How Does Graduate Loans Work

Government have borrower friendly features.

How does graduate loans work. There are two types of direct loans that graduate or professional students enrolled in a program. You can only borrow as much as needed for your cost of attendance minus any other financial aid you ve received. Federal perkins loan program. Graduate loans graduate mba law.

Under the federal perkins loan program schools become lenders to undergraduate and graduate students with exceptional financial need. These are undergraduate or graduate loans where students do not have to demonstrate financial need. Fixed rate loans will not increase or decrease over the life of the loan and have an apr range between 4 56 and 13 42. Under this program ed is your lender rather than a bank or other fnancial institution.

You also need a credit history that is free from bankruptcy tax liens repossessions. Direct plus loans also known as graduate plus loans are available if you still need money after you ve exhausted your direct unsubsidized loans which offer lower interest rates. The major difference in how loans are treated in a graduated repayment plan is the term or length of the program. With unsubsidized loans the government doesn t cover the interest interest starts building up from the minute the school gets the loan money.

Federal student loans offered through the u s. If you need loans to pay for graduate school the best option will likely be federal student loans. The current interest rate on direct unsubsidized loans for graduate student borrowers is 4 3. Your variable interest rate may increase or decrease based on libor monthly changes resulting in an apr range between 3 65 and 12 40.

Interest costs might be subsidized or paid by the government for some students. For unconsolidated loans you ll pay off your debt in 10 years but with consolidated federal student loans the term could span from 10 to 30 years. All federal student loans also have an origination fee that is taken off the top of the amount you. The subsidized loan maximum is 3 500 for freshmen 4 500 for sophomores and 5 500 for juniors and seniors.

Interest rates are relatively low and are fixed for new borrowers so you don t have to worry about dramatic changes in your interest costs or payment shock. Student loans are relatively low risk loans for lenders and. A graduate student can take out up to 20 500 in unsubsidized loans. Ford federal direct loan direct loan program.

These offer protections that private graduate school loans lack including income driven.