• June 7, 2021

Graduate Student Loans: Essential Facts and Information

The choice to go to graduate school is a huge one, and one of the biggest barriers is the financial burden it imposes. With more and more students going to undergraduate universities, the pressure to improve their curriculum often leads to more schooling. The problem with this is that most students don’t graduate with $ 40,000 in their back pocket, or the ability to earn that each year while also going to school. For most, the only option is to use graduate school loans to get through these moments and hope that your higher level of education will help you pay for them.

There are a few options for obtaining tuition money through graduate student loans. The first is through the government, much like taking an undergraduate loan. The Stafford Loan is advantageous because it offers a very low fixed interest rate and does not require a credit check to qualify. Regardless, the loan will be made based on need, and depending on your or your family’s income, you may not qualify for a large enough amount to cover the tuition bill. In this case, the second option of loans for graduate students comes into play.

Private loans allow you a bit more flexibility in the institution you would like to deal with, and still offer very fair and reasonable rates. These extra loans allow people who didn’t get enough federal support to get enough to pay for their tuition, and they can also cover living expenses. A Stafford loan goes directly to tuition, but with a private loan you have the flexibility to use your money for tuition, but also for things like rent and food. Some graduate schools, especially law schools, have a maximum time allowed for each week that you can work if you choose. Often times this is not enough to pay the rent or creates too much difficulty and interferes with the school. Adding in graduate student loans from the private sector allows you much more leeway in terms of life while in school, but it also leaves you in greater amounts of debt. It is important to note that this type of loan requires a decent credit score or a person with a good score who is willing to co-sign with you.

The third option is a Graduate PLUS loan. This is a combination of private and federal loan due to the fact that it is privately managed, but backed and guaranteed by the US government. Similar to the private loan option, this is not based on need and depends on of your credit history. This type of loan also has a very flexible repayment plan and includes a slightly higher interest rate than federal standards, but is set at that rate.

Any of these three options gives you a great deal of help paying for your tuition, and they have low interest rates and the ability to pay them back after you leave school. Still, graduate student loans are not to be taken lightly and can often put students in more debt than they think. With many schools running on $ 40,000 or more, paying a total of $ 120,000 over three years, people end up paying off loans for a good part of their lives. Before deciding to take this step, determine if you are comfortable living with that amount of debt. It is important to be confident that you will gain a sufficient head start in school to start getting into serious debt as soon as you graduate. It can be a great advantage and can generate a big increase in income for the rest of your life, but student loans are not a negligible cost.

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