| 1. Comparison of Grad PLUS or graduate student | | | | credit report. |
| loans with Private Loans | | | | The applicant has been the subject of a default |
| Interest Rates - While GradPLUS or graduate student | | | | determination on any debt, foreclosure, tax lien, |
| loans offer a fixed interest rate for the term of the | | | | repossession, wage garnishment or a write-off of a |
| loan, private loans tend to have a variable rate based | | | | Title IV debt during the five year period prior to the |
| on your credit score and credit history and may | | | | date of the credit report. |
| increase or decrease according to market conditions. | | | | 6. Who is an endorser? |
| Repayment - Graduate student loans are based on a | | | | An endorser is a credit-worthy person who co-signs |
| 10-year repayment while private loans offer variable | | | | your graduate student loan. |
| repayment terms mostly in the range of 12-30 years. | | | | 7. What are the Repayment Options in GradPLUS and |
| Consolidation - Graduate student loans may be | | | | when does one have to start paying up? |
| consolidated with other federal education loans such | | | | Level Payment Plan: equal monthly payments over |
| as Stafford or Direct Plus while private loans are | | | | the term of the loan. |
| more of personal loans with no consolidation features. | | | | Graduated Repayment Plan: two years of |
| The consolidation loan program in GradPLUS allows | | | | interest-only payments, followed by increased |
| for better debt management and repayment options. | | | | payments covering interest and principle for the |
| Credit Scores - Although both require a credit check, | | | | remainder of the loan. |
| graduate student loans have a lighter sentence and | | | | Income Sensitive Plan: payments adjusted to the |
| are open to people with bad credit. Private loans are | | | | borrower's income. |
| stricter in their credit check and may even look at | | | | Extended Repayment Plan: payments can be |
| your FICO scores, debt to income ratio, income | | | | extended up to a 25 year term. |
| employment status and other credit factors. You | | | | The first payment is usually required within 60 days |
| may also need a creditworthy co-signer to approve | | | | after the final loan is disbursed. However, many |
| the loan. | | | | lenders do offer a deferred payment option if you |
| Deferment and Forbearance - GradPLUS loans are | | | | are still in school attending at least half time. There is |
| federal loans offering same payment deferment and | | | | currently no provision for a grace period on the |
| forbearance options as the federal Stafford loan. | | | | GradPLUS loan, which means that students would |
| Forbearance covers factors such as unemployment | | | | begin repayment immediately upon graduation or if |
| and economic hardships up to three years and | | | | they drop below half-time status. |
| deferment of payments while in-school is unlimited | | | | 8. What is COA - Cost of Attendance? |
| provided you maintain at least part time enrolment. | | | | The cost of attendance is usually a yearly figure |
| Many private loans only offer one year of | | | | summarizing the various costs of attending the |
| forbearance. | | | | school. These include tuition, fees, on-campus room |
| 2. What is the amount that can be borrowed using | | | | and board, allowances for books, supplies, |
| GradPLUS? | | | | transportation etc. It also includes miscellaneous |
| The loan amount at Gradaute student loans cannot | | | | personal expenses like allowances on purchase of a |
| exceed your total cost of attendance unless other | | | | computer as well as disability expenses. |
| financial aid is received. | | | | 9. When does interest begin to accrue and when is it |
| 3. Is FAFSA required to apply for GradPLUS loans? | | | | capitalized? |
| Yes, FAFSA must be filed before applying for | | | | Interest starts to accrue as soon as the first |
| GradPLUS. | | | | disbursement is made. Interest is capitalized when the |
| 4. Are there fees on GradPLUS loans? | | | | accrued interest is added to the loan principal. |
| There is a 3% origination fee and a 1% guarantee | | | | 10. Graduate Student Loan V/s Private Loan - what is |
| fee charged on the loan amount and both have to | | | | right for me? |
| be paid up front. | | | | The Private loan should be taken if: |
| 5. What is adverse credit? | | | | You do not mind an increase in the interest rate |
| Adverse Credit is when: | | | | which is usually fixed with a GradPLUS loan. |
| The applicant has been unable to pay his debts for | | | | You have a good credit score. |
| more than 90 days. | | | | There is little possibility for you to use the deferment |
| The applicant has had a debt discharged under | | | | or forbearance options. |
| bankruptcy in the five years prior to the date of the | | | | The loan is short term. |