MBA Finances

Federal Loans FAQ's

Can I decline the Direct Subsidized/Unsubsidized Loan and only take the Grad PLUS?

Yes. However, Direct Subsidized/Unsubsidized Loans do have some distinct advantages over Direct PLUS Loans.

• Loan Fee: The Direct Subsidized/Unsubsidized Loans have a fee of 1.5% (the actual fee is 3.0%, however Direct Loans provide an up-front 1.5% rebate at disbursement), whereas the Grad PLUS Loan has a fee of 2.5% (again, the actual fee is 4.0%, however there is the same up-front rebate of 1.5% at disbursement).
• Interest Rate: The Direct Subsidized/Unsubsidized Loans have a fixed interest rate of 6.8%. This is lower than the 7.9% fixed interest rate for the Grad PLUS Loan.
• Interest Accrual: The Direct Subsidized Loan does not accrue any interest while you are enrolled at least half-time (6 units), or during grace and deferment periods (students are responsible for interest on the Unsubsidized Loan at all times). The Grad PLUS loan is similar to the Unsubsidized Loan in that the student/borrwer is responsible for interest at all times.
• Grace Period: The Direct Subsidized/Unsubsidized Loans have a 6-month grace period after you graduate or drop below half-time status (6 units), during which you are not required to make payments. The Grad PLUS Loan does not have a grace period.