Written By Melanie Lockert
Student loan debt is growing at an alarming rate. Federal loan borrowers owed a total of $1.78 trillion dollars as of Q1 2023. Included in that amount are borrowers who are pursuing a graduate degree program or professional degree.
Getting a master’s degree or higher can mean taking on Grad PLUS Loans, specifically designed for graduate and professional students. Though graduate student loan debt is lower than other loan types, it’s steadily risen over the past few years. In this guide, we’ll break down average graduate student loan debt and provide student loan debt statistics around Grad PLUS Loans.
Overview of Grad PLUS Loans
Going to graduate school can be a big decision, and figuring out how to pay for it can be just as weighty. The U.S. Department of Education offers Grad PLUS Loans as a solution. These loans can help cover the cost of attendance — and unlike Direct Unsubsidized Loans, which are also available to graduate students — have no loan limit.
Grad PLUS Loans differ from other federal student aid options as they require a credit check or an endorser to qualify. They also come with the highest interest rates among all federal loan options, increasing the total cost of debt on each loan balance.
Outstanding Grad PLUS Loan amounts and borrowers
The Federal Student Aid website distributes student loan debt data on a regular basis. Based on this data, as of Q1 2023, the total outstanding balance for Grad PLUS Loans stood at $96.7 billion dollars.
Although that’s a much smaller figure than the outstanding balance for Stafford Unsubsidized Loans during the same period — which stood at $574.1 billion dollars — it’s doubled since the beginning of 2016. As of Q1 2016, the outstanding balances for Grad PLUS Loans stood at $46.6 billion, and in just seven years, it’s elevated to $96.7 billion dollars.
To see how Grad PLUS Loan balances have grown over the years, here’s a breakdown of loan balances since 2014.
The total number of students taking out Grad PLUS loans has grown significantly, as well. Here are the totals for each quarter since 2014.
Based on the data above, you can see a steady increase in Grad PLUS Loans over the past eight years. Although the numbers fluctuated as borrowers pay off their student debt, it’s been on an upward trend.
Average graduate student loan debt
Above, you see the raw data of total loan balances for Grad PLUS Loans and how many borrowers. When taking the outstanding balances and dividing it by the number of borrowers, you can get an idea of the average graduate student loan debt for Grad PLUS Loan borrowers.
Below, the average graduate student loan debt is based on Q4 of each year or the most recent data published (as 2023 currently only has Q1).
As of Q3 2022, the average graduate student loan debt for Grad PLUS borrowers is $59,313. It’s important to note that this is just one part of the picture when it comes to graduate student loans. This doesn’t include Direct Unsubsidized Loans, which graduate students might have, nor does it include private student loans.
Graduate PLUS Loan borrowers tend to borrow more than other loan holders. According to the November 2021 report, “Student Debt and the Federal Budget” by the Bipartisan Policy Center:
“Graduate student lending has increased substantially since Grad PLUS Loans became available in 2006. During the 2019-20 academic year, the average Grad PLUS borrower took out $26,748 in loans, compared to $17,915 under the Parent PLUS Loan program and $9,113 under the Direct Loan program (in constant 2020 dollars).”
And that’s for a single academic year, whereas many doctorate degrees or master’s degrees require multiple years of school. With this in mind, the higher average Grad PLUS Loan figures in the chart above make sense.
Interest rates over time for Grad PLUS Loans
Out of the various federal student loan options available, PLUS Loans come with the highest rates. These rates shifted over time and are based on a complex formula that aligns with the high yield of 10-year Treasury Notes, plus a specific percentage based on the type of federal loan.
| Disbursement period | Fixed rate for Grad PLUS Loans |
|---|---|
| July 1, 2022 to June 30, 2023 | 7.54% |
| July 1, 2021 to June 30, 2022 | 6.28% |
| July 1, 2020 to June 30, 2021 | 5.30% |
| July 1, 2019 to June 30, 2020 | 7.08% |
| July 1, 2018 to June 30, 2019 | 7.6% |
| July 1, 2017 to June 30, 2018 | 7% |
| July 1, 2016 to June 30, 2017 | 6.31% |
| July 1, 2015 to June 30, 2016 | 6.84% |
| July 1, 2014 to June 30, 2015 | 7.21% |
| July 1, 2013 to June 30, 2014 | 6.41% |
| July 1, 2006 to June 30, 2013 | 7.9% |
Though the rates on Grad PLUS Loans are several percentage points higher than other federal loans, there’s a cap put in place. The cap for PLUS Loans is 10.5%, based on what’s outlined in the Higher Education Act (HEA). Aside from these interest rates, there's also an origination fee which is 4.228% as of October 2022.
Profile of a Graduate PLUS borrower
The latest Government Accountability Office (GAO) report outlined some of the top findings around Grad PLUS Loan borrowers. Here are some notable Grad PLUS statistics:
- The median federal loan debt for Grad PLUS borrowers was $140,000, which included PLUS Loans, other graduate student loans, and undergraduate student loans).
- Out of that amount, approximately $27,000 was from Grad PLUS Loans.
- The top degree types of Grad PLUS Loan borrowers included master’s degrees and doctoral degrees for professional practices.
- Nearly all Grad PLUS Loan borrowers have also borrowed other types of federal loans (99.9%).
Education background
Grad PLUS Loans are only available to specific graduate students who qualify. Based on the GAO report, here’s the breakdown of degree types.
| Degree type | Percent |
|---|---|
| Master's degree | 49% |
| Doctoral Degree for Professional Practices | 43% |
| Doctoral Degree – research-based | 4% |
Repayment plans, forgiveness, and default
When it comes to repayment options, Grad PLUS Loan borrowers stuck to the shortest repayment term. Here’s what the GAO report found:
- The bulk of Grad PLUS Loan borrowers opted for a Standard Repayment Plan, which sets monthly payments at 10 years.
- 36% of Grad PLUS Loan borrowers opted for an Income-Driven Repayment Plan, which establishes affordable student loan payments at 10% to 15% of discretionary income.
- Eleven percent of Grad PLUS Loan borrowers were deemed eligible for student loan forgiveness through the Public Service Loan Forgiveness Program (PSLF).
- Two percent of Grad PLUS borrowers had defaulted.
The bottom line
Grad PLUS Loans are unique since they’re only available to borrowers pursuing graduate or professional studies, and have no borrowing cap. These loans can cost a premium with steep rates and origination fees. Some borrowers might look into student loan refinancing for a better rate, but should consider the cost of missing out on forgiveness and other federal benefits.
If you need help with your Grad PLUS Loans, book a consultation with Student Loan Planner.
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