How to Get Student Loans When Returning to School

 July 17, 2020
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Private Student Loan rates starting at 3.58% APR

3.99% to 14.86% 1

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3.58% to 12.28% 2

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4.49% to 13.82% 3

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  • Variable APR

Note that the government has paused all repayment on federally held student loans through the end of 2022, with no interest to be charged during that period and no loans to be held delinquent or in default.

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Going back to school for a master’s degree or professional certification can advance your career and boost your income. But continuing education isn’t free, and you might need a loan to cover costs. If you can’t cover tuition solely with savings and scholarships, read on to learn about student loans for adults returning to school.

Read on for details on student loans for adults returning to school, including federal loan and private loan options.

Student loans for adults returning to school

Depending on the cost of your program, you could rely on federal student loans, private loans or a combination of both. Here’s how to get student loans for graduate school or a professional degree program.

Federal student loan options

Perhaps your best student loans option for returning to school are federal student loans. This is because federal loans tend to have lower interest rates, more generous repayment terms and more perks than private student loans. These perks can make student loan repayment easier on your budget.

For example, federal loans are eligible for repayment plans that are based on your income, which can reduce your monthly payment. Also, you might be able to get some or all of your student loans forgiven if you work in certain fields.

To apply for federal loans, you must first complete the Free Application for Federal Student Aid (FAFSA). As a returning student, you might qualify for the following federal loans:

Direct unsubsidized loans

As a graduate or professional student, you can take out a Direct unsubsidized loan with an interest rate of 4.3%. There’s a limit on how much you can borrow; graduate students can take out $20,500 annually.

To qualify for the loan, you must enroll in school at least half-time. There’s also a fee of 1.062% deducted from each loan disbursement, adding to the cost of your loan.

Direct PLUS loans

If you’re a graduate or professional student enrolled in school at least half time, you could qualify for a Direct PLUS loan. Direct PLUS loans have an interest rate of 5.3%. In addition, there’s a loan fee of 4.236% deducted from each loan disbursement, which adds to your education costs.

Although Direct unsubsidized loans limit how much you can borrow, PLUS loans work differently. The maximum amount you can borrow in PLUS loans is your cost of attendance minus any other financial aid you received.

Unlike other federal student loan options, the government will check your credit when it reviews your PLUS loan application. If you have an adverse credit history, you might not be able to receive a loan on your own. Instead, you’ll need to apply with an endorser or pursue other funding options.

Private student loans

In some cases, federal loans alone won’t be enough to cover the cost of your education. Private student loans can help fill the gap and allow you to complete your education.

Unlike federal student loans, which are issued by the government, private student loans are issued by private banks and financial institutions. The lender will look at your credit history and income to decide whether to give you a loan.

Each bank has its own eligibility criteria, so you have to apply with each lender to see if you qualify. If you don’t qualify on your own, you might be able to take out a loan by applying with a cosigner.

When it comes to graduate school, private student loans offer some unique benefits. Depending on your program and area of study, you could qualify for student loans that cover cost-of-living expenses or even relocation.

Some lenders also allow graduate students to defer payments. For example, Citizens Bank offers medical and dental students an eight-year deferment while they’re in school.

Keep in mind that private student loans usually have higher interest rates than federal ones. However, many lenders offer both fixed and variable rates. If you’re determined to pay off your debt as quickly as possible, you could opt for a variable-rate loan to take advantage of lower interest rates.

Private loans are ineligible for federal repayment programs, such as income-driven repayment plans and loan forgiveness. However, they can be a useful tool to finance your education if you run out of federal funding.

Financing your education

Going back to school can help you earn more money over the course of your career. If you’re trying to figure out how to get student loans to finance your education, it’s a good idea to consider both your federal and private options.

To save money and reduce the amount you need to borrow, check out some scholarships and grants for adults returning to college.

Rebecca Safier contributed to this report.

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