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While
all Graduate PLUS loans are governed by the same
interest rates, lenders differentiate their loans by
offering different front end and back end
benefits.
Front
end benefits
typically include a reduction in the interest rate
at disbursement and/or a reduction of the fees that
borrowers must pay to obtain the loan.
They are called front end benefits because
you receive the value of the benefit from the first
disbursement of the loan and the benefit remains
throughout the life of the loan.
Back
end benefits
can include interest rate reductions for a specific
number of on-time payments; principle reduction or
credit or a specific number of on-time payments;
and/or interest rate reduction for use of auto-debit
(ACH) payments.
Back end benefits are not guaranteed and
depend upon borrower behavior such as making on-time
payments. These
benefits may be revoked or eliminated if the
borrower does not continue the desired behavior (for
example, a single late payment can revoke many back
end benefits).
It
is important that you check with your lender to make
sure that you understand the terms and conditions of
your chosen loan program.
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