Should I take out a Federal Direct Grad PLUS Loan or a private loan?
The Federal Direct Grad PLUS Loan is available for Graduate and Professional students only.
What do these two types of loans have in common?
- The Graduate student is the borrower.
- A credit-worthy cosigner/endorser may be required for approval.
- The loan limit per year is the student's estimated cost of attendance as determined by TCU minus other financial aid the student is receiving.
- Interest begins accruing at disbursement.
| Federal Direct Grad PLUS Loan | Private Education Loan | |
| Application Process | FAFSA is required; student must utilize Stafford Loans before Grad PLUS; half-time enrollment required | Student can apply with any lender |
| Loan Fee | 2.5% (deducted from each disbursement) | Varies, sometimes based on credit; usually added to loan amount |
| Interest Rate | Fixed at 7.9% | Variable interest rate (between 6% and 20%) based on credit score and credit history; rate can change as often as monthly |
| Interest Capitalization | Interest capitalized (added to principal) at repayment | Varies, sometimes as often as monthly |
| Credit Requirements | Based on federal standards; no debt to income ratio or credit score is used | Varies based on lender, but most require a minimum of 3 years positive credit history and at least 3 open credit accounts |
| Consolidation | Eligible for Federal Consolidation programs | Not eligible for Federal Consolidation program; some lenders offer private consolidation |
| Payment Deferment Options | Federal deferment and forbearance options exist | In-school deferment generally available (except Sallie Mae Smart Option Loan); some lenders offer minimal forbearance options |
| Loan Cancellation/ Forgiveness | Loan is cancelled upon death of borrower or upon borrower's total and permanent disability; some forgiveness options available for certain public interest careers | Most private education loans are not discharged upon the borrower's death or disability (exceptions are Sallie Mae and Wells Fargo); no known forgiveness options |
| Loan Repayment | Begins 6 months after graduation | Repayment may begin immediately after graduation or after a short time period |
Debbie Mar, Manager
Graduate Aid Programs
Financial Aid
Sadler Hall Room 3101
817-257-7872
