Graduate degree holders earn as much as $24,000 more per year than workers who have only a bachelor’s degree, we found in a recent study.
Whether you’re interested in getting an advanced degree to earn more money, switch career trajectories, follow your passions or all of the above, chances are your investment in grad school will pay off.
But to get the best return on that investment, you’ll want to limit your graduate school loans and borrowing costs. This means choosing low-cost grad school loans with the right features and terms to meet your needs.
Here’s how you can get started, along with the best loans for graduate school available today.
4 factors you should look for in graduate school loans
Whether your goal is to keep your debt manageable while you’re enrolled or to pay off your student loans as quickly as possible, you’ll want to choose grad school loans that work with your priorities. These could be private loans or federal loans (discussed below).
The best grad school loans offer low interest rates and fees, as well as flexible options that allow you to borrow and repay how you want. As you’re shopping around for loans for graduate school, pay close attention to the following features:
1. Low rates and fees
Graduate students borrow $13,151 per year on average, according to Sallie Mae’s 2017 “How America Pays for Graduate School” report. That’s three times the amount undergraduates typically borrow.
Because student loan balances are so high, every bit you can save from lower interest rates and fees helps. Follow these tips to find the most cost-effective grad school loans:
- Watch for charges such as origination fees and application fees, which aren’t always advertised as openly as some of the more beneficial loan features.
- Pay attention to advertised rates on student loans for graduate school. Keep in mind that advertised rates are the best the lender offers, so unless you have perfect credit, you’ll usually pay more. Check the fine print on advertised rates that can alert you to discounts that might be baked into these comparisons as well.
- Collect rate quotes from lenders — they generally use soft credit checks for this to avoid dinging your credit. You’ll get offers for graduate school loans tailored specifically to you, and you can compare them to see which one carries the lowest costs.
2. Multiple repayment options
Another feature to watch for is the option to modify payments while you’re in school. Federal student loans and many private grad school loans allow you to pay a smaller amount each month while you’re enrolled or to defer payment completely.
The best loans for graduate school will offer two or more repayment options, allowing you to select the one that’s best for you.
3. Graduate school loan amounts
A lender will be a poor fit if its graduate student loans don’t meet your needs. Check minimum and maximum loan amounts to be sure you can get the full amount you need to pay for your educational expenses.
4. Terms on loans for graduate school
The most common student loan term is 10 years. If you want to borrow for a shorter or longer period, you’ll have to check the range of terms each lender offers.
Your student loan term has a big effect on your monthly payments. The longer your loan term, the less you’ll pay each month. If you’re borrowing a high balance, for instance, see if the lender can help keep payments affordable with a loan term that’s longer than 10 years. Keep in mind, however, that a longer loan term means you’ll pay significantly more in interest.
On the other hand, if you’re not borrowing much or are expecting to earn a lot after graduation, you might benefit more from a five-year loan term. This shorter term will get you out of debt faster and, more importantly, will likely come with a lower student loan rate.
4 best private grad school loans
The process of finding the best graduate school loans — at least in terms of private loans — starts with familiarizing yourself with the lenders that offer them. From there, you can begin comparing grad school loans based on rates, fees and other terms that are important to you.
Kick off your search with the four lenders below. After vetting many products, we found these four that were competitive in the criteria listed above.
1. Citizens Bank Graduate Student Loan
- Citizens Bank offers fixed-rate and variable-rate student loans
- Graduate student loan rate discount of 0.25% for autopay enrollment
- Loyalty discount of 0.25% for borrowers with another Citizens Bank account
- No origination fee or prepayment penalty
- Loan terms of 5, 10, and 15 years
- Loan amounts up to the cost of attendance or $150,000, whichever is lower
- 3 in-school repayment options: full deferment, interest-only payments, and immediate principal and interest payments
- Multiyear approval to easily borrow in the future
- Option to add a cosigner to secure approval or lower rates
- Cosigner release after 3 years of on-time payments
- Program-specific grad school loans for MBA, law and health care students
2. College Ave Graduate Student Loan
- College Ave offers fixed-rate and variable-rate student loans
- 0.25% interest rate discount for enrolling in autopay
- No student loan origination fee or prepayment penalty
- Loan terms of 5, 8, 10 and 15 years
- Grad school loans from $1,000 up to the cost of attendance
- 4 in-school repayment options: full deferment, flat $25 monthly payments, interest-only payments and full principal and interest payments
- Option to add a cosigner to your College Ave student loan
- Prequalification tool that delivers rate estimates without affecting your credit
3. Sallie Mae Graduate Student Loan
- Sallie Mae offers fixed-rate and variable-rate student loans
- 0.25% rate discount for enrolling in autopay
- No grad school loan origination fee or prepayment penalty
- Sallie Mae student loan term of 15 years
- Loan amounts from $1,000 up to the full cost of attendance
- 3 repayment options for in-school borrowers: full deferment, fixed $25 monthly payments and interest-only payments
- Optional interest-only payments for an additional 12 months after leaving graduate school
- Option to add a cosigner to graduate student loans
4. CommonBond Graduate Student Loan
- CommonBond offers fixed-rate and variable-rate student loans
- Interest rate discount of 0.25% for setting up automatic payments
- Loan origination fee of 2% and no prepayment penalty
- CommonBond student loan terms of 5, 10, and 15 years
- Loan amounts from $2,000 up to the full cost of attendance
- 4 in-school repayment options: full deferment, fixed $25 monthly payments, interest-only payments, and full principal and interest payments
- Requirement to apply with cosigner
- Cosigner release after 2 years of payments
- Forbearance for financial hardship in repayment
Should you use private student loans for graduate school?
