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Office of Financial Aid
University of Mississippi

Federal Direct Graduate PLUS Loan

What are Federal Direct Graduate PLUS Loans?

The Federal Direct Graduate PLUS Loan is available through the Direct Loan Program to help graduate students pay for their education. However, Direct Graduate PLUS Loans should only be used after exhausting your maximum annual Direct Loan eligibility. Graduate students must first borrow the annual Direct Loan maximum limit of $20,500 before receiving a Direct Graduate PLUS Loan.

Direct Graduate PLUS Loans are not based on financial need but may not exceed the total cost of attendance less any other financial aid. At Ole Miss graduate students who have filed the Free Application for Federal Student Aid (FAFSA) may apply regardless of their income, assets, or those of any dependent children.

Advantages are:

  • Payments are deferred as long as the graduate student remains at least half-time.
  • A fixed interest rate.
  • There is no prepayment penalty.
  • The credit criteria are generally more lenient than for private loans.
  • Eligible to be consolidated with Stafford and Perkins Loans.
  • In cases of economic hardship, repayment may be deferred for up to three years.
  • In the event of permanent disability or death, the loan will be forgiven.

Eligibility

In addition to having completed a FAFSA and first exhausting the $20,500 in annual Direct Loan eligibility, a graduate student must be enrolled in school at least half-time and must maintain Satisfactory Academic Progress. The Office of Financial Aid determines the amount of Direct Graduate PLUS Loan eligibility in accordance with federal requirements.

Adverse Credit Conditions include but are not limited to:

  • Bankruptcy (Chapters 7,11, or 12 within the past 5 years).
    Note: Department Policy does not consider Chapter 13 bankruptcy as adverse credit.
  • Voluntary surrender within the last 5 years.
  • Repossession within the last 5 years.
  • Foreclosure proceedings started.
  • Foreclosure within the last 5 years.
  • Deed in lieu of foreclosure.
  • Accounts currently 90 days or more delinquent.
    • Unpaid collection accounts.
    • Charge offs/write offs.
  • Wage garnishment within the last 5 years.
  • Defaulted loan that has been claim paid.
  • Lease or contract terminated by default.
  • County/State/Federal tax lien, within the past 5 years.

Eligibility for the Direct Graduate PLUS Loan depends on a modest credit check that determines if the graduate student has what is termed an “adverse credit history”.

How Much Can Be Borrowed?

Graduate students may borrow up to their total cost of attendance less other financial aid received such as grants and scholarships. On the graduate student’s financial aid award package this is listed as an “estimated Credit based Loan,” which will show you how much could potentially be applied for to be borrowed. The total cost of attendance is determined by the Office of Financial Aid based on an average cost for tuition, books, room and board, travel, and miscellaneous expenses for the academic year. It is important that each individual to fully understand how a Direct Graduate PLUS Loan will impact them financially. Most financial experts advise that one should not incur debt (excluding mortgage debt) that results in total monthly payments (debt-to-income ratio) exceeding 20% of your monthly gross income.

Interest Rates

For loans with a first disbursement date between July 1, 2022, and June 30, 2023, the interest rate is fixed at 7.54%.
For loans with a first disbursement date between July 1, 2023, and June 30, 2024, the interest rate is fixed at 8.05%.

Loan Fees

For loans made from October 1, 2022, to September 30, 2023, the origination fee is 4.228%.
For loans made from October 1, 2023, to September 30, 2024, the origination fee is 4.228%.

How do graduate students process a Federal Direct Graduate PLUS application?

  1. If eligible, a student will be awarded an Estimated Direct Graduate PLUS amount on their Financial Aid Award Notification. A FAFSA must be filed to establish eligibility.

  2. Borrowers who wish to utilize the Direct Graduate PLUS program should accept the loan on the Award Notification, indicating the exact amount desired.

  3. The Direct Loan program will conduct a pre-approval credit investigation and notify the applicant as to approval or denial.

  4. If approved, the Direct Loan Program will send the borrower a school-certified Direct Graduate PLUS Loan master promissory note. (This contract can be valid for up to 10 years as long as the graduate student borrows every 12 months). Borrowers should review the master promissory note for accuracy, sign it, and return it to the lender.

  5. Upon approval of your Direct Graduate PLUS Loan, you must complete Direct Graduate PLUS Loan Entrance Counseling online (one-time requirement) .

  6. Loan proceeds will be sent directly to the University. The disbursement will reflect the amount of the loan less origination fees . The proceeds will be applied to the graduate student’s account to clear any balances. Remaining funds will be direct deposited or mailed directly to the borrower in the form of a paper check.

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