Graduate school can be a huge step toward building your career, but it’s expensive. Between tuition, fees, and living costs, the bills can pile up quickly. Most students rely on loans to cover these costs, but finding the right one is key. You want a loan that offers low-interest rates and gives you flexibility when it’s time to pay it back.
In this article, we’ll look at five of the best graduate student loans available. These options offer low-interest rates and flexible repayment plans to help make your financial load easier.
Why Graduate Students Need Different Loans
Graduate students often face more financial challenges than undergraduates. Many have existing student loan debt from their undergrad studies, while others might be balancing a job or family. Graduate school costs can be higher too. Finding the right loan, one that offers low-interest rates and flexible repayment options can make a big difference.
Here are the top five loan options to help you cover the costs of grad school.
1. Federal Direct Unsubsidized Loan
Interest Rate: 5.50% (for graduate students)
Flexible Repayment Plans: Yes
The Federal Direct Unsubsidized Loan is a top choice for many grad students. This loan has a low-interest rate and offers several repayment plans, allowing you to choose how you pay it back. Plus, you don’t need a cosigner or a credit check to qualify.
Why It’s Good:
Low interest: At 5.50%, it’s a great rate for a federal loan.
Repayment options: You can choose income-driven repayment plans, which adjust based on your salary after school.
Deferred payments: You can delay payments while you’re in school and even ask for pauses later if needed.
What to Watch For: Interest starts building up as soon as the loan is disbursed, even while you’re in school, so your loan amount will grow if you don’t make payments during that time.
2. Grad PLUS Loan
Interest Rate: 8.05%
Flexible Repayment Plans: Yes
The Grad PLUS Loan is another federal option, but it allows you to borrow up to your school’s full cost of attendance, making it ideal for students in high-cost programs. Although the interest rate is higher than other federal loans, it offers the flexibility to cover everything you need.
Why It’s Good:
No borrowing limit: You can borrow as much as needed to cover your school expenses after other financial aid is applied.
Repayment options: You can use income-driven repayment plans and defer payments while in school.
Deferred payments: Payments can be delayed as long as you’re enrolled at least half-time.
What to Watch For: The 8.05% interest rate is higher than other loans, so be careful not to borrow more than necessary.
3. Sallie Mae Graduate Student Loan
Interest Rate: 5.50% – 13.83% (variable) or 6.25% – 11.48% (fixed)
Flexible Repayment Plans: Yes
Sallie Mae offers private loans for grad students. These loans can help if you’ve maxed out federal loans. They offer both variable and fixed interest rates, giving you options depending on what works best for you.
Why It’s Good:
Multiple repayment plans: You can start payments right away, pay interest only, or defer until after graduation.
No hidden fees: No fees for applying or paying off the loan early.
Low rates for good credit: If you have good credit, Sallie Mae offers some of the lowest private loan rates available.
What to Watch For: The interest rate depends on your credit, so if you don’t have a strong credit score, you may end up with a higher rate.
4. Discover Graduate Student Loan
Interest Rate: 5.99% – 12.99% (variable) or 6.49% – 11.49% (fixed)
Flexible Repayment Plans: Yes
Discover offers competitive private loans for graduate students with no fees attached. They also provide a unique opportunity: a cash reward for maintaining a high GPA.
Why It’s Good:
Repayment options: You can choose to start paying interest while in school or defer payments until after you graduate.
GPA reward: If you keep a GPA of 3.0 or higher, you can get a cash reward.
No fees: No origination or late fees, which makes it easier to plan your budget.
What to Watch For: Your interest rate depends on your credit score, so those with lower credit could see higher rates.
5. SoFi Graduate Student Loan
Interest Rate: 4.99% – 9.99% (fixed) or 5.25% – 9.95% (variable)
Flexible Repayment Plans: Yes
SoFi is known for its low-interest rates, especially if you have good credit. But beyond loans, SoFi also offers career coaching and financial planning services to help students succeed after graduation.
Why It’s Good:
Low-interest rates: If you have strong credit, SoFi offers some of the best rates.
Extra benefits: Career coaching, financial advice, and networking events come with the loan.
No fees: No origination or application fees.
What to Watch For: SoFi is best for borrowers with good credit. If your credit isn’t great, you may end up with higher rates.
How to Choose the Best Loan
When choosing the right loan for grad school, focus on three key factors: interest rates, repayment options, and any promo the loan offers. Here are a few tips to guide you:
1. Start with federal loans: They tend to have lower rates and better repayment flexibility.
2. Compare interest rates: Even a small difference in rates can save you a lot of money in the long run.
3. Look at your future income: Consider loans that offer income-driven repayment plans if your expected salary after school isn’t high.
4. Check for perks: Some loans offer bonuses, like cash rewards for good grades or extra services like career coaching.
Conclusion
Graduate school can be costly, but with the right loan, you can manage the expenses without overwhelming debt. Whatever loan you pick make sure the loan fits your financial situation and offers flexibility.
Remember, the best loan isn’t just about the lowest interest rate. It’s about giving yourself room to breathe financially, so you can focus on your education and career, not just how to pay off your debt.