What are the best loans for graduate school?
1. Federal graduate student loans
Borrowers are eligible for two types of federal loans for graduate school: unsubsidized direct loans and grad PLUS loans.
Federal direct unsubsidized loans limit the amount you can borrow to $20,500 annually and $138,500 overall, including undergraduate loans. But these loans have lower interest rates and fees than PLUS loans, so opt for unsubsidized loans before graduate PLUS loans.
Federal grad PLUS loans have higher interest rates and fees than direct unsubsidized loans, but you can borrow more money — up to your total cost of attendance, minus other aid received. Use grad PLUS loans if you’ve maxed out your federal direct unsubsidized loans and still want to use federal loans to pay for graduate school.
You can apply for federal loans for graduate school by completing the Free Application for Federal Student Aid, or FAFSA.
2. Ascent Graduate Student Loan
While federal interest rates are historically low for the 2020-21 academic year, you still may get a better rate with a private graduate student loan. You’ll almost certainly pay less in fees: Grad PLUS loans come with an origination fee of more than 4%, while most private lenders don’t charge these fees.
Ascent’s graduate student loan stands out due to its flexibility. The lender offers a nine-month grace period and 24 months of forbearance — both of which are longer than many other lenders provide.
3. College Ave Graduate Student Loan
College Ave is a good choice if you’re working your way through graduate school. Unlike many lenders, including the federal government, College Ave offers graduate student loans if you’re attending school less than half-time.
In addition to Ascent and College Ave, graduate students looking at private student loans may want to consider Discover, SoFi, RISLA and Wells Fargo. It’s best to get quotes from multiple lenders before applying to ensure you get the best rate possible.
4. Prodigy Graduate Student Loan
Prodigy is a good choice for international graduate students who don’t have a U.S. citizen co-signer. You can qualify for a Prodigy graduate student loan without a co-signer; lending decisions are based on your future income, rather than your current financial situation. Prodigy only offers variable-rate loans, which are riskier than fixed-rate options, and doesn’t lend to borrowers in all 50 states.
5. Stride Funding Income Share Agreement
An income share agreement, or ISA, is not a student loan, but graduate students may be able to use one to finance their education. Stride Funding prioritizes lending ISAs to graduate students, particularly those in STEM and health care fields.
With an ISA, you promise to pay a percentage of your future income in exchange for upfront funding. You may repay more or less than you receive. Be sure to compare ISAs and student loans to understand their potential costs before borrowing.
Which graduate student loan is best for you?
If you need loans to pay for graduate school, the best option will likely be federal student loans. These offer protections that private graduate school loans lack, including income-driven repayment plans and loan forgiveness programs.
Those benefits can come in handy depending on how much you owe — the average graduate student debt is $82,000, including undergraduate loans — and your career plans. For example, you may want to pursue Public Service Loan Forgiveness if you plan to get a Ph.D. and work at a university.
If you won’t work at a nonprofit or need federal benefits, compare private student loans to see what interest rate you’d qualify for. Many lenders have specific graduate student loan products based on the degree you’re pursuing:
STUDENT LOAN RATINGS METHODOLOGY
Our survey of more than 29 banks, credit unions and online lenders offering student loans and student loan refinancing includes the top 10 lenders by market share and top 10 lenders by online search volume, as well as lenders that serve specialty or nontraditional markets.
We consider 40 features and data points for each financial institution. Depending on the category, these include the availability of biweekly payments through autopay, minimum credit score and income requirement disclosures, availability to borrowers in all states, extended grace periods and in-house customer service.
The stars represent ratings from poor (one star) to excellent (five stars). Ratings are rounded to the nearest half-star.