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

 June 30, 2020
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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 2021!
LenderVariable APREligibility 
0.94% – 11.98%1Undergraduate
Graduate

Visit College Ave

1.13% – 11.23%*,2Undergraduate
Graduate

Visit SallieMae

0.99% – 11.44%3Undergraduate
Graduate

Visit Earnest

1.50% – 11.33%4Undergraduate
Graduate

Visit Ascent

0.95% – 11.18%5Undergraduate
Graduate

Visit SoFi

1.03% – 11.01%6Undergraduate
Graduate

VISIT CITIZENS

N/A7Undergraduate
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 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.

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.

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 11/24/2021. 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 Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.

3 Rate range above includes optional 0.25% Auto Pay discount. 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).


4 Important Disclosures for Ascent.

Ascent Disclosures

Ascent loans are funded by Bank of Lake Mills, Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations; and terms and conditions may apply. For Ascent Terms and Conditions please visit: AscentFunding.com/Ts&Cs.

Rates are effective as of 10/01/2021 and reflect an automatic payment discount of either 0.25% (for credit-based loans) OR 1.00% (for undergraduate outcomes income-based loans). 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. For Ascent rates and repayment examples please visit: AscentFunding.com/Rates.

1% Cash Back Graduation Reward subject to terms and conditions, please visit AscentFunding.com/Cashback. Cosigned Credit-Based Loan student borrowers must meet certain minimum credit criteria. The minimum score required is subject to change and may depend on the credit score of your cosigner. Lowest APRs are available for the most creditworthy applicants and may require a cosigner.


5 Important Disclosures for SoFi.

Sofi Disclosures

UNDERGRADUATE LOANS: Fixed rates from 2.99% to 10.66% annual percentage rate (“APR”) (with autopay), variable rates from 0.95% to 11.18% APR (with autopay). GRADUATE LOANS: Fixed rates from 4.08% to 10.90% APR (with autopay), variable rates from 1.00% to 11.29% APR (with autopay). PARENT LOANS: Fixed rates from 4.23% to 10.66% APR (with autopay), variable rates from 1.15% to 11.18% APR (with autopay). For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. Interest rates for variable rate loans are capped at 13.95%, unless required to be lower to comply with applicable law. Lowest rates are reserved for the most creditworthy borrowers. If approved for a loan, the interest rate offered will depend on your creditworthiness, the repayment option you select, the term and amount of the loan and other factors, and will be within the ranges of rates listed above. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Information current as of 11/01/2021. Enrolling in autopay is not required to receive a loan from SoFi. Loans originated by SoFi Lending Corp. or an affiliate (dba SoFi), licensed by the Department of Financial Protection and Innovation under the California Financing Law License No. 6054612. NMLS #1121636 (www.nmlsconsumeraccess.org).


6 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

Undergraduate Rate Disclosure: Variable interest rates range from 1.03% – 11.01% (1.03% – 10.24% APR). Fixed interest rates range  from 3.23% – 11.70% (3.23% – 10.83% APR).

Graduate Rate Disclosure: Variable interest rates range from 1.89% – 10.66% (1.89% – 10.41% APR). Fixed interest rates range from 4.64% – 11.23% (4.64% – 10.95% APR).

Business/Law Rate Disclosure: Variable interest rates range from 1.89% – 9.22% (1.89% – 8.50% APR). Fixed interest rates range from 4.24% – 9.74% (4.24% – 9.02% APR).

Medical/Dental Rate Disclosure: Variable interest rates range from 1.89% – 8.02% (1.89% – 7.72% APR). Fixed interest rates range  from 4.18% – 8.54% (4.18% – 8.24% APR).

Parent Loan Rate Disclosure: Variable interest rates range from 1.97%-7.06% (1.97%-7.06% APR). Fixed interest rates range from 4.55%-7.58% (4.55%-7.58% APR).

Bar Study Rate Disclosure: Variable interest rates range from 4.44% – 9.58% (4.44% – 9.52% APR). Fixed interest rates range  from 7.39% – 12.94% (7.39% – 12.82% APR).

Medical Residency Rate Disclosure: Variable interest rates range from 3.53% – 7.03% (3.53% – 6.75% APR). Fixed interest rates range from 6.99% – 10.49% (6.97% – 10.08% APR).

Variable Rate Disclosure: Variable Rates advertised are 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 November 1, 2021, the one-month LIBOR rate is 0.09%.  Variable interest rates will fluctuate over the term of the loan with changes in the LIBOR rate, and will  vary based on applicable terms, level of degree and presence of a co-signer. Your final variable rate may  be based upon the 30-day average SOFR index, as published by the Federal Reserve Bank of New York.  The maximum variable rate is the greater of 21.00% or 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.

Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer.  Borrowers should carefully review federal benefits, especially if they work in public service, are in the military, are considering possible loan forgiveness options, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans. For more information about federal student loan benefits and federal loan consolidation, visit http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision on our website including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.

Eligibility Criteria: Applicants must be a U.S. citizen, permanent resident, or eligible non-citizen with a creditworthy U.S. citizen or permanent resident co-signer. For applicants 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 any time. Citizens Bank private student loans are subject to credit qualification, completion of a loan application/Promissory Note, 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.

Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.

Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.


7 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.