It’s not rocket science. The further you are in your academic career, the more financially independent you become.
That’s why just 60 percent of advanced-degree students have cosigners on their student loans. Compare that to 93 percent of undergraduate students who enjoy cosigner support, according to MeasureOne.
If you’re going to law school, seeking an MBA, or considering other professional degrees, you probably already exhausted your financial aid opportunities for an education.
In the interest of independence, you could now be considering student loans without cosigner help.
Federal student loans without cosigner requirements
There are two federal options that don’t require cosigners for graduate or professional students: Direct Unsubsidized Loans and Direct PLUS Loans. They do require filling out the FAFSA, however.
You’re allotted $20,500 in Direct Unsubsidized Loans to put toward your graduate or professional degree. Your combined limit for your undergraduate and graduate education is $138,500. (At most, $65,500 of that amount can be in Direct Subsidized Loans from your undergraduate degree.)
The average cost of a law degree at top-ranked schools is $60,293 per year, according to U.S. News. So you can see why you might need help beyond unsubsidized loans.
If you maximize your unsubsidized loan allotment during graduate school, you could then resort to a Direct PLUS Loan.
Like Direct Unsubsidized Loans, PLUS Loans don’t require a cosigner. But you would need to have better than an “adverse” credit history to qualify. That’s key among the facts to know before applying for PLUS Loans.
If your credit history fails to make the grade, you could find an “endorser,” which is the federal government’s equivalent of a cosigner.
But without a creditworthy cosigner, you might start considering your private student loan options.
How to get a private student loan without a cosigner
If you took out a private loan for your undergraduate degree, you’re already familiar with the process of applying for and securing a loan. You supply personal and financial information to lenders and shop around for the best possible interest rate and loan terms.
The key difference is that when you were an undergrad, you likely rode the coattails of a cosigner. Lenders consider credit history, debt-to-income ratio, and other factors when evaluating a borrower. Because you were likely a teenage or 20-something borrower without much of a credit history, your cosigner would have stood in for support.
Now that you have an undergraduate degree and possibly even some work experience, you might be able to secure a favorable loan from a private lender on your own. In fact, graduates are four times more likely than their younger peers to secure student loans without cosigner backing, according to Sallie Mae.
So if you were wondering how to get a private student loan without a cosigner, now you know it’s possible.
Some lenders even offer student loans without cosigner backing specific to your degree type. For example, Sallie Mae offers loans for students seeking an MBA or pursuing a health profession, to name a couple examples.
Compare your federal and private student loan options
If you’re focused on student loans without cosigner requirements, you can receive one from the federal government or a private lender. Knowing which lender is best is the real challenge.
Your interest rate is a good place to start. Via the federal government, you’ll find fixed interest rates. For loans disbursed before July 1, 2018, the rates are:
- Direct Unsubsidized Loans: 6.00%
- Direct PLUS Loans: 7.00%
The federal government also applies a fee on these loans. For loans disbursed before Oct. 1, 2018, that would be 1.066 percent for Direct Unsubsidized Loans and 4.264 percent for PLUS Loans. The fee is taken out from your loan amount, making it important to apply for the right amount of funds.
Many of our recommended private student loan companies don’t charge loan origination fees. They also start their fixed interest rates at or near 3.00%. But these rates could be as high as 12.00% or more, depending on your creditworthiness.
Aside from offering variable interest rates — rates that can change over the life of your loan — private lenders might be more appealing for other reasons.
If you’re a dental school student, for example, you might have off-campus expenses. A private lender like Citizens Bank lends as much as $295,000 to health profession students. By comparison, a Direct PLUS Loan would only cover the cost of your school’s attendance.
You should also compare your federal and private student loan options on another major front: repayment assistance. Even the best private lenders can’t match the federal government’s potential offer of loan forgiveness, for example. In fact, there are nationally- and state-funded loan repayment assistance programs for lawyers, doctors, and other health care professionals.
A final word on student loans without cosigner support
Being a graduate or professional student makes you independent in the eyes of the federal government. That status allows you to borrow more for your education than a dependent undergraduate. It’s one of many differences between undergraduate and graduate school loans.
But just because you could borrow from the government without a cosigner doesn’t mean you should do the same with a private lender.
If you find yourself Googling the words, “student loans without cosigner bad credit,” for example, you might be better off relying on your federal loan options or finding a good cosigner. For example, you can explore ways to find a cosigner when your parents aren’t options.
But you might still be prioritizing private student loans without a cosigner and no credit history required. In that case, ensure that you get the lowest possible interest rate by working on improving your credit first.
Need a student loan?Here are our top student loan lenders of 2018!
1 = Citizens Disclaimer.
2 = CollegeAve Autopay Disclaimer: All rates shown include the auto-pay 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.
* 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.
3 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
|4.04% - 12.66%2||Undergraduate, Graduate, and Parents||Visit CollegeAve|
|4.11% - 12.19%||Undergraduate and Graduate||Visit Ascent|
|3.87% - 11.85%*3||Undergraduate and Graduate||Visit SallieMae|
|2.93% - 9.67%||Undergraduate, Graduate, and Parents||Visit CommonBond|
|3.78% - 11.99%1||Undergraduate, Graduate, and Parents||Visit Citizens|
|4.51% - 9.69%||Undergraduate and Graduate||Visit LendKey|
|3.91% - 11.45%||Undergraduate and Graduate||Visit Connext|