The Bankrate guide to choosing the best graduate school loans
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When shopping for a graduate student loan, compare APRs across multiple lenders to make sure you’re getting a competitive rate. Also look for lenders that keep fees to a minimum and offer repayment terms that fit your needs. Loan details presented here are current as of the publish date. Check the lenders’ websites for more current information. The graduate student loan lenders listed here are selected based on factors such as APR, loan amounts, fees and repayment options.
The best graduate student loans in 2021
| Department of Education: Direct Unsubsidized Loan |
4.3% fixed
|
10 – 25 years
|
Not specified
|
$20,500 per year (lifetime limit $138,500)
|
| Ascent |
Fixed: 3.26% – 13.41% (with autopay); Variable: 2.11% – 11.87% (with autopay)
|
7 – 20 years
|
$2,001
|
$200,000
|
| Citizens Bank |
Fixed: 4.04% – 11.4%; Variable: 1.36% – 11.11%
|
5 – 15 years
|
$1,000
|
$350,000
|
| College Ave |
Fixed: 4.24% – 11.98% (with autopay); Variable: 1.89% – 10.97% (with autopay)
|
5 – 20 years
|
$1,000
|
100% total cost of attendance ($150,000 maximum for some programs)
|
| Department of Education: Grad PLUS loan |
5.3% fixed
|
10 – 25 years
|
Not specified
|
100% total cost of attendance
|
| Discover |
See rates above
|
20 years
|
$1,000
|
Up to 100% of school-certified costs. Aggregate loan limits apply.
|
| Sallie Mae |
Fixed: 4.75% – 12.11% (with autopay); Variable: 2.12% – 11.64% (with autopay)
|
15 – 20 years
|
$1,000
|
100% total cost of attendance
|
| SoFi |
Fixed: 4.13% – 11.52% (with autopay); Variable: 1.77% – 11.89% (with autopay)
|
5 – 15 years
|
$5,000
|
100% total cost of attendance
|
Summary: Graduate school loan options in April 2021
How has the coronavirus impacted graduate student loans?
Graduate student loans are one of the many financial products that have been affected by the coronavirus pandemic. Most notably, interest rates have gone down in recent months, with federal student loan rates for the 2020-21 school year at record lows and private student loan rates lowering in response.
Federal borrowers have also benefited from the CARES Act and subsequent extensions, which have put a pause on student loan payments and interest charges through Sept. 30, 2021 — meaning borrowers with federal graduate school loans are not obligated to make payments until at least October.
What can graduate school loans be used for?
Depending on the lender, student loans are available for various types of advanced degrees, including:
Some types of degrees are more expensive than others. Lenders usually increase loan amounts accordingly, and they may adjust APRs to match risk. Loan funds can typically pay for eligible expenses that are either directly or indirectly related to your education. Some of these include:
- Tuition and fees.
- Room and board.
- Books and supplies.
- Computers and electronics for school.
- Travel costs.
Using federal vs. private student loans for graduate school
When you need to borrow money to pay for school, you have two main options: federal student loans and private student loans. There are pros and cons of each option, though in some cases you may need to borrow a little of both.
Federal graduate student loans
Federal student loans are originated by the U.S. Department of Education and are loaded with borrower protections and flexibility. Within this program, graduate students can choose between a Direct Unsubsidized student loan and a grad PLUS loan.
You can borrow up to $20,500 each school year with a Direct Unsubsidized student loan, with a $138,500 aggregate limit. A grad PLUS loan allows you to borrow more — up to 100 percent of the cost of attendance. In general, it's best to maximize your unsubsidized loan options first, as interest rates are typically lower than those of grad PLUS loans. Additionally, you must go through a credit check for grad PLUS loans, which is not the case for Direct Unsubsidized Loans.
To apply for either of these loans, you'll have to complete the FAFSA, which opens on Oct. 1 each year. If you're applying for a grad PLUS loan, you'll also have to fill out a separate application once the FAFSA is complete. If this is your first time receiving a Direct Loan or grad PLUS loan, you'll be required to complete entrance counseling.
Pros:
- Flexible repayment options, including income-driven repayment plans.
