{"id":1382,"date":"2011-09-23T12:00:30","date_gmt":"2011-09-23T16:00:30","guid":{"rendered":"https:\/\/www.bu.edu\/finaid\/?page_id=1382"},"modified":"2024-08-30T15:23:00","modified_gmt":"2024-08-30T19:23:00","slug":"plus-vs-credit-based","status":"publish","type":"page","link":"https:\/\/www.bu.edu\/finaid\/graduate-students\/federal-direct-loans\/plus-vs-credit-based\/","title":{"rendered":"PLUS and Private Credit-Based Loan Comparison"},"content":{"rendered":"\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
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Credit-Based Loans in General<\/h4>\n<\/td>\n

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Federal PLUS Loans in Particular<\/h4>\n<\/td>\n<\/tr>\n

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Who Is the Borrower?<\/strong><\/div>\n
With some loans the parent borrows on behalf of the student. With other loans the student is the primary borrower, usually with a credit-worthy co-borrower who may or may not be the parent, depending on program restrictions.<\/span><\/div>\n<\/td>\n
With the Federal Graduate PLUS Loan, an eligible graduate, post-graduate, or professional program student is the borrower.<\/td>\n<\/tr>\n
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Is this loan available for International Students? <\/strong>Some lenders will not allow international students to borrow, others will, but will often require a credit-worthy US citizen co-borrower.
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No. With the Federal Graduate PLUS Loan, the borrower must be a U.S. citizen or permanent resident.<\/td>\n<\/tr>\n
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Interest Rates and Fees<\/strong><\/div>\n
Loans may be offered with interest rates that are fixed for the life of the loan or they may be variable. Fixed rates and variable rates may be tiered which means that the rate you are offered is determined by the strength of your credit. Most lenders do not charge fees.\u00a0<\/span><\/div>\n<\/td>\n
The interest rate for loans disbursed after June 30, 2024 and prior to July 1, 2025 is 9.08% fixed for the life of the loan. The net loan amount disbursed is less than the amount borrowed, because of an origination fee (see your disclosure statement for the specific amount) charged by the government.<\/td>\n<\/tr>\n
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Credit Criteria<\/strong><\/div>\n
Some lenders evaluate the strength of your credit based on your credit score, others consider your credit history, others use a combination of both, and some include an assessment scale that is at least in part proprietary. In most cases, a credit-worthy co-borrower is encouraged.<\/span><\/div>\n<\/td>\n
Must pass\u00a0PLUS Loan credit check and must not have adverse credit history. Students unable to meet the PLUS Loan credit criteria<\/a> may be able to borrow with a creditworthy \u201cendorser\u201d. Borrowers with loans approved via appeal or endorser must complete an online counseling session. The endorser cannot be released from the repayment obligation before the loan is repaid in full.<\/td>\n<\/tr>\n
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Minimum and Maximum<\/strong><\/div>\n
While the maximum amount a student could borrow in a credit-based educational loan is the annual cost of attendance (as determined by BU) minus any financial aid, including any Federal Direct Loan, some lenders impose minimum and maximum limits that are more restrictive.<\/span><\/div>\n<\/td>\n
Loans are approved from $100 up to the total annual cost of attendance minus any financial aid, including any Federal Direct Student Loan.<\/td>\n<\/tr>\n
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Repayment Terms<\/strong><\/div>\n
Repayment terms are set by the lender and may include the length of the repayment term, minimum monthly payment amounts, and whether principal and\/or interest payments are due while the student is enrolled. Most lenders have no prepayment penalties.<\/span><\/div>\n<\/td>\n
A 10-year standard monthly repayment of approximately $13.27 per $1,000 borrowed, with a $50 monthly minimum payment. Extended, graduated, and income-based repayment plans are available. Principal and interest payments begin 60 days after the loan has been fully disbursed. There is no prepayment penalty with PLUS Loans.<\/td>\n<\/tr>\n
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Enrollment Status<\/strong><\/div>\n
Many but not all lenders require that the student be enrolled at least half time and be in a degree program to be approved for the loan.\u00a0<\/span><\/div>\n<\/td>\n
Students must be enrolled in a graduate degree program for at least 6 credits each term. Credit must be accepted towards the degree.<\/td>\n<\/tr>\n
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Deferment Options<\/strong><\/div>\n
Many lenders offer borrowers the option to pay principal and interest while the student is enrolled or to pay interest only or make no payments while enrolled. Deferring repayment may increase the overall cost of borrowing.<\/span><\/div>\n<\/td>\n
PLUS Loan borrowers can defer payments while student is enrolled at least half time. During deferment period interest can be paid monthly, quarterly or can be capitalized quarterly.<\/td>\n<\/tr>\n
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Can Loan be Sold?<\/strong><\/div>\n
Some lenders retain ownership of the loans they originate while others bundle and sell their loans to a third party.\u00a0<\/span><\/div>\n<\/td>\n
The loan will be held by the U.S. Department of Education for the life of the loan.<\/td>\n<\/tr>\n
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Other Borrower Benefits<\/strong><\/div>\n
Some private lenders offer benefits such as interest rate reductions to borrowers who, for example have a prior customer relationship with the lender, agree to make payments electronically, graduate with good grades.\u00a0<\/span><\/div>\n<\/td>\n
Eligible for loan consolidation under Federal Direct Consolidation Loan Program.<\/td>\n<\/tr>\n
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Lender Website and More Information<\/strong><\/div>\n
More detailed information about loan products is available on each lenders website or by contacting the customer service department of the lender.<\/span><\/div>\n<\/td>\n
Here’s the link to get more information about PLUS Loans for graduate\/professional students<\/a>.<\/td>\n<\/tr>\n
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How to Apply<\/strong><\/div>\n
Most loans are applied for electronically via the lender’s website.<\/span><\/div>\n<\/td>\n
Here’s the link for graduate\/professional students to apply for a 2024\/2025 PLUS Loan<\/a>. Students borrowing a PLUS Loan for the first time at Boston University must also complete Entrance Counseling<\/a>. First-time PLUS borrowers and those who have borrowed with an endorser in the past must also complete a PLUS Master Promissory Note (MPN)<\/a>.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

