Graduate Student Loans: Financing Your Dream Degree

A graduate degree can help you achieve your professional goals and learn more in-depth about your field. Nonetheless, the price is frequently high. Graduate student loans are a popular way to fund further education. This guide will cover the fundamentals of graduate school loans, including types, eligibility requirements, application procedures, and repayment options.

What is a Graduate Student Loan?

Federal or private graduate student loans are intended for students pursuing master’s, doctoral, or other advanced degrees. Federal graduate student loans include grad PLUS and direct unsubsidized loans. The maximum annual loan amount for direct unsubsidized loans is $20,500. Grad PLUS loans, on the other hand, let you borrow up to the amount of tuition at your school minus any previous financial aid that you may have received.

Graduate school loans may also be provided by private lenders such as credit unions, banks, and internet lenders. Many allow you to borrow up to the cost of attendance at your school, while some have less restrictive rules. Some lenders only make loans to students enrolled in MBA, medical, and law schools. Federal graduate student loans have fixed interest rates that apply to all borrowers, while private student loans offer a range of rates that can be variable or fixed. Borrowers with the best credit typically get the lowest rates.

You can use a graduate student loan for tuition, fees, and other costs associated with your education, regardless of whether you borrow from a federal or private lender.

How Do Student Loans Work for Graduate School?

Undergraduate and graduate student loans function in similar ways. Graduate students can apply for either private or federal student loans. Federal loans are typically easier to qualify for than private debt, have more flexible repayment options, and, in some cases, lower interest rates. Along with important safeguards and benefits, loan forgiveness programs and the COVID-19-related payment and interest accrual pause, which has been in effect since March 2020, are included.

Remember that graduate student loans usually have higher loan limits than undergraduate loans; this means you can borrow more money annually, up to the annual cost of attendance at your school, or up to a lifetime cap. This is because alternatives like law or business school typically come with higher costs than a bachelor’s degree.

Graduate student loans typically have greater interest rates in addition to higher borrowing limits. For the 2021–2022 academic year, undergraduates can obtain federal unsubsidized loans at a rate of 3.73%, while graduate students will pay 5.28% for the same loan.

Best Graduate Student Loans

  • Earnest: A nationwide student lender, Earnest provides graduate student loans for a range of academic programs. Although it’s not necessary, Earnest makes it easy to add a cosigner to your loan. After graduation, borrowers may also choose to forgo up to one payment per year; however, the missed payment will be added to the end of the repayment period. Earnest provides a nine-month grace period and lends up to the cost of attendance at your school. You can choose a repayment period of 10, 12, 15, 7, 10, or 12. 
  • College Ave: College Ave, an online student lender, offers low-interest loans for a wide range of programs, including MBA, law, and medical school programs. The company’s graduate school loans allow students to borrow up to 100% of their school-certified educational costs in a variety of academic disciplines.

You can select repayment terms of five, eight, ten, or fifteen years, and you can borrow up to the cost of attendance at your school. College Ave allows you to postpone payments for up to nine months after graduation while you’re still enrolled in school. You can begin making small or full payments right away. 

  • Sallie Mae: One of the most well-known private student loan providers in the United States is Sallie Mae. It offers specialized loans for medical school, law school, dental school, health professions programs like pharmacy school, and other options, in addition to its standard graduate student loan. You only have the option of one 15-year repayment term, but you are free to borrow as much money as you need to pay for education. Sallie Mae provides a six-month grace period, just like College Ave.
  • SoFi: Student loans are available from SoFi, an online lender, for all educational levels. There are several advantages to its graduate student loan, such as no application fees, an online application process, and special member benefits. Discounts on interest rates, financial planning, and other advantages are available to members.

You can use a SoFi loan to pay for 100% of your school-certified costs, with repayment terms of five, ten, or fifteen years. A six-month grace period is typically included with graduate student loans from SoFi. 

What is the maximum amount I can borrow for graduate school?

The maximum amount you can borrow varies according to the type of graduate school loan you take out. Creditworthy borrowers can typically obtain private loans for up to 100% of their certified expenses, though some lenders have less stringent criteria.

Graduate students can borrow up to $20,500 in unsubsidized federal loans each year, for a total of $138,500. You can apply for Grad PLUS loans up to your school’s certified cost of attendance, minus any additional financial aid you receive. 

Conclusion

It is essential to comprehend graduate student loans to finance higher education. Different options are available with federal and private loans, such as varying interest rates, borrowing limits, and repayment schedules. Students can effectively finance their education and accomplish their professional goals without undue financial stress by carefully weighing these factors.

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