How to Get Graduate School Student Loans When You Hit Your Financial Aid Limit

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No matter which graduate degree you’re pursuing, chances are you’re managing high tuition costs. Low-interest direct unsubsidized loans can help you cover the costs, but there is other financial aid for graduate school, even if you’ve hit your direct loan limit.

That limit is $20,500 annually in direct unsubsidized loans. There is also a lifetime aggregate direct loan limit of $138,500, including any loans you received as an undergraduate, both subsidized and unsubsidized.

Some students in the health profession, however, can borrow more in direct unsubsidized loans, so you should speak with your financial aid office if this applies to you. You also may be able to take out more direct unsubsidized loans if you repay some of your current loans to get your debt below the aggregate limit.

But what if you’ve maxed out your student loans for graduate study? Here’s how to look to other sources for funding, including taking out private loans and getting grants.

Consider taking out a grad PLUS loan

Grad PLUS loans are another federal option for student loans, but their terms are different from those on direct unsubsidized loans.

For one, there are no specific loan caps: You can borrow up to the cost of attendance of your school, minus any other financial aid you’ve already received. Second, Grad PLUS loans have credit requirements. To be eligible, you have to submit both the Free Application for Federal Student Aid (FAFSA) and an application showing you have a decent credit history. If you have bad credit, you may still get a PLUS loan if you apply with an endorser who has better credit. Or, you can try to document extenuating circumstances that have led to your poor credit history.

As is the case with direct unsubsidized loans, grad PLUS loans come with flexible repayment plans, including extended repayment and Income-Based Repayment plans, but their fixed interest rates are higher than those offered on direct unsubsidized loans. PLUS loans also come with higher loan disbursement fees.

When exploring these different repayment plans, you can check out our student loan repayment calculators for Income-Based Repayment, Income-Contingent Repayment, Pay as You Earn (PAYE) and Revised Pay as You Earn (REPAYE) scenarios.

Repayment plan Eligible loans Monthly payment and repayment term length Eligibility and benefits
Standard Repayment Plan All direct loans (including consolidation loans) Fixed monthly payments that ensure the loan is paid off in 10 years (or 10 to 30 years for consolidation loans) All borrowers are eligible
Graduated Repayment Plan All direct loans (including consolidation loans) Payments start low and increase over time, typically every 2 years. You’ll pay off the loan within 10 years (or 10 to 30 years for consolidation loans)

All borrowers are eligible

Low monthly payments at the beginning, however, means you’ll generally pay more over time<

Extended Repayment Plan All direct loans (including consolidation loans) Payments are either fixed or graduated and the loan is paid off within 25 years

Borrowers with more than $30,000 in direct loans are eligible

Lower monthly payments than standard repayment

Revised Pay as You Earn Plan (REPAYE) All direct loans (including consolidation loans) issued to students Monthly payments are 10% of your discretionary income. Payments are recalculated each year based on your income and family size.

Borrowers with an eligible loan qualify for this plan.

Any outstanding balance on your loan for undergraduate studies will be forgiven after 20 years or 25 years for graduate or professional studies. However, you may have to pay tax on the amount forgiven.

Pay as You Earn Plan (PAYE) All direct loans (including consolidation loans) issued to students Monthly payments are 10% of your discretionary income, but never greater than your standard repayment plan would be. Payments are recalculated each year based on your income and family size.

Borrowers who were a new borrower on or after Oct. 1, 2007, and received a disbursement of a direct loan on or after Oct. 1, 2011, are eligible.

You must have a high debt-to-income ratio

Your monthly payment will never be more than the 10-year Standard Plan amount.

Any outstanding balance will be forgiven after 20 years

Income-Based Repayment Plan (IBR) All direct loans (including consolidation loans) issued to students Monthly payments are 10% or 15% of your discretionary income (depending on the date you first received the loans). Payments are recalculated each year based on your income and family size.

Borrowers must have a high debt-to-income ratio

Monthly payments never greater than what you would have paid through standard repayment

Any outstanding balance will be forgiven after 20 or 25 years

Income-Contingent Repayment Plan (ICR) All direct loans (including consolidation loans) issued to students Monthly payments will be 20% of your discretionary income or the amount you would pay on a repayment plan with a fixed payment over 12 years, adjusted according to your income. Payments are recalculated each year based on your income and family size.