- The same fixed rates for all borrowers, regardless of credit score.
- Borrower protections, including deferment and forbearance options and potential loan forgiveness.
Cons:
- Relatively low loan limits for Direct Unsubsidized Loans.
- Origination fees.
- Potential for garnishment of wages or tax refunds if you default.
- Potentially higher interest rates than with private lenders if you have good credit.
Private graduate student loans
Private student loans are originated by private institutions, such as banks, credit unions and online lenders. You have dozens of options to choose from, but each lender sets its own rates, terms and eligibility requirements. Rates are commonly anywhere from 3 percent to 15 percent and can be fixed or variable. The exact rate you're quoted depends on your credit score and financial profile. As such, you'll have to go through a hard credit check in order to be approved for a loan.
Unlike with federal student loans, you'll generally have a range of repayment terms to choose from with private lenders, usually between five and 20 years.
Pros:
- Zero fees with many lenders.
- Lower interest rates if you have a good credit score.
- Choice between fixed and variable interest rates.
- High loan limits.
Cons:
- No defined hardship plans.
- No income-driven repayment or forgiveness plans.
- Harder to qualify with poor credit.
| APR |
4.3% – 5.3% fixed |
3.26% – 13.41% fixed; 1.36% – 11.89% variable |
| Fees |
Origination fees of 1.057% – 4.228% |
Varies by lender; often only late fees |
| Borrowing limits |
Direct Unsubsidized Loan: Up to $20,500 per year; Grad PLUS loan: Up to 100% total cost of attendance |
Up to 100% total cost of attendance |
| Repayment terms |
10 to 25 years |
5 to 20 years |
How to get a graduate school loan
The process for getting a loan for graduate school differs depending on the type of loan you're applying for.
To get a federal student loan:
- Fill out the FAFSA.
- Receive your financial aid package.
- Apply online (for grad PLUS loans).
- Complete entrance counseling and sign the Master Promissory Note (if this is your first time receiving a Direct Loan).
- Wait for funds to be distributed to your school; any extra money will be given directly to you.
To get a private student loan:
- Compare and get prequalified with a few lenders.
- Send in an application to your preferred lender and go through a hard credit check.
- Submit financial information and other verification documents.
- Receive loan funds or wait for funds to be distributed to your school.
How to defer student loan payments in grad school
Many lenders do not require you to make payments on your full loan balance until after your grace period ends — usually around six months after you graduate. In many cases, you have the option to make a flat minimum payment each month or make interest-only payments until your grace period ends.
However, depending on your circumstances, you may also need to apply for deferment. A deferment lets you temporarily reduce or postpone payments on your student loan. While most lenders offer this option, details will vary.
On most loans, you can defer payments while you’re in graduate school or entering an internship, clerkship, fellowship or residency. Interest may still accrue while the loan is in deferment and may even be "capitalized," or added to the balance afterward. This will increase your total loan cost.
To defer your student loan payments while in grad school, first read your loan terms. Check for:
- A limit to the number of months you can defer payments.
- Any fees you'll pay.
- Eligibility requirements (e.g., being enrolled at least half time).
- Whether interest will accrue and capitalize.
- How the lender will report your account to the credit bureaus while in deferment.
Reach out to your loan servicer and ask about next steps. Typically, you'll need to:
- Submit a deferment form and have it verified by an official from your school, internship, clerkship, fellowship or residency program.
- Continue making loan payments until the loan servicer confirms that the request has been approved.
- Renew the request if needed.
Then you can ask to have the deferment removed when you're ready to start making full payments again.
Details: Best graduate student loan rates in 2021
Best overall: Department of Education – Direct Unsubsidized Loan
Overview: Federal student loans are originated by the U.S. Department of Education and are available to students seeking most types of undergraduate and graduate degrees. Although loan amounts are lower and interest rates higher compared with some private lenders, the federal program offers the strongest borrower protections and most flexible repayment options available.