We highlighted the best private lenders offering graduate school loans above, but they aren’t your only options for financing your advanced degree.
- Direct unsubsidized loans for graduate students: 6.60% interest rate with 1.062% loan fee
- Grad PLUS Loans: 7.60% interest rate with 4.248% loan fee
Because graduate students face some of the highest federal student loan rates, they have an opportunity to save by choosing private grad school loans.
Which option is more cost-effective for you? Find out by getting a few student loan offers and comparing the quoted rates to what you’d pay on a federal student loan for graduate school.
Here are some additional considerations when you’re deciding between private and federal grad school loans:
- Your credit: Private student loans are an option only if you have good enough credit to qualify or have a creditworthy cosigner. If you don’t, federal graduate school loans might be more accessible.
- Borrower protections: If you want a strong safety net, federal grad school loans make sense. Federal student loans offer full in-school deferment of student loans, as well as several repayment options, including forbearance and Income-Driven Repayment plans.
Before considering any student loans, however, make sure you prioritize scholarships and grants for grad school in order to limit your grad school loans as much as possible.
It can feel intimidating to figure out how to pay for grad school, but the time and effort you put in now to apply for scholarships and grants could pay off for years to come.
Andrew Pentis contributed to this report.
The information in this article is accurate as of the date of publishing.
Need a student loan?Here are our top student loan lenders of 2019!
|1 Important Disclosures for Ascent.
Before taking out private student loans, you should explore and compare all financial aid alternatives, including grants, scholarships, and federal student loans and consider your future monthly payments and income. Applying with a cosigner may improve your chance of getting approved and could help you qualify for a lower interest rate. Ascent Student Loans may be funded by Richland State Bank (RSB). Ascent Student Loan products are subject to credit qualification, completion of a loan application, verification of application information and certification of loan amount by a participating school. Loan products may not be available in certain jurisdictions, and certain restrictions, limitations; and terms and conditions may apply. Ascent is a federally registered trademark of Turnstile Capital Management (TCM) and may be used by RSB under limited license. Richland State Bank is a federally registered service mark of Richland State Bank.
* Application times vary depending on the applicants ability to supply the necessary information for submission.
2 Important Disclosures for CollegeAve.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
Information advertised valid as of 2/1/2019. Variable interest rates may increase after consummation.
3 Important Disclosures for Discover.
* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.
4 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
5 Important Disclosures for SunTrust.
Before applying for a private student loan, SunTrust recommends comparing all financial aid alternatives including grants, scholarships, and both federal and private student loans. To view and compare the available features of SunTrust private student loans, visit https://www.suntrust.com/loans/student-loans/private.
Certain restrictions and limitations may apply. SunTrust Bank reserves the right to change or discontinue this loan program without notice. Availability of all loan programs is subject to approval under the SunTrust credit policy and other criteria and may not be available in certain jurisdictions.
SunTrust Bank, Member FDIC. ©2019 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved.
6 Important Disclosures for LendKey.
Additional terms and conditions apply. For more details see LendKey
7 Important Disclosures for CommonBond.
A government loan is made according to rules set by the U.S. Department of Education. Government loans have fixed interest rates, meaning that the interest rate on a government loan will never go up or down.
Government loans also permit borrowers in financial trouble to use certain options, such as income-based repayment, which may help some borrowers. Depending on the type of loan that you have, the government may discharge your loan if you die or become permanently disabled.
Depending on what type of government loan that you have, you may be eligible for loan forgiveness in exchange for performing certain types of public service. If you are an active-duty service member and you obtained your government loan before you were called to active duty, you are entitled to interest rate and repayment benefits for your loan.
A private student loan is not a government loan and is not regulated by the Department of Education. A private student loan is instead regulated like other consumer loans under both state and federal law and by the terms of the promissory note with your lender.
If your private student loan has a fixed interest rate, then that rate will never go up or down. If your private student loan has a variable interest rate, then that rate will vary depending on an index rate disclosed in your application. If the interest rate on the new private student loan is less than the interest rate on your government loans, your payments will be less if you refinance.
If you don’t pay a private student loan as agreed, the lender can refer your loan to a collection agency or sue you for the unpaid amount.
Remember also that like government loans, most private loans cannot be discharged if you file bankruptcy unless you can demonstrate that repayment of the loan would cause you an undue hardship. In most bankruptcy courts, proving undue hardship is very difficult for most borrowers.
8 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|4.23% – 13.23%1||Undergraduate and Graduate|
|4.20% – 11.44%2||Undergraduate, Graduate, and Parents|
|4.84% – 13.49%3||Undergraduate and Graduate|
|4.50% – 10.11%*,4||Undergraduate and Graduate|
|4.25% – 13.25%5||Undergraduate and Graduate|
|5.85% – 6.99%6||Undergraduate and Graduate|
|3.95% – 9.81%7||Undergraduate, Graduate, and Parents|
|4.45% – 12.42%8||Undergraduate, Graduate, and Parents|