Borrowers with eligible loans can select this plan

Any balance remaining after 25 years may be forgiven

This plan is a great option for borrowers seeking PSLF

Income-Sensitive Repayment Plan Federal Stafford loans, FFEL Loans Monthly payments are calculated using your annual income. Loans are paid in full within 15 years. Only available for FFEL Program loans

Compare offers from private student loan lenders

You might look into your options for private student loans to see if you can snag a lower interest rate, especially if you have good credit. Banks, credit unions or online student loan companies might be a good source of private student loans if you have good credit and can qualify for an interest rate on the lower end of the range.

Private lenders look at your credit, income and debt-to-income ratio before approving you for a loan. If you have strong credit or can find a cosigner who does, it’s worth shopping around with multiple lenders so you can find the loan with your lowest possible interest rate.

However, private student loans don’t always have the most flexible repayment plans, such as income-based repayment, as federal loans do. They also generally don’t offer the same borrower protections that federal student loans do, including deferment and forbearance options.

If you do decide a private student loan is right for you, you can submit an application online. After you fill out your information, the lender will contact your school to certify your information.

You can also shop around to take a look at different offers from private lenders.

Explore grants and scholarships

Before taking on student debt for graduate school, you should always seek out grants and scholarships, which you don’t have to pay back.

For example, you may be eligible for federal grants, such as the Teacher Education Assistance for College and Higher Education (TEACH) Grant. It offers up to $4,000 annually for students taking courses toward a career in teaching, particularly if it’s in high-need fields such as special education, science, math or foreign languages.

If you’re enrolled in a post-baccalaureate teaching program, you may even be able to get a Pell Grant, which is usually reserved for undergraduate students. You may also be able to qualify for a federal work study program, which can offer part-time employment opportunities if you have financial need.

You should also look into financial aid offered in your state or given directly through your school. Outside scholarships and grants offered by corporations and professional associations related to your course of study are also a potential option. Your employer may also offer financial assistance toward getting a graduate degree. Be sure to explore all resources for grad school scholarships and grants.

You might also consider loan forgiveness programs if you are going into certain eligible fields, particularly in the public service realm. Check out our complete list of student loan forgiveness programs.

Rebecca Stropoli and Kamaron McNair contributed to this report.

Need a student loan?

Here are our top student loan lenders of 2020!
LenderVariable APREligibility 
1.25% – 9.44%*,1Undergraduate and Graduate

Visit SallieMae

1.24%
11.98%
2
Undergraduate, Graduate, and Parents

Visit College Ave

1.24%
11.37%
3
Undergraduate and Graduate

Visit Discover

1.24%
11.44%
4
Undergraduate, Graduate, and Parents

Visit Earnest

2.73% – 13.01%5Undergraduate and Graduate

Visit Ascent

3.52% – 9.50%6Undergraduate and Graduate

Visit CommonBond

* 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. 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.
     
  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. This informational repayment example uses typical loan terms for a first year graduate student 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 7.10% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $141.66 while in the repayment period, for a total amount of payments of $16,699.21. 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 7/1/2020. Variable interest rates may increase after consummation. Lowest advertised rates require selection of full principal and interest payments with the shortest available loan term.


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 APRs shown are available for the most creditworthy applicants and include an interest-only repayment discount and Auto Debit Reward. The interest rate ranges represent the lowest and highest interest rates offered on Discover student loans, including undergraduate and graduate 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. For variable interest rate loans, the 3-Month LIBOR is 0.375% as of July 1, 2020. Discover Student Loans may 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. Our lowest APR is only available to customers with the best credit and other factors. Your APR will be determined after you apply. It will be based on your credit history, which repayment option you choose and other factors, including your cosigner’s credit history (if applicable). Learn more about Discover Student Loans interest rates.
  5. Get a variable interest rate from 2.37% APR to 6.14% APR (3-Month LIBOR + 2.00% to 3-Month LIBOR + 5.77%) for either a 10-year or 20-year repayment term. Or lock in a fixed interest rate from 3.99% APR to 7.49% APR for a 10-year repayment term or from 4.24% APR to 7.74% APR for a 20-year repayment term. 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 0.375% as of July 1, 2020. Discover Student Loans may 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.
Lowest APRs shown for Discover Student Loans are available for the most creditworthy applicants for undergraduate loans, and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments.

4 Important Disclosures for Earnest.

Earnest Disclosures

  1. Rates include 0.25% Auto Pay Discount
     
  2. Explanation of Rates “With Autopay” (APD)
    Rates shown include 0.25% APR discount when client agrees to make monthly principal and interest payments by automatic electronic payment. Use of autopay is not required to receive an Earnest loan.

