Skip to main content

Direct Graduate PLUS vs. private loan criteria

The following chart allows you to compare the eligibility and loan terms of the Graduate PLUS loan with the requirements that are typical of many private educational loans available to students from commercial, for-profit lenders. Private educational loans from commercial lenders are too numerous to catalog here, so this chart uses typical rates, terms, and conditions of private lenders.


Grad PLUS loan vs private loan
  GRADUATE PLUS LOAN PRIVATE LOAN
Borrower Student is borrower Student is borrower
Credit check Eligibility based on approval of credit history (no accounts in default, collections status, charge off, write off, or 90-days past due status), not credit score; if credit requirement not met, a credit-worthy endorser is an option for eligibility (an endorser, unlike a co-signer, is not liable for repayment.) Credit approval based on credit score and history; a credit worthy co-signer, who agrees to be liable for the loan, may be required for best terms or eligibility
Annual maximum Cost of attendance less financial aid Generally, cost of attendance less financial aid
Aggregate maximum None Varies by lender
Interest Rate 7.21% fixed rate Varies by lender, credit score, and co-signer status
Fees 4.292% origination fee Varies from 0%-5% for origination and/or repayment fees, according to the lender, student's credit score, and whether the loan is co-signed
Deferment and forbearance In-school deferment and possible 6-month forbearance to align with other Federal Direct subsidized and unsubsidized loans Generally, not available, but some lenders may offer forbearance
Grace period None Varies by lender between 6-9 months
Repayment terms Choice between standard, graduated, extended, and income-contingent terms Varies by lender; sometimes interest-only payments allowed during early years
Repayment period 10-25 years depending on repayment option chosen and amount owed Varies 10-25 years, according to the lender and amount owed
Consolidation Eligible for Federal Direct Consolidation Loans None
Death/disability Discharged, if borrower dies or becomes totally, permanently disabled; endorser not liable for debt Most loans not insured against death or disability
Promissory note Direct loan master promissory note (MPN) covers multiple direct loans up to 10 years Varies by lender