Note that the situation for student loans has changed due to the impact of the coronavirus outbreak and relief efforts from the government and many lenders. Check out our Student Loan Hero Coronavirus Information Center for additional news and details.
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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
- Compare offers from private student loan lenders
- Explore grants and scholarships
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|
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.
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.
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|* 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.
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 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.
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.
5 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 applicant’s ability to supply the necessary information for submission.
6 Important Disclosures for CommonBond.
Offered terms are subject to change and state law restrictions. Loans are offered through CommonBond Lending, LLC (NMLS #1175900).