Perks: Borrowers can choose from seven repayment plans, some of which base your monthly payment on a percentage of your discretionary income. The interest rate is fixed over the life of the loan, and these loan terms generally make borrowing more affordable. You also get much better deferment and forbearance options than you would with private student loans. Plus, borrowers won't need a credit history or co-signer to qualify.
What to watch out for: Borrowers pay an origination fee with Direct Unsubsidized Loans, although it's lower than the federal grad PLUS loan's origination fee. The Direct Unsubsidized Loan also has a low loan limit, so it may not be enough to cover all of your school costs.
| Department of Education – Direct Unsubsidized Loan |
| 4.3% fixed |
| Up to $20,500 per year ($138,500 aggregate limit) |
| 10 – 25 years |
| Origination fee: 1.057% |
Best if you don’t have a co-signer: Ascent
Overview: Ascent is an online lender that offers student loans for borrowers with or without a co-signer. Ascent doesn't just look at your creditworthiness; it also considers your school, program, GPA and cost of attendance when approving you for a loan. Check your personalized rates from Ascent today.
Perks: Ascent's hardship options are stronger than what some other lenders offer. You can apply for forbearance between one and three months, for a maximum of 24 months over the life of the loan. The lender also offers opportunities to apply for scholarships and earn several types of rewards.
What to watch out for: Ascent has some of the highest APR caps among lenders on this list, though you may be able to save money by getting a co-signer or paying off your loan early.
| Ascent |
| Fixed: 3.26% – 13.41% (with autopay); Variable: 2.11% – 11.87% (with autopay) |
| $2,001 – $200,000 |
| 7 – 20 years |
| None |
Best for multiyear approval: Citizens Bank
Overview: Citizens Bank is a traditional bank that offers private student loans for graduate students seeking master's, business, medical, law and health care degrees. Its unique multiyear approval process allows you to secure funding for each year of school with just one application.
Perks: Once you apply for a loan, Citizens Bank will let you know if you qualify for multiyear approval. In subsequent years, you'll just request funds — without going through a hard credit pull or submitting additional documentation. Citizens also has one of the lowest advertised APRs on this list and offers a loyalty discount if you or your co-signer have a qualifying checking or savings account.
What to watch out for: Checking and savings accounts are only available in 11 states that are mostly located in the Northeast. If you don't live near a branch, you might not be able to get the loyalty discount.
| Citizens Bank |
| Fixed: 4.04% – 11.4%; Variable: 1.36% – 11.11% |
| $1,000 – $350,000 |
| 5 – 15 years |
| None |
Best for quick application process: College Ave
Overview: College Ave is an online lender that offers private student loans to graduate students earning postgraduate, master's, doctoral or professional degrees. The lender specializes in a simple application process with an instant decision.
Perks: Altogether, College Ave says that the application process takes three minutes. Borrowers can check their potential loan terms and whether they prequalify for a loan without impacting their credit. Borrowers are eligible even if they attend school less than half time, which allows for more flexibility.
What to watch out for: College Ave's forbearance is shorter than that of some other lenders, offering only up to 12 months over the life of the loan. This may cause problems if you need to postpone payments due to financial difficulties later on.
| College Ave |
| Fixed: 4.24% – 11.98% (with autopay); Variable: 1.89% – 10.97% (with autopay) |
| $1,000 – 100% total cost of attendance ($150,000 maximum for some programs) |
| 5 – 20 years |
| None |
Best high-limit federal loan: Department of Education - grad PLUS loan
Overview: Borrowers who have maxed out their Direct Unsubsidized Loans may wish to apply for a grad PLUS loan, which lets you take out up to 100 percent the cost of your education. These loans require an additional application, but they come with the same federal benefits as Direct Unsubsidized Loans — income-driven repayment plans, hardship options and potential loan forgiveness.
Perks: Along with their high borrowing amounts, grad PLUS loans have a wide range of repayment options, generally from 10 to 25 years. And if you have poor credit, a grad PLUS loan may be cheaper than a private loan — the interest rate is currently 5.3 percent, while some private lenders set loan caps at 12 or 13 percent.
