How to Pay For Grad School: 4 Best Options for Graduate Student Loans

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Every year, about 3 million students enter graduate school programs, a number that the National Center for Education Statistics expects to rise to nearly 3.3 million by 2026.

Since most of these grad students are financially independent, they have to find ways to cover the costs of higher education.

If you’re heading to grad school, first look for grants and scholarships that you don’t have to repay (in other words, free money). Once you’ve run out of those, you might need to take out student loans to pay tuition.

Your options for graduate student loans are a little different than the ones you had for undergrad. Read on for all your options.

2 federal options for graduate student loans

Just as it does for undergraduates, the Department of Education (DOE) 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.

Direct Unsubsidized Loans

Just like undergraduate students, grad students can borrow Direct Unsubsidized Loans from the DOE. 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%. Plus, they come with a loan fee of 1.066 percent.

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

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. You can borrow up to the cost of attendance of your school, minus any other aid you’ve already received. As of 2017, 1.1 million borrowers have taken out $56.6 billion in Grad PLUS Loans, according to the Office of Federal Student Aid.

PLUS Loans have a fixed interest rate of 7% and an origination fee of 4.264 percent. Unlike Direct Unsubsidized Loans, PLUS Loans require that the borrower doesn’t have an adverse credit history. If you have low credit, you might need to apply with a creditworthy co-signer.

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.

You can take out private graduate school loans

Besides federal options for graduate student loans, you can also borrow money from private lenders. Citizens Bank and College Ave, for example, both lend fixed- and variable-rate 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 DOE 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.

Some colleges have credit unions that grant loans

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 the California State University system.

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.

Funding school with graduate student loans

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.

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Here are our top student loan lenders of 2019!
LenderVariable APREligibility 
* 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 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.

2 Important Disclosures for College Ave.

CollegeAve Disclosures

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.

(1)All rates shown include the auto-pay 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.

(2)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.

(3)As certified by your school and less any other financial aid you might receive. Minimum $1,000.

Information advertised valid as of 9/3/2019. Variable interest rates may increase after consummation.


3 Important Disclosures for Discover.

Discover Disclosures

  1. Students who get at least a 3.0 GPA (or equivalent) qualify for a one-time cash reward on each new Discover undergraduate and graduate student loan. Reward redemption period is limited. Please visit DiscoverStudentLoans.com/Reward for any applicable reward terms and conditions.
  2. View Auto Reward Debit Reward Terms and Conditions at DiscoverStudentLoans.com/AutoDebitReward.
  3. Aggregate loan limits apply.
  4. Lowest rates shown are for the undergraduate loan and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments. The interest rate ranges represent the lowest interest rate offered on the Discover Undergraduate Loan and highest interest rates offered on Discover student loans, including Undergraduate, Graduate, Health Professions, Law and MBA Loans. The fixed interest rate is set at the time of application and does not change during the life of the loan. The variable interest rate is calculated based on the 3-Month LIBOR index plus the applicable Margin percentage. The margin is based on your credit evaluation at the time of application and does not change. For variable interest rate loans, the 3-Month LIBOR is 2.50% as of July 1, 2019. Discover Student Loans will adjust the rate quarterly on each January 1, April 1, July 1 and October 1 (the “interest rate change date”), based on the 3-Month LIBOR Index, published in the Money Rates section of the Wall Street Journal 15 days prior to the interest rate change date, rounded up to the nearest one-eighth of one percent (0.125% or 0.00125). This may cause the monthly payments to increase, the number of payments to increase or both. Please visit discover.com/student-loans/interest-rates for more information about interest rates.
Discover's lowest rates shown are for the undergraduate loan and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments.

4 Important Disclosures for CommonBond.

CommonBond Disclosures

Offered terms are subject to change and state law restrictions. Loans are offered through CommonBond Lending, LLC (NMLS #1175900).

  1.  Rates are as of July 1, 2019 and include auto-pay discount. All loans are eligible for a 0.25% reduction in interest rate by agreeing to automatic payment withdrawals once in repayment. Variable rates may increase after consummation.

5 Important Disclosures for Citizens.

Citizens Disclosures

  1. Undergraduate Rate Disclosure: Variable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of September 1, 2019, the one-month LIBOR rate is 2.14%. Variable interest rates range from 3.24% – 11.50% (3.24% – 11.35% APR) and will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a co-signer. Fixed interest rates range from 4.72% – 12.19% (4.72% – 12.04% APR) based on applicable terms, level of degree earned and presence of a co-signer. Lowest rates shown requires application with a co-signer, are for eligible applicants, require a 5-year repayment term, borrower making scheduled payments while in school 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. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of the loan.
  2. Citizens Bank Student Loan Eligibility: Borrowers must be enrolled at least half-time in a degree-granting program at an eligible institution. Borrowers must be a U.S. citizen or permanent resident or an international borrower/eligible non-citizen with a creditworthy U.S. citizen or permanent resident co-signer. For borrowers who have not attained the age of majority in their state of residence, a co-signer is required. Citizens Bank reserves the right to modify eligibility criteria at anytime. Interest rate ranges subject to change. Citizens Bank private student loans are subject to credit qualification, completion of a loan application/consumer credit agreement, verification of application information, and if applicable, self-certification form, school certification of the loan amount, and student’s enrollment at a Citizens Bank- participating school. 

    Please Note: International Students are not eligible for the multi-year approval feature.

  3. Co-signer Release: Borrowers may apply for co-signer release after making 36 consecutive on-time payments of principal and interest. For the purpose of the application for co-signer release, on-time payments are defined as payments received within 15 days of the due date. Interest only payments do not qualify. The borrower must meet certain credit and eligibility guidelines when applying for the co-signer release. Borrowers must complete an application for release and provide income verification documents as part of the review. Borrowers who use deferment or forbearance will need to make 36 consecutive on-time payments after reentering repayment to qualify for release. The borrower applying for co-signer release must be a U.S. citizen or permanent resident. If an application for co-signer release is denied, the borrower may not reapply for co-signer release until at least one year from the date the application for co-signer release was received. Terms and conditions apply. Borrowers whose loans were funded prior to reaching the age of majority may not be eligible for co-signer release. Note: co-signer release is not available on the Student Loan for Parents or Education Refinance Loan for Parents.
3.25% – 10.65%*,1Undergraduate and Graduate

Visit SallieMae

3.70%
11.98%
2
Undergraduate, Graduate, and Parents

Visit College Ave

3.37%
11.87%
3
Undergraduate and Graduate

Visit Discover

3.52% – 9.50%4Undergraduate and Graduate

Visit CommonBond

3.24% – 11.50%5Undergraduate and Graduate

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Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.

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