of Education servicer may grant a forbearance if eligibility for deferment is exhausted, or if the borrower is involved in certain bankruptcy proceedings or is applying for a total and permanent disability cancellation.  In most cases, the decision regarding whether or not to grant forbearance is made by the lender or servicer.  The Department of Education servicer is very willing to work with borrowers when they believe the borrower has a commitment to repay the loan.

The interest which accrues on the loans during periods of forbearance is the borrower’s responsibility.  Payment of interest can be made during the forbearance or it can be capitalized and added to the loan.  If the interest is capitalized, the monthly payment amount may increase after the forbearance period has ended.

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