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The Ultimate Guide to Graduate Student Loans in the US: Everything You Need to Know

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Table of Contents:


Federal Student Loans for Grad School

Private Student Loans for Grad School

Choosing the Best Option

Frequently Asked Questions (FAQs)



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Are you a graduate student or considering pursuing your master's or doctoral degree in the US? If so, you've likely come across the daunting task of financing your education. In this article, we'll dive into the world of loans for graduate students and explore the options available to help alleviate the financial burden of grad school.

First, I will discuss the importance of understanding the different types of loans available, both federal and private. We'll explore the process of applying for these loans, and the impact of interest rates and repayment plans. Lastly, I will provide tips and resources that you can use to make your decision, including the support offered by SuperMoney.

Join me to discover the complexities of graduate student loans and make an informed decision about your financial future!

Federal Student Loans for Grad School

These loans can be a valuable resource for graduate students with a US citizenship who are looking to fund their higher education, as they offer competitive interest rates and flexible repayment options. However, there are different types of federal student loans available, and it's important that you have a clear idea of these options to make an informed decision. Here you can find more details about the Direct Student Loan and the Grad PLUS Loan. Stay tuned to explore their main features, eligibility criteria, and application process. 

Direct Unsubsidized Student Loans

As a graduate student, one of the most common ways to finance your education is through Direct Unsubsidized Student Loans. The first step in applying for these loans is to complete the Free Application for Federal Student Aid (FAFSA). This form will determine your eligibility for federal financial aid, including Direct Unsubsidized Loans. Once your FAFSA is processed, you will receive a financial aid award letter outlining the types and amounts of aid you are eligible to receive. From there, you can decide which loans to accept.

Looking at the eligibility criteria, to receive a Direct Unsubsidized Loan you must be enrolled in a undergraduate or graduate degree or certificate program at least half-time. The maximum borrowing limits for graduate students are $20,500 per year, while the interest rates are fixed, currently at 4.30%. There is also an origination fee deducted from the loan amount, which is currently at 1.057%. This is what the lender charges for processing and organizing your loan.

Grad PLUS Student Loans

A second possibility for graduate students are Grad PLUS student loans. While Direct Unsubsidized Loans are available to both undergraduate and graduate students and have a fixed interest rate, Grad PLUS loans are specifically for graduate and professional degree students and have a higher interest rate. Furthermore, this last option will allow you to borrow more money than what your could do with a Direct Unsubsidized Loan.

To start the application process for a Grad PLUS loan, you must first complete the Free Application for Federal Student Aid (FAFSA). Once approved for a Grad PLUS loan, you must then complete a Master Promissory Note (MPN), where you declare that you will repay your loan to the U.S. Department of Education.

When considering the eligibility requirements, they include being enrolled at least half-time in a graduate program and not having an adverse credit history. Lastly, as already mentioned, interest rates for Grad PLUS loans are higher than those for direct student loans. Also in this case, there is a loan origination fee.

Private Student Loans for Grad School

For international students who do not have a US citizenship, it may be useful to consider a third option. When looking for private student loans as a graduate student, it's very important to shop around and compare rates and loan terms from different lenders. This will help you find the best loan deal for your specific financial situation. Once you have identified potential private lenders, review their policies to ensure they align with your needs and preferences.

Before beginning the application process for a loan, remember that it's crucial to prequalify and see the estimated interest rates. This will give you an idea of what to expect and help you make an informed decision. When you're ready to move forward, apply directly on the lender's website. Be sure to have all necessary documentation and information on hand to streamline the process.

Choosing the best option

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We have discussed the main features of three loan types for graduate students. However, what are the pros and cons of each of them? Overall, Direct Federal loans offer fixed interest rates and flexible repayment options, making them a great option for many graduate students. On the other hand, Grad PLUS loans have wider maximum loan limits, but they come with higher interest rates and fees. Private loans may also be a good solution, especially for students who have exhausted their federal loan options or do not have a US citizenship, but it's important to shop around and compare interest rates and loan terms before making a decision.

