Graduate Student Loan Options

There are several types of low-interest loans available to graduate and professional school students. Graduate student loans are similar to the undergraduate student loan programs, but often with higher annual loan limit amounts. Some loans are unique to a graduate or professional school student's academic program of study.

The most common types of low-interest loans used by graduate and professional school students include the Federal Stafford Loan, and the Federal Grad PLUS Loan and private student loans. The Federal Stafford loan for graduate students and the Federal Grad PLUS loan are both unsubsidized loans. Graduate and professional students have not been eligible for subsidized Federal Stafford loans since July 1, 2012. Graduate and professional students remain eligible for the Federal Perkins loan, a subsidized loan, dependent on the college's policies.

Federal Stafford Loan Federal Grad PLUS Loan Private Student Loan
Annual Limits Up to $20,500/year Cost of Attendance - Aid Cost of Attendance - Aid
Cumulative Limits $138,500 or $224,000 None Varies by Lender
Varies by Degree and Academic Major
Funds Disbursed to the School Yes Yes Yes
Cosigner Required? No No Yes
Credit Criteria None Borrower may not have an Adverse Credit History Credit Scores
Debt-to-Income Ratios
No Adverse Credit History
Requires School Certification Yes Yes Yes
FAFSA Required? Yes Yes No
Lender Federal Government Federal Government Private Lenders and Financial Institutions
Interest Rate Type Fixed Fixed Fixed and Variable Options
Interest Rate Fixed at 6.21% for the 2013 - 2014 academic year Fixed at 7.21% for the 2013 - 2014 academic year Depends on Borrower and Cosigner Credit
Rate Reduction for Auto Debit 0.25% 0.25% Varies by Lender
Deductible Interest Yes Yes Yes
Subsidized Interest No No No
Loan Fees 1.072% 4.288% Varies by Lender and Borrower Credit
Typically, 0% to 5% of the amount borrowed
Prepayment Penalties None None None
Interest Capitalization Once at Repayment Once at Repayment Monthly, Quarterly, Annually or Once at Repayment
In-School and Grace Period Deferment Immediate Repayment
Full Deferment
Immediate Repayment
Full Deferment
Immediate Repayment
Interest-Only Payments
Fixed In-School Payments
Full Deferment
Forbearance Options 3 years 3 years 1 year
Repayment Term Varies by Repayment Plan and Loan Balance
10 to 30 years
Varies by Repayment Plan and Loan Balance
10 to 30 years
Varies by Lender
5 to 25 years
Repayment Plans Standard, Extended, Graduated, ICR, IBR, PAYER Standard, Extended, Graduated, ICR, IBR, PAYER Varies by Lender
Death Discharge Yes Yes Varies by Lender
Disability Discharge Yes Yes Varies by Lender
Public Service Loan Forgiveness Yes Yes No
Can be Consolidated? Yes
Does Not Relock Rate
Yes
Does Not Relock Rate
Varies by Lender
Rate Based on Current Credit
Bar Study, Residency and Relocation Loans No No Yes

How to Pick the Best Graduate Student Loans

Always start with the Federal Stafford Loan for graduate students. This graduate student loan is available to most graduate and professional students, since eligibility does not depend on the borrower's credit history. It also does not require a cosigner. The Federal Stafford Loan has a low, fixed interest rate and flexible repayment terms.

If a student has exhausted eligibility for the Federal Stafford loan, there are a couple of options for additional financing: the Federal Grad PLUS loan and Private Student Loans for graduate students.

Criteria for Comparing Federal Grad PLUS and Private Student Loans

When comparing Federal Grad PLUS and private student loans, there are several possible criteria:

  • The Federal Grad PLUS loan has less strict credit criteria, making available to more students.
  • The Federal Grad PLUS loan does not require a cosigner.
  • The Federal Grad PLUS loan has a low, fixed interest rate that is the same for all borrowers.
  • Private student loans may offer a competitive interest rate for borrowers with excellent credit.
  • Some private student loans have variable interest rates. These interest rates can increase over the life of the loan.