$164,800. That’s the average cost for four years of medical school.
$138,492. That’s what aspiring lawyers are paying for their degrees, according to data from U.S. News.
Whatever advanced degree you’re studying for, chances are you’re dealing with high tuition costs. Low-interest Direct Loans from the Office of Student Aid can help you cover them, but they only go so far.
When the federal financial aid well dries up, you might have to look to other sources for funding.
Before delving into how to get student loans for grad school, let’s answer an important question: What is the maximum student loan amount for your lifetime?
Federal student loan limits for Direct Loans
Federal Direct Loans, which currently have a fixed interest rate of 6.00% for grad students, can be a huge help in paying for school, but they might not cover your full cost of tuition.
That’s because your eligibility is limited by two factors. First, the federal government sets the following federal student loan limits for graduate students:
- An annual limit of $20,500
- An aggregate lifetime limit of $138,500, including any federal loans you already received as an undergraduate. (Note that some health profession students can take out even more; speak with your financial aid office if this could apply to you.)
Not only do these federal student loan limits put a cap on how much you can borrow, but your school’s financial aid office might also curb your borrowing. For instance, even though you’re technically eligible to borrow up to $20,500 per year, your financial aid office might only offer you $15,000.
That’s because your financial aid package depends on both the school’s budget and the information you provide on the FAFSA.
Whether you can borrow the maximum amount, you still might not have enough to pay for grad school. If you find yourself in this situation, you could cover the gap in one of two ways: with a Grad PLUS Loan or a private student loan.
Here’s how to get student loans for grad school when you can’t get any more Direct Loans.
1. Consider taking out a Grad PLUS Loan
Grad PLUS Loans are another federal option for student loans, but they have different terms than Direct Loans.
For one, 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 FAFSA and an application showing you don’t have an adverse credit history. If you do, you could apply with an endorser who has better credit.
Grad PLUS Loans have higher interest rates than Direct Loans. They come with a fixed interest rate of 7.00%, as of July 1, 2017. They also have an origination fee of 4.264 percent.
That means if you took out $20,000, you’d have to pay an origination fee of $852.80. Over 10 years of repayment, you’d pay $7,866 in interest.
Grad PLUS Loans come with flexible repayment plans, including Extended Repayment and Income-Based Repayment, but they don’t necessarily offer the lowest interest rates. Before choosing a Grad PLUS Loan, you might look into your options for private student loans to see if you can snag an even lower rate, especially if you have good credit.
2. Compare offers from private student loan lenders
When considering how to get student loans for grad school, look into private lenders. Banks, credit unions, or online student loan companies might be a good option if you qualify for a low interest rate.
Private lenders look at your credit, income, and debt-to-income ratio before approving you for a loan. If you have strong credentials — or can apply with a cosigner who does — you could secure a low interest rate.
As a result, your private loan could cost less than a Grad PLUS Loan. Citizens Bank, for example, offers variable rates starting from 4.19% and fixed rates starting at 5.25%. What’s more, Citizens Bank doesn’t charge an origination fee.
Let’s again consider that example of a $20,000 loan on a 10-year repayment plan. At a 5.25% interest rate, you’d pay $5,750 in overall interest — more than $2,000 less than you would pay with a Grad PLUS Loan. Plus, you wouldn’t have to deal with the $852.80 origination fee at all.
In this case, a low-interest private loan could be superior to a Grad PLUS Loan. If you have decent credit, it’s worth shopping around with multiple lenders so you can find the loan with the lowest possible interest rate.
However, private student loans don’t always have the most flexible repayment plans. If you’re worried about your ability to pay back the loan, sticking with a federal loan — and the borrower protections that come with it — could be the safer way to go.
If you decide a private student loan is right for you, it’s easy to submit a full application online. After you fill out your information, the lender will contact your school to certify your information.
Applying for a private student loan is an easy online process. But make sure to compare offers from multiple lenders and consider Grad PLUS Loans before committing.
Don’t forget to search for free money
When you’ve run up against the federal student loan limits for grad students, you might need to take out a Grad PLUS Loan or a private student loan.
Of course, before taking on student debt, you should always seek out grants and scholarships. You might also search for a part-time job to cover expenses or start a side hustle to earn some extra income.
By taking these proactive steps today, you can reduce the amount of debt you have to pay back tomorrow. But if you’ve taken advantage of alternative options — and thought through a plan for repayment — then taking out additional loans could be the right financial move.
Just make sure to compare your options so you can find the right student loan for you.
Need a student loan?Here are our top student loan lenders of 2018!
|1 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.
2 Important Disclosures for Discover.
3 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) or Turnstile Capital Management, LLC (TCM), which are not affiliated entities. Certain restrictions and limitations may apply. 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. All loan products may not be available in certain jurisdictions. Other terms and conditions apply. Ascent is a federally registered trademark of 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.
* 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 PNC.
PNC Bank is one of the nation’s largest education loan providers. For over 40 years, PNC has been committed to helping students and their families make possible the adventure of college.
6 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. ©2018 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved.
7 Important Disclosures for LendKey.
Additional terms and conditions apply. For more details see LendKey
8 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.
9 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|3.69% – 10.94%1||Undergraduate, Graduate, and Parents||Visit CollegeAve|
|3.97% – 12.97%3||Undergraduate and Graduate||Visit Ascent|
|4.34% – 12.99%2||Undergraduate and Graduate||Visit Discover|
|4.12% – 10.98%*,4||Undergraduate and Graduate||Visit SallieMae|
|5.03% – 11.23%5||Undergraduate and Graduate||Visit PNC|
|4.00% – 13.00%6||Undergraduate and Graduate||Visit SunTrust|
|4.72% – 9.81%7||Undergraduate and Graduate||Visit LendKey|
|3.72% – 9.68%8||Undergraduate, Graduate, and Parents||Visit CommonBond|
|4.19% – 12.06%9||Undergraduate, Graduate, and Parents||Visit Citizens|