Grad PLUS is a federal loan available to graduate and professional students that can be used to cover any cost of attendance not met by other aid, including Direct Unsubsidized Loans.
What it means in plain English
The Grad PLUS Loan is a credit-based federal loan made directly by the Department of Education to graduate students. Unlike Direct Unsubsidized Loans, there is no annual or aggregate borrowing limit beyond the school's cost of attendance, which makes Grad PLUS the typical funding source for the gap between the $20,500 annual unsubsidized cap and an NP program's full sticker price.
Grad PLUS interest rates are reset every July 1 and apply to all loans disbursed in that academic year. For loans disbursed July 1, 2025 through June 30, 2026, the rate is 9.08%, with a 4.228% origination fee deducted from each disbursement.
Grad PLUS qualifies for every federal benefit: SAVE, PAYE, IBR, PSLF, deferment, forbearance, and forgiveness. It also qualifies for refinancing through private lenders if you decide PSLF is not your path.
Why it matters for NP students
For an NP program with $50,000 to $80,000 annual cost of attendance, the $20,500 unsubsidized cap leaves a $30,000-plus gap each year. Grad PLUS is generally the cheapest way to close that gap if you intend to pursue PSLF.
If you do not plan to pursue PSLF, Grad PLUS becomes more questionable. The 9.08% rate is higher than most private graduate loans for borrowers with strong credit, and the 4.228% origination fee adds the equivalent of another half a percent of effective rate over the loan's life.
Recent OBBBA reform proposals have targeted Grad PLUS for elimination or annual caps. Borrowers entering programs in 2026 should expect changes within their repayment window and budget accordingly.
How it actually works
The math behind Graduate PLUS Loan is more concrete than most borrowers realize. Here's a worked example using current 2026 numbers.
Common pitfalls
- Borrowing more than you actually need because the cap is just cost of attendance.
- Forgetting the origination fee, which silently increases your real cost.
- Refinancing Grad PLUS into private debt while still working at a 501(c)(3), you lose all PSLF eligibility forever on those balances.
- Treating Grad PLUS as identical to Direct Unsubsidized for credit/eligibility purposes, Grad PLUS requires a credit check and rejects borrowers with adverse credit history.
- Skipping the entrance counseling, which is required and includes useful payment estimates.
Related terms
Helpful tools
Run the numbers on your specific situation with these calculators and matching tools.