What to watch out for: You will need to go through a credit check in order to get a grad PLUS loan. If you have an adverse credit history, you will need to obtain an endorser for your loan or provide details about extenuating circumstances relating to your credit history. In both cases, you will also have to complete credit counseling.
| Department of Education - grad PLUS loan |
| Fixed: 5.3% |
| Up to 100% total cost of attendance |
| 10 – 25 years |
| Origination fee: 4.228% |
Best for flexible repayment options: Discover
Overview: Discover is a bank that offers private student loans to grad students pursuing master's degrees, business degrees, medical degrees, law degrees, residency programs, internship programs and bar exam prep. It's a good lender for students who want to make sure that they'll have flexible repayment options down the road.
Perks: Students who are financially struggling after graduation can access a wide range of repayment assistance programs. If you qualify, you may be able to get reduced payments, forbearance for up to 12 months, payment extensions and interest rate reductions. Discover also offers a one-time cash reward for earning good grades, a reward when you graduate and a discounted APR when you enroll in interest-only payments during school.
What to watch out for: The only repayment term is 20 years, which doesn't offer as much flexibility as other lenders.
| Discover |
| See rates above |
| $1,000 – up to 100% of school-certified costs. Aggregate loan limits apply. |
| 20 years |
| None |
Best for part-time students: Sallie Mae
Overview: Sallie Mae offers private student loans to graduate students seeking master's or doctoral degrees, and they're available even if you're enrolled less than half time. It's a standout option if you want to take just a few classes at a time or you work on the side.
Perks: Borrowers can be enrolled in school less than half time and may defer payments in 12-month increments, up to 48 months total. Forbearance is also available for up to 12 months over the life of the loan. Sallie Mae provides a free quarterly FICO credit score, which can help you track your overall credit health.
What to watch out for: Sallie Mae offers only one repayment term for each degree: 20 years for medical and dental school loans and 15 years for MBA, law, health professions and general graduate school loans.
| Sallie Mae |
| Fixed: 4.75% – 12.11% (with autopay); Variable: 2.12% – 11.64% (with autopay) |
| $1,000 – 100% total cost of attendance |
| 15 – 20 years |
| Late fee: 5% or $25; Returned check fee: up to $20 |
Best low APR: SoFi
Overview: SoFi is an online lender that offers private student loans for graduate degree programs, law school and business school.
Perks: SoFi offers some of the lowest APRs on this list, which can save you money over the life of the loan. Plus, you can benefit from a unique unemployment protection program: If you lose your job through no fault of your own, SoFi will suspend monthly payments in three-month increments (up to 12 months total) and provide job placement assistance.
What to watch out for: SoFi's minimum loan size is higher than that of most lenders, so it may not be the best choice if you have minimal financial needs.
| SoFi |
| Fixed: 4.13% – 11.52% (with autopay); Variable: 1.77% – 11.89% (with autopay) |
| $5,000 – 100% total cost of attendance |
| 5 – 15 years |
| None |
Frequently asked questions about graduate student loans
Do graduate students qualify for subsidized loans?
As of July 1, 2012, graduate students are not eligible for subsidized loans. However, if you took out a subsidized loan before this time, that loan will still count toward your aggregate loan limits.
What is the average interest rate for graduate student loans?
The interest rate for federal graduate student loans is 4.3 to 5.3 percent. The average interest rate for private graduate student loans is 3.26 percent to 13.41 percent fixed and 1.36 percent to 11.89 percent variable.
How much can I borrow in graduate student loans?
Many private student loan lenders will let you borrow up to the full cost of education, minus any financial aid received. However, you may be subject to aggregate limits based on your degree program. If you're taking out a federal loan, you may borrow up to $20,500 per year in Direct Unsubsidized Loans or up to the full cost of attendance with grad PLUS loans.
What is PSLF and what loans does it apply to?
Public Service Loan Forgiveness (PSLF) is a federal program that forgives your student loans after you make 10 years of qualifying payments. To be eligible for PSLF, you must enroll in an income-driven repayment plan and work for a government or nonprofit organization.
Only federal loans are eligible for PSLF. Direct Loans are the only loans that qualify, but you may consolidate your other federal loans into a Direct Loan in order to take advantage of the program.
