How to Get a Loan for Graduate School: 4 Excellent Options

 April 11, 2020
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If you’re one of the more than three million students pursuing an advanced degree this year, you might be wondering how to get a loan for graduate school. While you don’t want to take on too much debt, a manageable loan could help you cover costs until you graduate and start your career.

If you’re looking to take out loans for grad school, read on for our listing of the four best options — specifically:

1. Direct Unsubsidized Loans
2. Grad PLUS Loans
3. Private student loans
4. Student loans from your school’s credit union
Plus: Loans for grad school that won’t break the bank

How to get a loan for graduate school

As a graduate student, you could be eligible for a student loan from the federal government, a private lender or your own school, especially if it has its own credit union. Below are your four best options for borrowing graduate student loans that work for your budget.

1. Direct Unsubsidized Loans

Just as it does for undergraduates, the Department of Education (ED) offers federal student loans to grad students. The loan limits tend to be higher, but unfortunately, so are the interest rates. To qualify for these federal graduate student loans, you’ll need to submit the FAFSA first.

Once you do, you’ll be able to borrow Direct unsubsidized loans from the ED. Since these loans aren’t based on need, you aren’t required to demonstrate financial hardship to qualify. Beyond meeting citizenship requirements, all you really need to do is enroll in school at least half-time.

Your school will decide exactly how much you can borrow in Direct unsubsidized loans. That being said, the government sets an annual limit of $20,500 per year and a lifetime limit of $138,500.

As unsubsidized debt, these graduate school loans collect interest from the date they’re disbursed. They all have a fixed interest rate of 6.6%. Plus, they come with a loan fee of 1.062%.

Since these graduate school loans are federal, they’re eligible for federal repayment plans, like income-driven repayment and deferment. You could also potentially qualify for loan forgiveness, depending on your profession.

2. Grad PLUS Loans

If your Direct unsubsidized loans don’t cover the full cost of grad school, you might consider borrowing a Grad PLUS loan from the federal government. You can borrow up to the cost of attendance of your school, minus any other aid you’ve already received. To date, 1.4 million borrowers have taken out $75.2 billion in Grad PLUS loans.

PLUS loans have a fixed interest rate of 7.08% and an origination fee of 4.236%. Unlike Direct unsubsidized loans, PLUS loans require that the borrower doesn’t have an adverse credit history. If you have poor credit, you might need to apply with a creditworthy endorser.

Beyond submitting the FAFSA, you might have to fill out another application for a PLUS loan. Your school’s financial aid office will tell you how to apply. Before getting the loan, you’ll also sign a PLUS Loan Master Promissory Note agreeing to all the terms.

3. Private student loans

Besides knowing how to get a loan for graduate school from the federal government, it’s also important to learn how to take out loans for grad school from private lenders, such as banks or online lenders. Citizens Bank and College Ave, for example, both lend fixed and variable annual percentage rates (APRs) student loans to people going back to school.

Each private lender sets its own requirements for borrowing a loan. Most look for a steady income and decent credit score. If you don’t qualify, you could try applying with a creditworthy co-signer.

Keep in mind, though, that private lenders aren’t always as flexible as the ED when it comes to repayment. They typically don’t offer income-driven repayment plans, nor do they grant student loan forgiveness.

Before agreeing to a private loan, make sure you read the fine print about repayment. Use a student loan calculator to anticipate your monthly payments and how much you’ll have to spend on interest. And speak with the lender about your options in case you run into financial hardship later.

Private student loans help many students finance an advanced degree — but you should know what you’re getting into before going too much into debt.

If you do decide a private student loan is right for you, make sure to shop around and compare offers from multiple lenders. By doing your due diligence now, you can find your best rate and most flexible repayment terms.

4. Student loans from your school’s credit union

Finally, it’s worth noting that some universities can hook you up with a low-interest loan from their own credit unions. Harvard has its own credit union, for instance, as does UCLA in partnership with other schools.

College-based credit unions tend to have competitive rates and excellent customer service. Speak with your financial aid office to find out whether this option is available to you.

Loans for grad school that won’t break the bank

Going back to school for your master’s or Ph.D. is an investment in your education and career. Hopefully, your degree will pay for itself by increasing your earning potential.

But before taking out graduate student loans, consider the return on investment of your graduate degree. Figure out what your student loan repayment will look like and how you’ll manage it.

Furthermore, explore all your options for graduate school student loans. Look for competitive interest rates, flexible repayment terms or whatever other factors best suit your needs.

With careful planning, you can avoid taking on too much student debt. Then, you can focus on earning your advanced degree and achieving your personal and professional goals.

Need a student loan?

Here are our top student loan lenders of 2022!
LenderVariable APREligibility 
2.49% – 13.85%1Undergraduate
Graduate

Visit College Ave

2.55% – 11.44%2Undergraduate
Graduate

Visit Earnest

3.25% – 13.59%3Undergraduate
Graduate

Visit SallieMae

0.00% – 23.00%4Undergraduate
Graduate

Visit Edly

3.25% – 9.69%6Undergraduate
Graduate

VISIT CITIZENS

N/A6Undergraduate
Graduate

Visit FundingU

* 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.

