When applying for a GradPLUS loan you will need to indicate the total amount you want to borrow for the entire academic year since funds are disbursed in two equal amounts at the beginning of each term. GradPLUS loans have a 4.276% loan fee that is deducted from the total loan amount prior to disbursement, therefore, you will want to consider whether or not you should increase your loan request by the amount of this fee in order to net a certain amount of money. We will automatically add the 4.276% fee amount to your student budget when we process your GradPLUS loan request. If you decide, at a later date, that you would like to reduce the overall loan amount, you may do so by contacting our office or completing the loan adjustment form.
When determining the amount for which you’d like to apply, it is important to consider what impact the fee deduction will have on your net loan disbursement amount because we are required, by federal regulations, to process your loan for the exact amount you request. If you do not incorporate the fee into your loan request, the net amount that is disbursed to your student account may be less than what you expected to receive.
On the GradPLUS application (link below), there are three loan amount request options. Please read the instructions for each option carefully:
- First Option: “Borrow the maximum amount”. You may choose to borrow the maximum amount. If you choose this option we will process your loan for the difference between your student budget and all other financial aid. We will automatically add the 4.276% fee to your maximum loan amount and increase your budget to account for the additional fee.
- For example: if your Student Budget is $92,200 and you are receiving $20,500 in financial aid (a Direct Stafford Loan), you will have room in your budget for a loan of $71,700 ($92,200 minus $20,500 = $71,700). By clicking on this first option, you do not need to do any math since we will automatically process your loan for an amount that includes the 4.276% fee (or $71,700 plus fees).
- In this example your gross loan amount will be $74,884 ($71,700 maximum loan amount divided by 0.95724 = $74,903) This will mean a total loan disbursement of $71,700, or $35,850 per semester, to your student account. Your budget would be increased by $3,203 for the loan fees.
- Second Option: “Specify an amount”. You may specify the amount you want to borrow within the limit of your student budget minus all other financial aid. When choosing this option we will automatically increase your student budget for the amount of fees that will be deducted from the total loan amount requested, however, we cannot automatically add the loan fees to your requested loan amount. We must process the loan for the exact amount you specify. If choosing this option you will first want to determine the net amount of the loan that will be disbursed. The net amount is the amount after the loan fees have been deducted.
- For example: HLS Grant recipients are required to borrow the minimum base loan of $49,800 of which $23,000 will need to come from a supplemental loan program (either GradPLUS or a Private Student Loan). Choosing “Specify and amount” will require an HLS grant recipient to enter at least $23,000 (or a higher amount as long as the total net aid does not exceed your student budget).
- Additionally, you will need to decide if you want to increase this amount for the 4.276% fee that will be deducted from the loan prior to disbursement. If not, then you will request exactly $23,000. We will process the loan for $23,000 HOWEVER, your loan disbursement for the year will total $22,022 (or $11,011 per semester).
- If you want to increase the loan to account for the 4.276% fee, you would divide $23,000 by 0.95724 for a loan amount of $24,027 and a disbursement of $23,000 (or $11,500 per semester).
- Third Option: “Don’t know the amount I want to borrow”. You should NEVER choose this option since it will cause significant delays in processing your loan. Instead, call our office at (617) 495-4606 or email firstname.lastname@example.org with any questions you have about the loan amount.