Are you looking to start grad school and trying to figure out how to pay for it? The question you must have on your mind is, can graduate students get loans? Most people know that the federal government pays interest on student loans while the undergrad is still in school. What most people do not know is that graduate students do not get access to subsidized loans. The federal government and some companies offer grad student loans, but none of them offer a subsidized plan. The good news is you get to borrow more than you would have been able as an undergraduate student to cover tuition costs. It is important to note that debt collectors sum up any outstanding debt from undergrad school with the loan you want to take out now.
What is the Difference Between Undergraduate and Graduate Loans?
· Graduate Students Can Borrow More.
Graduate student loans generally offer larger sums of money compared to undergraduate loans. This difference can be attributed to the difference in tuition fees. Generally, graduate school charges more tuition fees compared to undergraduate school. Graduate school students can borrow up to twenty thousand five hundred dollars in unsubsidized federal loans in a year. In contrast, medical school grad students can borrow up to double the amount. The cap for undergraduate student loans is determined by how far the student has progressed in the program. The highest they can get is seven thousand five hundred dollars in subsidized loans.
· Graduate Students Pay More Interest Rates.
Compared to undergrad interest rates that can be as low as 5%, grad students have to pay an interest rate of 6%. The interest rate typically stays the same for the entirety of the time it takes the student to pay off the loan.
· Graduate Students Defer their Loans Upon Request.
Undergraduate students automatically get their loans deferred. This is not the case with grad students. A grad student has to make a formal request to get their loan deferred.
What Are the Different Types of Student Loans Graduate Students Can Get?
If you are looking to take out a graduate loan to finance your graduate education, here are a few graduate school student loans you can apply for. There are two types of federal student loans, unsubsidized Stafford loans, and Graduate PLUS Loans.
· Stafford Loans
Grad students can apply for Stafford loans. These loans have a limit of $138,500. Graduate students get a fixed-rate unsubsidized version of the loan. Congress is responsible for setting interest rates. The first installment of Stafford loans is charged a 1.069% fee of the disbursement amount, which is why the amount you receive might be lower than what you applied for.
· The Graduate PLUS Loans
This type of graduate student loan allows the applicant to receive financial aid matching attendance as confirmed by the school. Any financial help you get towards paying off a semester’s fees is deducted from the loan amount. There is no aggregate limit for this loan type. To qualify for this loan type, you must have a good credit history. The interest rate for Graduate PLUS loans is 6.31%.
· Private Student Loans
Non-government student loans can also help graduate students finance their education. Firms or banks issue private student loans. Private student loans can have fixed rates or variable interest rates depending on the firm. There is a catch; typical private loans require starting the repayment process while still in school. This might mean working a part-time job while taking classes to keep up with the loan. The up side is, if you have a strong credit score, you can get better rates from private student loans than federal student loans.
We hope this article answers the question can grad students get loans? If you meet the basic eligibility standards for federal student loans, you are likely to get the highest possible amounts disbursed. The rule of thumb is graduate students cannot take out more than $138,500 cumulative subsidized and unsubsidized loans. Financial experts advise students to stay up to date on their current outstanding federal student loan amounts because it helps finish loan repayment faster. Graduate students should pay attention to the exact date when their loan starts accruing interest to keep up with the payments.