Credit-Based Loans in General Federal PLUS Loans in Particular Who Is the Borrower? With some loans the parent borrows on behalf of the student. With other loans the student is the primary borrower, usually with a credit-worthy co-borrower who may or may not be the parent, depending on program restrictions. With the Federal Graduate PLUS […]<\/p>\n","protected":false},"author":1183,"featured_media":0,"parent":124,"menu_order":1,"comment_status":"closed","ping_status":"closed","template":"","meta":[],"_links":{"self":[{"href":"https:\/\/www.bu.edu\/finaid\/wp-json\/wp\/v2\/pages\/1382"}],"collection":[{"href":"https:\/\/www.bu.edu\/finaid\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/www.bu.edu\/finaid\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/www.bu.edu\/finaid\/wp-json\/wp\/v2\/users\/1183"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bu.edu\/finaid\/wp-json\/wp\/v2\/comments?post=1382"}],"version-history":[{"count":50,"href":"https:\/\/www.bu.edu\/finaid\/wp-json\/wp\/v2\/pages\/1382\/revisions"}],"predecessor-version":[{"id":10919,"href":"https:\/\/www.bu.edu\/finaid\/wp-json\/wp\/v2\/pages\/1382\/revisions\/10919"}],"up":[{"embeddable":true,"href":"https:\/\/www.bu.edu\/finaid\/wp-json\/wp\/v2\/pages\/124"}],"wp:attachment":[{"href":"https:\/\/www.bu.edu\/finaid\/wp-json\/wp\/v2\/media?parent=1382"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}