Federal Loans for Graduate Students

Federal Direct Loans Make Graduate School Possible

Graduate students often receive help with graduate school expenses through government and private education loans, which all must be repaid. IU South Bend graduate students may be eligible for a Federal Direct Loan and/or a Federal Direct PLUS Loan. However, those who do not qualify for a federal loan should consider applying for an alternative loan through a private lending institution.

The first step before applying for either a federal loan or a private alternative loan is to complete a Free Application for Federal Student Aid (FAFSA).

About Federal Loans

Federal loans must be requested through FAFSA. There are two types of loans available to graduate students at IU South Bend – Federal Direct Unsubsidized Loan and the Federal Direct PLUS Loan.

Both Federal Direct Loans – The graduate student is expected to pay the interest while enrolled in school or have it capitalized. To be eligible, the student must be enrolled at least half-time (4 credit hours or more) and meeting Satisfactory Academic Progress.

When a graduate student accepts a Federal Direct Loan, he or she is borrowing from the federal government.

Direct Loan Student Rights and Responsibilities

How Federal Funds Are Applied to a Graduate Student’s Account

Once the student has applied for the FAFSA and when applicable, Federal Grad PLUS Loan and are approved, the financial aid office will determine the student’s eligibility amount and assigns the aid to the student’s financial aid account. The student must complete the Federal Entrance Counseling and Master Promissory Note.

About Student Alternative Private Loans

Private lending institutions, such as banks and credit unions, also provide graduate student loans, which are limited by the Cost of Attendance and are based on the students credit history. Generally, Federal Direct Loans are applied for first since they may be more favorable due to their repayment terms and interest rates. Private loan sources are a way to supplement federal student aid, if needed.

Before applying for a private loan, we require students to meet with an IU South Bend Financial Aid Representative to discuss their loan options.

Federal Direct Graduate PLUS Loan

If you’re financing your own graduate education, the Federal Direct Graduate PLUS Loan allowed eligible students to borrow up to the cost of attendance minus other financial aid received.

Graduate PLUS Loans will no longer be available to new borrowers beginning July 1, 2026. Students who borrowed a Federal Direct Loan for their current graduate or professional program prior to July 1, 2026 may qualify as legacy borrowers and continue borrowing under prior program rules, provided they remain eligible.

Graduate and professional students who are not considered legacy borrowers should review their annual Direct Unsubsidized Loan eligibility and plan ahead for any remaining educational expenses. Additional funding options may include institutional payment plans, scholarships, employer tuition benefits, or private education loans.

Graduate students apply for the loan here. Please read the information on the Grad Plus Loan FAQ for more details.

Eligibility

To qualify prior to July 1, 2026, or as a legacy borrower after that date, you must be enrolled at least half-time in a degree-granting graduate or professional program at IU Indianapolis and meet federal credit and eligibility requirements.

See eligibility requirements for students

Repayment

Payments are automatically deferred while you are enrolled at least half time. Repayment begins six months after you graduate or drop below half-time enrollment.

Changes to Graduate PLUS Loans

Beginning July 1, 2026, Federal Direct Graduate PLUS Loans will no longer be available to new borrowers. Students who borrowed any Federal Direct Loan, including Direct Unsubsidized or Grad PLUS, for their current graduate or professional program prior to July 1, 2026 may qualify as legacy borrowers.

Legacy borrowers may continue to borrow Grad PLUS Loans under existing program requirements for up to three additional academic years or until they complete their program, whichever comes first, provided they remain eligible. Students who do not meet legacy borrower criteria should explore other federal loan options, private loans, or alternative funding resources to cover remaining educational costs.