Trends and Issues

PLUS or minus: Including the new Grad PLUS in your federal student aid programs

Since the passage of the Higher Education Reconciliation Act of 2005 (HERA), schools have been weighing the pros and cons of participating in the new Grad PLUS program. Schools not currently participating in the PLUS loan program may be interested in offering this loan option to their graduate and professional students. Conversely, schools currently offering PLUS loans to the parents of their dependent undergraduate students may be unsure about awarding Grad PLUS loans to eligible students at their institutions.

Schools not currently participating in PLUS
A school that wishes to offer PLUS loans, but is not currently approved to participate in the PLUS loan program, must update its existing Program Participation Agreement (PPA). A school may update its PPA online through ED's E-app, available at www.eligcert.ed.gov/ (question 37 on the E-App allows a school to request changes to its Federal Student Aid [FSA] program eligibility). Be aware that a school approved to participate in the PLUS loan program must offer PLUS loans to eligible parent borrowers as well as its graduate and/or professional students, if applicable.

According to the Federal Student Aid Handbook (FSA Handbook), page 2-64, when requesting an addition to its FSA programs, a school must complete the E-App and then wait for written approval before disbursing funds under the program which the school is requesting to add. Given the processing time involved in updating a PPA, a school wanting to add PLUS to its FSA programs is advised to begin this process as soon as possible. Please note that approvals from the school's accrediting agency and state authorizing agency are not required for this change.

Schools currently participating in PLUS
A school currently approved to participate in the PLUS loan program may award Grad PLUS loans without updating its PPA. However, some schools who are already participating in the PLUS program have expressed concerns about offering Grad PLUS loans to their students.

It is important to remember that Grad PLUS is not a new program that a school currently participating in the PLUS loan program may choose to opt out of; it is instead an extension of the existing PLUS loan program. Just as a school applying to add PLUS to its PPA must offer both Grad PLUS and parent PLUS loans, if applicable, a school currently offering PLUS loans to parent borrowers must offer them to its graduate and/or professional students, if applicable. A school wishing to discontinue its participation in the PLUS loan program may do so by updating its E-App, as discussed above.

More information
More information about the E-App and PPA process is available in the FSA Handbook, volume 2, chapter 2. For questions about participation in the PLUS loan program, contact Charles Kracy of TG's compliance administrative operations at (800) 252-9743, ext. 4877, or send an e-mail message to charles.kracy@tgslc.org.

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