Graduate student loans can provide you with the money you need to pay for your graduate or professional school education, and before you haphazardly go about applying to lenders without any rhyme or reason, you should first understand that there are four major categories of graduate student loans that you may want to consider:
- Federal Stafford Loans
- Direct PLUS Loans for Graduate and Professional Student
- Program-related Graduate and Professional School Loans
- Private Student Loans
Federal Stafford Loans
You have probably heard about Federal Stafford Loans, as these loans are also available to undergraduate students. The major difference that goes into effect when you are a graduate student has to do with a major increase in the available loan amounts that you can access, as these will be much higher than the maximum limits that are in place for undergraduate students.
The maximum amount you can take out in Stafford Loans when you are a graduate student is 20,500 dollars on a yearly basis, with no more than 8,500 dollars to be taken out in Subsidized Loans. There is also a maximum cumulative limit on the amount of money you can receive via Stafford Loans throughout your college career, and this limit is currently set at 138,500 dollars, with no more than 65,500 dollars in Subsidized Loans.
Direct PLUS Loans for Graduate and Professional Students
PLUS Loans aren’t strictly for parents, and you can personally take out a PLUS Loan on your behalf when you are enrolled in a qualified graduate, or professional program. You need to fill out a FAFSA to become eligible for a PLUS Loan, as well as complete a separate application that can be provided by your school’s financial aid department.
PLUS Loans for Graduate Students are based in-part on credit, so make sure that you have the appropriate credit history in place before you go ahead and apply. While you can get these student loans without a cosigner if you have good credit, if you have bad credit you can also apply with a creditworthy cosigner. You can apply for up to the cost of attendance with a PLUS Loan, and the interest rate should be fixed at 7.9% for the life of your loan.
Program-related Graduate and Professional School Loans
Program-related graduate school loans are education loans that are provided to students who may be enrolled in certain types of graduate, or professional degree programs. Examples could include specific kinds of education loans for medical students, law students, and students that may be going for their MBA.
These types of student loans typically come with favorable interest rates that are inline with the kind of rates you would expect to receive with a federal student loan. While most of these student loans are made by private lenders, they have several advantages in terms of cost, and repayment benefits over your standard private student loan, and to learn more about such benefits you should investigate the particular graduate loan you are currently eying.
Private Student Loans
Private student loans aren’t strictly designed to benefit undergraduate students, and you can expect to take out the cost of attendance minus any financial aid via most private education loans when you are a graduate student. The rate of graduate students that turn to private loans is much higher than the proportion of undergraduate students that utilize them, and you may actually be able to get a better deal when you’re a graduate student if you are willing to shop around.
You should still only turn to private student loans when you have exhausted all other means to finance your graduate school education, as these student loans cost the most when compared to the other types of education loans that are designed for graduate students. Remember that these loans are based on credit, and you should therefore either apply with a creditworthy cosigner, or have a substantial credit history in place in order to get an approval.
