Grad PLUS loans vs. private student loans

With Grad PLUS elimination creating a significant funding gap, private student loans become the most practical solution for covering costs beyond federal loan limits. Private loans let you borrow up to your cost of attendance, similar to how Grad PLUS loans previously functioned.

Private student loans differ from federal loans in several ways:

Evaluation approach: Private lenders typically evaluate your credit profile, income potential and program of study rather than just checking for adverse credit history. Graduate students in high-ROI programs like STEM, business or medicine often qualify for competitive rates.

Interest rates and fees: Rates vary by lender and borrower profile. Some private lenders offer rates starting around 9.99% to 14% with origination fees ranging from 0% to 5%, compared to Grad PLUS’s uniform 8.94% rate plus 4.228% origination fee. Your total borrowing cost depends on your qualification profile. Read more about How Grad PLUS rates compare to private loans. 

Repayment flexibility: Federal loans offer income-driven repayment and potential loan forgiveness through programs like Public Service Loan Forgiveness. Most private loans use standard, graduated or extended repayment plans without income-driven options. Consider your career plans when weighing this trade-off.

Cosigner requirements: While Grad PLUS loans didn’t require cosigners (only endorsers if you had adverse credit), some private lenders require cosigners for graduate students without established U.S. credit history or steady income. Other private lenders evaluate students based on future earning potential rather than requiring cosigners.

The practical reality: If your program costs exceed the $20,500 federal limit, you need additional funding. Private student loans provide that funding in amounts similar to what Grad PLUS previously offered, often with competitive total costs for qualified borrowers.

MPOWER Financing’s private student loans are designed specifically to address the funding gap that Grad PLUS elimination creates for graduate students. The evaluation approach focuses on future potential rather than requiring extensive U.S. credit history or cosigners.

How MPOWER Financing works for graduate students:

MPOWER evaluates your application based on your university, program of study and career trajectory rather than just credit score. Graduate students in STEM programs, business degrees and health professional programs at MPOWER-eligible schools can often qualify for competitive rates even without established U.S. credit history.

The loans cover $2,001 up to $100,000, letting you bridge the gap between federal loan limits and your actual program costs. If your program costs $60,000 annually and you receive $20,500 in federal loans, MPOWER can provide the remaining $39,500 in private loan funding.

Fixed interest rates starting at 9.99% (9.99% APR)* provide payment stability similar to federal loans. The rate includes a 0.25% discount for enrolling in automatic payments and never increases over the life of your loan.

Risk-based origination fees (0% to 5%): Qualified borrowers often pay lower origination fees than Grad PLUS’s uniform 4.228%. Your specific fee depends on your academic profile, program and university.

No cosigner required: The evaluation considers your future earning potential, eliminating the need for a cosigner even if you don’t have extensive U.S. credit history.

No prepayment penalty: Pay off your loan early without penalty to reduce total interest costs.

Program flexibility: MPOWER supports full-time and part-time programs, including online and hybrid formats, at 500+ eligible U.S. universities.

Understanding how private loans compare to the previous Grad PLUS option helps you make informed borrowing decisions for your graduate program.

*Includes 0.25% discount for automatic payments. Subject to credit approval.