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A GradPLUS loan is a government guaranteed alternative loan that provides funds
up to the Cost of Attendance for Graduate and Professional students. This loan
is not based on need and carries a fixed interest rate of 8.5%. You should
exhaust all Federal Stafford loan eligibility before applying for a GradPLUS
loan.
If you decide not to maximize your Stafford Loan eligibility before taking
a GradPLUS loan, you will be asked to review and initial the
Federal Loan Comparison Chart for Graduate and
Professional Students indicating that you understand the difference in
the loan terms between the Stafford and GradPLUS loans. This
acknowledgement by the borrower is a new Federal Regulatory requirement.
GradPLUS Entrance Counseling is another new Federal Regulation for
2008-2009. If you are a first-time GradPLUS borrower this year, you must
complete GradPLUS Entrance Counseling. You can use
this link
to begin your GradPLUS Entrance Counseling. The University cannot disburse your
loan proceeds until this requirement has been met.
The GradPLUS loan must be renewed each year and loan approval is based on a
favorable credit report. If you apply on-line through a lender’s website, the
credit check is normally run prior to completing the GradPLUS Master Promissory
Note (MPN). Your Graduate School Representative can help you determine the
amount you need to borrow.
It is important to note that the GradPLUS loan carries a 3% origination fee
that cannot be waived by the lender due to Federal regulation. This loan goes
into repayment after the second disbursement. Most lenders will put the loan
into deferment until graduation. You should contact your lender to make sure
you clearly understand what your rights and responsibilities are regarding
repayment since there is no grace period.
In an effort to assist students and families with lender choices, Washington
University has compiled, through a formal evaluation process, a list of lenders
we consider to offer competitive products, solid customer service, electronic
payment of loan funds and a variety of savings programs during loan repayment.
The criteria used to evaluate lenders, in order of importance, were:
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Competitive Loan Products
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Loan Repayment Benefits
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Payment of Origination Fees
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Loan Forgiveness Programs
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Customer Service
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Life of Loan Servicing
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Code of Conduct Policy
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Call Center Availability / Staffing
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On-line Services for Students
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Default Prevention
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Cohort Default Rate
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Financial Literacy Programs for Students
Please note that you are not required to use any of these lenders — the choice
of lender is yours. We will process your loan with any lender you choose.
Further, the list of lenders is not in any order of preference.
There have been many changes in the student loan industry. As a student loan
borrower, you need to understand what you need to do in order to prepare for
the 2008-2009 academic year.
There are two contributing factors to the changes we are seeing. One factor is
the passage of the College Cost Reduction and Access Act (CCRA) on October 1, 2007.
The CCRA increased the fees that lenders pay to participate in the Federal Family
Education Loan Program (FFELP) and reduced the subsidies lenders receive for
participating in the FFEL program. The second factor is the current “credit crunch”
in the financial markets caused by the sub-prime mortgage lending issue. Overall,
lending institutions are experiencing higher costs for funds used to provide loans
of all types – including Federal Stafford and Grad PLUS loans.
Recently, the Department of Education announced a plan to help lenders
get the funding they need to provide students with Federal loans for the upcoming academic
year. However, lenders who utilize this option have had to change their repayment benefits.
As a result of so many changes being made to borrower benefits
offered by each lender, we believe it is in your best interest to carefully evaluate your
borrower relationship with a Stafford Loan lender and/or Grad PLUS lender of your choice.
We are asking all students who plan to enroll in classes this summer and/or the upcoming
academic year to take the following steps:
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Do some research. Find out what lenders are
providing. You may refer to the Repayment Benefits Chart to see what benefits the
lenders on our list are offering.As always, you are welcome to use any lender you
choose even if they do not appear on the lender chart.
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Contact your lender to inquire about the current
benefits they are offering. You can find your Grad PLUS lender
information at
https://www.nslds.ed.gov/nslds_SA/. You will be required to establish an ID and PIN,
but this helpful resource tracks the status of all Federal loans from loan
origination through repayment.
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Choose a lender for your 2008-2009 Grad PLUS Loan.
Familiarize yourself with the lender’s Web site, and prepare to complete the necessary
requirements to apply for your student loan online.
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Take Action:Go to the lender’s website
and complete a new MPN with that lender.
These lenders provided assurance to the University and to student and parent
borrowers that the advertised benefits upon repayment will continue to inure
to the benefit of the student and parent borrowers regardless of whether the
lender's loans are sold. Note: Clicking on these links will take you from the
Washington University web site and redirect you to the lender's web site.
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