Student Assistance Foundation
(SAF), a nonprofit organization that helps students nationwide finance
and pursue post-secondary education, especially in the area of a student loan consolidation program, is making graduate and
professional school goals reachable by offering the new Federal Grad PLUS
loan at a lower interest rate than the U.S. government.
The fixed interest rate set by the government is 8.5 percent, whereas SAF can
reduce rates to 7.75 percent or lower. Available only since July 1, 2006, the
Grad PLUS loan makes graduate school an option for a broader range of students
who would otherwise be forced to pay up to 50 percent of costs out-of-pocket,
or finance additional expenses with a combination of loans.
"The Grad PLUS loan is the biggest change in graduate financial
aid in nearly 15 years," said Jim Stipcich, President of SAF. "As a result, many
graduate students may no longer be using alternative loans for their post-baccalaureate
Upon meeting certain on-time payment requirements, Grad PLUS borrowers of SAF
*Three percent of their original loan amounts returned to them as credits against
their loan balances
*A 0.75 percent interest rate reduction immediately upon full disbursement of
*An additional 0.50 percent interest rate reduction for using automated payment
*In-school deferments that postpone repayment until after graduation
The Grad PLUS loans can cover the entire cost of graduate or professional school,
less other financial aid. Federal Stafford loans, one of the most common funding
sources for undergraduate and graduate students, are offered at a lower interest
rate than PLUS loans but can only be borrowed up to $18,500 per year. This is
where the new Grad PLUS loan can make up the rest, including tuition,
books, supplies and living expenses.
Formerly, PLUS loans were only available to undergraduate students and were to
be handled and paid by their parents, as is evidenced in the full title, Parent
Loan for Undergraduate Students. Grad PLUS loans are offered direct-to-students
through SAF. Eligibility is largely dependent on the borrower’s credit
rating and history. Also, the borrower must be a graduate or professional student
enrolled at least part-time in a degree program and must have a valid Social
Security number, be a U.S. citizen or eligible permanent resident. The FAFSA
Financial Aid Application is also required.
To learn more about the new Grad PLUS loans offered by SAF click here.