I know that choosing a loan, and specifically a private one, can be overwhelming. If you feel like that, I have good news! Keep reading to discover SuperMoney, a platform that can make shopping for private loans easier and more manageable. By using this platform, you will be able to make an aware decision when choosing the loan option that works best for you. 

Why SuperMoney is a great tool

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SuperMoney is a comprehensive financial services platform that helps individuals make informed choices when it comes to money. These include finding the best loans, credit cards, or insurance, and much more.

Considering graduate student loan, SuperMoney can assist you in several ways. Firstly, it allows users to compare interest rates from different private lenders to ensure they are getting the best deal. Additionally, it is a great tool if you are considering refinancing your current loan (i.e., repaying it by borrowing a second loan at a usually lower interest rate). Trough the platform, you will get in touch with a variety of lenders and will be able to make the best decision based on your circumstances.

SuperMoney evaluates student loan options that are proposed to you based on several factors, such as interest rates, fees, eligibility requirements, and customer satisfaction. This is a thorough evaluation process that has helped many borrowers around the world to select the right loan for their graduate studies. By using SuperMoney's platform, you will also confidently navigate the financial sides of your graduate school journey.

Frequently Asked Questions (FAQs)

After reading all this information, you may still have some doubts on the topic. In this final section of the article, we'll answer some of the most frequently asked questions about loans for graduate students. Let's dive in.

Can you use a graduate student loan for covering living costs?

Yes, both federal student loans and private loans can be used to cover living costs such as rent, utilities, transportation, and food. Federal graduate student loans offer flexibility in how the funds can be used, with the remaining loan amount after tuition and fees are paid being distributed to the student for living expenses. Private graduate student loans, on the other hand, may require a specific request for living expenses to be included in the loan amount, and any leftover funds after tuition and fees are paid can then be used to cover living costs.

Can I borrow multiple loans at the same time?

Yes, grad students can borrow multiple loans at the same time, including both federal and private options. 

When determining the total amount of loans you can borrow, it's important to first exhaust federal loan options due to their lower interest rates and more flexible repayment options. The borrowing limits for federal student loans are outlined by the Department of Education, and they vary depending on the type of loan and the student's dependency status.

For private student loans, the borrowing limits are set by the individual lender and are typically based on the cost of attendance minus any other financial aid received. It's important to carefully consider the interest rates and repayment terms of private loans before borrowing, as they may not offer the same benefits as federal loans.

Overall, graduate students can borrow both federal and private loans simultaneously, but it's crucial to carefully consider the total amount borrowed and the loan terms to ensure manageable repayment after graduation.

What if my application for graduate student loan gets rejected?

If your application for a graduate student loan, whether it be a private or federal one, gets rejected, there are several reasons why this may have happened. It could be due to not meeting the eligibility requirements or falling short in certain criteria such as credit score, income, or enrolment status.

When faced with a loan rejection, it's important to explore alternative funding options such as scholarships, grants, or part-time work. Additionally, speaking with a financial aid advisor or your institution's financial aid offices can provide valuable insight and guidance on how to navigate the situation. They may be able to help you understand the reasons for the rejection and provide suggestions for next steps.

It's important not to get discouraged if your loan application is rejected. With careful consideration of the reasons for the rejection, exploration of alternative funding options, and seeking guidance from a financial aid advisor, you can still find a way to fund your graduate education.


We have reached the end of this article. Today, you have learnt that, while funding graduate school may seem daunting, there are many loan options available to help you achieve your dream degree program. While taking on debt can be intimidating, remember that the potential professional and academic benefits of pursuing a graduate degree can outweigh the loan cost in the long run. Graduate school can open doors to new career opportunities, higher earning potential, and personal growth. With determination and resourcefulness, students can find the financial support they need to make their graduate school aspirations a reality. In a few words, there is always a way to make the dream of graduate school a reality, and the rewards of the experience can be well worth the investment.

Good luck with your graduate school journey!

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