Searching for Graduate Student Loans?
More College, More Loans
Once you complete your Bachelors degree and decide to proceed further with your education you will most likely still need student loans. Like you did as an undergraduate student you’ll find loans appropriate for graduate students also from federal, state, and private sources. Some of the same loans are available to grad students.
But guess what? There are a few loans you may not know about that could offer abundant sources of financial aid for grad students.
A student loan rule of thumb: Always apply for federal graduate student loans before going to a private lender. Federal loans often require no credit check and interest rates are exponentially lower than those packaged with private loans.
Federal Graduate Student Loans
Some of the most popular graduate loans are the federal loans.
- They are accessible and affordable.
- Available through the Direct Loan Program or a commercial student loan provider that participates in the Federal Family Education Loan Program (FFELP).
Stafford Loans: A Must for Grad Students
Consider this: Between 2007 and 2012 the interest rate on the Stafford Loans will be incrementally reduced from a fixed 6.8% to a fixed 3.4%! Why? To ensure that American students have affordable access to federal money for college. As a graduate student you have a $138,500 aggregate loan limit—the amount of money you can borrow over 4 years—for the combination of subsidized and unsubsidized Stafford Loans. Health professions students, such as med students, have a higher aggregate Stafford Loan limit: $189,125.
Guess what? Neglect your Stafford Loans and you leave money on the table, so to speak.
Application for the Stafford Loans is no different than that for undergraduates: apply for the Stafford by filling out the Free Application for Federal Student Aid (FAFSA). You can still apply online or print off a paper FAFSA and mail it into the Department of Education.
PLUS Loans for Graduate and Professional Students
The PLUS Loan for Graduate and Professional Students was added to the federal loan program in 2006. The average student loan debt for grad students has continued to climb with no end in sight. Borrow enough funds on the PLUS Loan to pay the balance on your education costs. This is how it works: you apply for your federal Stafford Loans, your annual limit, really squeeze what you can out of those first. Then subtract your Stafford Loan awards from your college costs and you’re left with a balance that could be what you’re eligible to borrow under the PLUS Loan.
The Direct Loan program and the FFELP program both offer the PLUS Loan for Grads and Professionals.
This is a credit-based loan. With a good credit history you will likely have no problem being approved as a sole borrower. If you are worried about your bad credit, though, here’s a practical strategy that may get you the money you need from the PLUS: borrow with a co-signor. This will allow you to get the loan and build or repair your credit.
**Fail to file a FAFSA you will not be eligible to apply for a PLUS.
Private Loans for Graduate Students
Loan limits on your federal loans may force you to seek auxiliary sources for student loans. Many of the same lenders that offer federal student loans also advertise private student loans, sometimes called alternative loans. If you use a lender that participates in the FFELP you might check out the private loan options. Private loans, when used correctly, can satisfy the balance left on your college costs once your federal aid, scholarships and grant money have all been subtracted. When you plan your student loans carefully you are able to pay for your education as affordably as possible. Borrow irresponsibly and you leave cheap and easy loan money on the table as well as overspend on your already expensive education.
Commercial student loan providers, state loan programs, and private banking institutions all may extend brands of private student loans.
Your credit history must be good to borrow private loans on your own. But applying for a private loan with bad credit should not necessarily eliminate you. Manage your poor credit and borrow with a credit-worthy co-signor. Chances are you’ll get the funds you need to pay for school. A hidden perk: during loan repayment you have the opportunity to improve your credit record when you make your regularly scheduled payments on time, every time.
Grads: Finance Computers and Books
Private loans are also appealing for their usefulness when financing school-related expenses besides the basic tuition and books. Maybe you need a new computer or lab supplies.
Law and Med Student Private Loans
If you are a Law, med, or business grad student many lenders package private loans specifically designed to meet the financial demands. Shop carefully: these are often high limit loans with variable interest rates.
Loans for Graduate Students You May Not Know About
Graduate students: are you studying in a critical need field?
Find specific med school loans and Law loans that may just pay for themselves, literally. Loan forgiveness, waivers, and loan repayment programs are effective tools for attracting well-educated graduates to high need facilities. How do these types of loans work? Agree to work as a doctor or practice public law for a certain period of time and all or part of your loans may be paid off or waived.
As a graduate student you are on eye level with the cost of your education. Manage your student loans responsibly—remember: federal loans first.