Whether you?re going from college straight into graduate school, medical school or law school, or going back to obtain a master?s degree, you may need financing to help you cover the expenses. Just as you did for college, you?ll need to fill out a Free Application for Federal Student Aid (FAFSA) to determine your expected contribution and discover any scholarships or grants you can apply for. After you?ve explored the alternatives to student loans, which may include tuition assistance from your employer, fellowships, graduate assistantships, or job opportunities, you may also need to consider loans to finance your education.
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Learn more about federal education loans and private student loan options below so you can be more prepared as you explore graduate borrowing opportunities.
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- Federal Direct Loans: There are several federal student loans available, including Stafford Loans, Plus Loans and Perkins Loans, and they may have different terms and conditions than private student loans. This makes them a good option to explore.
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- Stafford Loans:? These are some of the most popular higher education loans available. When subsidized, they are available to students demonstrating financial need, and the government pays the accrued interest. If they?re unsubsidized, anyone can apply for the loan, but they will be required to pay the interest. In either case, there?s a six-month grace period after you graduate, so you can find a job before you have to start paying back the loan.
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- PLUS Loans for graduate students: If you have strong credit and have shown consistency paying off undergraduate loans, the federal PLUS Loan may be right for you. You may borrow up to the total cost of you education, but the loan amount must be certified by the school. However, if you have had difficulty making payments or defaulted on previous loans, your credit score may not be strong enough and you may want to examine alternatives to PLUS student loans.
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- Perkins Loans: Another need-based education loan, Perkins Loans are awarded by your school and repaid to the school. Keep in mind other aid you are receiving may have a direct impact on your ability to receive this type of loan. You will have a nine-month grace period after graduation before you need to begin repayment.
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- Private student loans: If the above loans do not cover the cost of attending school entirely, you may want to consider private student loan options. These are offered by banks and lending institutions, so ask your college for a list of preferred lenders to help you choose a reputable one. An alternative to federal student loans, private loans can still cover the total cost of your education. Because the interest rates can be higher and borrower requirements more strict, they?re generally a good supplement to federal loans rather than a replacement.
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Other things to consider as you apply for graduate education loans
As you are planning to continue your education, work to improve your credit score so you can qualify for education loans. To do so, start by paying off high-interest debts, consider cancelling store credit cards or consult a credit counselor. Talk to your employer to see if tuition assistance is provided. Then, use a student loan calculator to account for current debts you have and financial aid you?ve received to find the best way to pay for graduate school using federal education loans or private student loans.
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