    Available Terms
    For Cosigned loans – 5, 7, 10, 12, 15 years. 
    Primary Only – 10, 12, 15 years

    In school deferred payment is not available in AL, AZ, CA, FL, MA, MD, MI, ND, NY, PA, and WA).


5 Important Disclosures for Ascent.

Ascent Disclosures

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.

  1. Competitive variable rates calculated monthly at the time of loan approval based on a margin plus the 1-Month London Interbank Offered Rate (LIBOR) rounded to the nearest 1/100th of a percent. The current LIBOR is 0.667%, which may adjust monthly. Your interest rate may increase or decrease, based on LIBOR monthly changes. Rates are effective as of 06/01/2020 and reflect an Automatic Payment Discount. Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized bank account each month. (See Automatic Payment Discount Terms & Conditions.)
    1. Undergraduate Loans: Variable rate loans have an Annual Percentage (APR) range between 2.73% – 13.01%. Fixed rate loans have an APR range between 3.84% – 14.50% based on your credit worthiness and your selected program. Rates reflect an Automatic Payment Discount of 0.25% (for Credit-Based Loans) on the lowest offered rate and a 2.00% discount on the highest offered rate (See Undergraduate Loan repayment examples.)
    2. Graduate Loans: Loans have an APR range between 4.11% and 10.78% based on your credit worthiness and your selected program. Rates reflect an Automatic Payment Discount of 0.25%. (See Graduate Loan repayment examples.)
  2. Payments may be deferred. Subject to lender discretion, forbearance and/or deferment options may be available for borrowers who are encountering financial distress.
  3. Making interest only or partial interest payments while in school will not reduce the principal balance of the loan. There are three (3) flexible in-school repayment options that include fully deferred, interest only and $25 minimum repayment. (See Undergraduate Loan repayment examples.)
  4. Flexible repayment plans may be offered up to a fifteen (15) year repayment term for a variable rate loan and ten (10) year repayment term for a fixed rate loan. Students must be enrolled at least half-time at an eligible school. Minimum loan amount is $2,000.
  5. Interest rate reduction of 0.25% for enrollment in automatic debit applies only when the borrower and/or cosigner signs up for automatic payments and the regularly scheduled, current amount due (including full, flat, or interest only payments, as applicable) is successfully deducted from the designated bank account each month. Interest rate reduction(s) will not apply during periods when no payment is due, including periods of In-School, Deferment, Grace or Forbearance. If you have two (2) returned payments for Nonsufficient Funds, we may cancel your automatic debit enrollment and you will lose the 0.25% interest rate reduction. You will then need to re-qualify and re-enroll in automatic debit payments to receive the 0.25% interest rate reduction.
  6. All applicants (individual and cosigner) are required to complete a brief online financial literacy course as part of the application process to be eligible for funding.
  7. Eligibility, loan amount and other loan terms are dependent on several factors, which may include: loan product, other financial aid, creditworthiness, school, program, graduation date, major, cost of attendance and other factors. Aggregate loan limits may apply. The cost of attendance is determined and certified by the educational institution.
  8. The legal age for entering into contracts is eighteen (18) years of age in every state except Alabama where it is nineteen (19) years old, Nebraska where it is nineteen (19) years old (only for wards of the state), and Mississippi and Puerto Rico where it is twenty-one (21) years old.
  9. 1% Cash Back Graduation Reward subject to terms and conditions. Click here for details. In order to be eligible for the 1% Cash Back Graduation Reward, borrower must meet the following criteria after graduation:
    • The student borrower has graduated from the degree program that the loan was used to fund.
    • The student borrower may change majors and/or transfer to a different school, but must obtain the same level of degree (e.g. – undergraduate or graduate)
    • The graduation date is more than 90 days and less than five (5) years after the date of the loan’s first disbursement.
    • Any loan that the student has borrowed under the Ascent loan is not more than 30-days delinquent or in a default status as of the graduation date and until any Graduation Reward is paid.
  10. Students can apply to release their cosigner and continue with the loan in only their name after making the first 24 consecutive regularly scheduled full principal and interest payments on-time and meeting the other eligibility criteria to qualify for the loan without a cosigner.

* Application times vary depending on the applicant’s ability to supply the necessary information for submission.


6 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.

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.