Grad PLUS vs. Unsubsidized Stafford

[clement]

Hey there,
Does anyone know what the main difference is between Grad PLUS loans and unsubsidized stafford?

Also, do you HAVE TO max out subsidized/unsubsidized stafford loans before taking out the Grad PLUS? (anyone recommend a good lender?)?
THANKS!

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[Lesley]

Hey there,
Does anyone know what the main difference is between Grad PLUS loans and unsubsidized stafford?

Also, do you HAVE TO max out subsidized/unsubsidized stafford loans before taking out the Grad PLUS? (anyone recommend a good lender?)?
THANKS!

Interest rates. Max out your stafford loans first then use Grad PLUS.


Grad PLUS Loan

Unsubsidized loan is non-need based and can be used to replace student's and parents' contribution
Annual Limit Borrow up to the cost of attendance less other aid (including maximum Stafford)
Aggregate Limits No aggregate limit.
Interest Rates
8.5% fixed at disbursement
7.25% fixed at repayment > I think this can vary.



Stafford Loan Fixed interest rate of 6.8%.

Subsidized
Annual limit up to $8,500 may be available on subsidized funds

Unsubsidized
Dental, Medical, and Veterinary students may borrow up to $38,500 per year, $189,125 aggregate including undergraduate borrowing

 

[mshheaddoc]

Do you have to max out on your aggregate limit to use first? Or max out for the year?

 

[Lesley]

Do you have to max out on your aggregate limit to use first? Or max out for the year?

No. It is desirable and appears to be required to max out your annual Stafford limit for the year and then borrow from GradPlus to cover the remainder of your COA.

 

[okbye]

You also have to pass credit check with a Grad PLUS loan, or have a co-signer. There is no grace period like a Stafford loan, payments are due as soon as you graduate. There is no government subsidy so you will be gathering interest while in school. You can opt to make the interest only payments while you're still in school or in deferal, it will keep the balance from growing much larger than you were counting on.