1 Important Disclosures for College Ave.

CollegeAve Disclosures

College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community 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.

  1. As certified by your school and less any other financial aid you might receive. Minimum $1,000.
     
  2. Rates shown are for the College Ave Undergraduate Loan product and include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
     
  3. This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.

Information advertised valid as of 9/15/2022. Variable interest rates may increase after consummation. Approved interest rate will depend on the creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.


2 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest.

Earnest Disclosures

Actual rate and available repayment terms will vary based on your income. Fixed rates range from 3.47% APR to 13.03% APR (excludes 0.25% Auto Pay discount). Variable rates range from 2.80% APR to 11.69% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. Although the rate will vary after you are approved, it will never exceed 36% (the maximum allowable for this loan). Please note, Earnest Private Student Loans are not available in Nevada. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account. It is important to note that the 0.25% Auto Pay discount is not available while loan payments are deferred.


3 Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.

4 Important Disclosures for Edly.

Edly Disclosures

1. Loan Example:

  • Loans from $5,000 – $20,000
  • Example: $10,000 IBR Loan with a 7% gross income payment percentage for a Senior student making $65,000 annually throughout the life of the loan.
    • Payments deferred for the first 12 months during final year of education.
    • After which, $270 Monthly payment for 12 months.
    • Then $379 Monthly payment for 44 months.
    • Followed by one final payment of $137 for a total of $20,610 paid over the life of the loan.

About this example

The initial payment schedule is set upon receiving final terms and upon confirmation by your school of the loan amount. You may repay this loan at any time by paying an effective APR of 23%. The maximum amount you will pay is $22,500 (not including Late Fees and Returned Check Fees, if any). The maximum number of regularly scheduled payments you will make is 60. You will not pay more than 23% APR. No payment is required if your gross earned income is below $30,000 annually or if you lose your job and cannot find employment.

2. Edly Student IBR Loans are unsecured personal student loans issued by FinWise Bank, a Utah chartered commercial bank, member FDIC. All loans are subject to eligibility criteria and review of creditworthiness and history. Terms and conditions apply.


5 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  • Variable Rate Disclosure: Variable interest rates are based on the 30-day average Secured Overnight Financing Rate (“SOFR”) index, as published by the Federal Reserve Bank of New York. As of September 1, 2022, the 30-day average SOFR index is 2.23%. Variable interest rates will fluctuate over the term of the loan with changes in the SOFR index, and will vary based on applicable terms, level of degree and presence of a co-signer. The maximum variable interest rate is the greater of 21.00% or the prime rate plus 9.00%.
  • Fixed Rate Disclosure: Fixed rate ranges are based on applicable terms, level of degree, and presence of a co-signer.
  • Lowest Rate Disclosure: Lowest rates are only available for the most creditworthy applicants, require a 5-year repayment term, immediate repayment, a graduate or medical degree (where applicable), and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Rates are subject to additional terms and conditions, and are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.

     

    Undergraduate Rate Disclosure: Variable interest rates range from 3.25%-10.35% (3.25% – 9.69% APR). Fixed interest rates range from 4.24% – 10.59% (4.24% – 9.93% APR). 

    Graduate Rate Disclosure: Variable interest rates range from 3.75%-9.90% (3.75% – 9.68% APR). Fixed interest rates range from  5.22% – 10.14% (5.22% – 9.91% APR). 

    Business/Law Rate Disclosure: Variable interest rates range from 3.75%-9.35% (3.75% – 9.16% APR). Fixed interest rates range from 5.20% – 9.59% (5.20% – 9.39% APR).

    Medical/Dental Rate Disclosure: Variable interest rates range from 3.75%-9.02% (3.75% -8.98% APR). Fixed interest rates range from 5.18% – 9.26% (5.18% – 9.22% APR). 

    Parent Loan Rate Disclosure: Variable interest rates range from 3.25%-9.21% (3.25% – 9.21% APR). Fixed interest rates range from 3.96%-9.50% (3.96%-9.50% APR).

    Bar Study Rate Disclosure: Variable interest rates range from 6.58%-11.72% (6.58% – 11.62% APR). Fixed interest rates range from 7.39% – 12.94% (7.40% – 12.82% APR). 

    Medical Residency Rate Disclosure: Variable interest rates range from 5.67%-9.17% (5.67% – 8.76% APR). Fixed interest rates range from 6.99% – 10.49% (6.97% – 10.08% APR).


6 Important Disclosures for Funding U.

Funding U Disclosures

Offered terms are subject to change. Loans are made by Funding University which is a for-profit enterprise. Funding University is not affiliated with the school you are attending or any other learning institution. None of the information contained in Funding University’s website constitutes a recommendation, solicitation or offer by Funding University or its affiliates to buy or sell any securities or other financial instruments or other assets or provide any investment advice or service.