Wherever you are in your professional and educational journey, earning your graduate degree is an empowering and worthwhile endeavor. The data continues to show that people with graduate degrees enjoy higher earning potential, are highly sought after by employers, and have the ability to take more control of their career paths.
Like with earning an undergraduate degree, going to graduate school comes at a cost—but one that can be reduced with loans, scholarships, and other forms of financial aid.
Some graduate students are wary of using student loans to pay for their master’s degree, but the truth is most graduate students leverage student loans to finance their education.
According to the Education Data Initiative, the average student loan debt for graduate school students in 2021 is about $91,000. While this may seem like a substantial amount, keep in mind that working professionals with graduate degrees also tend to earn significantly more than their counterparts with only Bachelor’s degrees.
In many ways student loans for graduate students can be seen as an investment in yourself and your future, but it’s still important to borrow carefully.
Let’s take a look at some of the most commonly asked questions about student loans for graduate school and how you can take advantage of every opportunity to reduce your costs.
Do I Need to File FAFSA to Get Graduate Student Loans?
Just like when you were an undergraduate, the first step to securing financial aid for graduate school is to file the Free Application for Federal Student Aid, commonly known as FAFSA.
The process is quite similar to the first time around, except now you most likely won’t use your parents’ financial information. In most cases, and for all SOLES programs, everything will be based on your own income and tax information.
There are two main types of federal aid graduate students can qualify for:
Direct Unsubsidized Loans
- Available to graduate students and eligibility is not based on financial need.
Grad PLUS Loans
- Available for graduate/professional students to help pay for education expenses not covered by other financial aid. Eligibility for these loans is not based on financial need, but applicants must undergo a credit check.
For complete information about federal financial aid, explore the guide to Financial Aid for Graduate and Professional Students from the U.S. Department of Education.
Can Graduate Students Get Subsidized Loans?
No. Graduate students can only take out unsubsidized loans.
The main difference is that, with a subsidized loan, the U.S. Department of Education pays the interest. However, as of July 1, 2012, grad students are no longer eligible for subsidized student loans.
Can You Get a Parent PLUS Loan for Graduate School?
No. If you’ve got parents who want to help pay for your graduate education, they should take out or co-sign on private student loans.
What Kind Of Student Loans Are Available For Graduate Students?
Now that we’ve covered some of the main differences between graduate and undergraduate loans and how the eligibility is different for grad students, let’s take a look at student loans that you actually may be eligible to take out.
Public Student Loans for Graduate School
There are a handful of public student loans that graduate students can apply for, at both the federal and state level. These are Direct unsubsidized loans and Direct Plus loans.
Direct unsubsidized loans are available for graduate students like you. These are not based on financial need and instead are awarded based on your cost of attendance and any other financial aid you receive.
These loans tend to have better repayment options and, in some cases loan forgiveness—so they’re a preferred option for many graduate students.
Direct Plus loans are available for graduate or professional students to help pay for education expenses that aren’t covered by other financial aid or tuition assistance programs.
Eligibility for these loans is not based on financial need, but if you apply for a Direct Plus loan, you must undergo a credit check.
Private Student Loans for Graduate School
You’ll also have the option to apply for private student loans, which are offered by private lenders and have a wide range of interest rates, payment schedules, and eligibility.
In addition to these options, you can take out a loan directly with your institution. Here at SOLES, for example, we offer loans for graduate and credential students for up to $2,500 per semester or $5,000 per academic year.
To be eligible, you must be in good academic standing and follow the application process. Learn more about the SOLES Loan Program and how to apply, download our guide: Investing in Your Future: How to Pay for Graduate School at SOLES.
How Much Can I Borrow As a Graduate Student?
This is one of the most commonly asked questions and the answers vary depending on your financial status, academic standing, state of residence, program, and more. Borrowing limits will also vary by loan type and depending on how much money you took out as an undergraduate.
Federal Unsubsidized Loans
Graduate students can borrow up to $20,500 each year, but you can’t take out more than $138,000 total, including any loans you took out as an undergrad.
Federal Graduate PLUS Loans
There is no specific or annual lifetime dollar limit. You can borrow up to your school’s official cost of attendance, minus other aid you’ve received.
The borrowing limit depends on the lender.
What Should Graduate Students Consider Before Taking Out a Private Student Loan? How Can I Limit My Graduate School Student Loan Debt?
Student loans, scholarships, and other forms of tuition assistance are incredibly useful ways to make enrolling in graduate school more affordable and accessible.
But how can you take advantage of these in the best way possible?
If you’re not thinking ahead and examining these financial aid options thoroughly, you may end up putting yourself in a less-than-optimal financial situation down the road.
As a rule, you should look at free sources of financial aid first before you look at loans. These may include scholarships and grants that can be offered by the institution, by the federal government, or at the state (or even local!) level.
Once you’ve exhausted those options, it’s best to look at low-cost federal loans before you take on any private loans.
Another thing to remember—and it may seem obvious—but only borrow what you need. It may be tempting to take on loans that cover every dollar of your tuition and expenses. However, if you can afford to pay some of these fees out of pocket up front, you could be saving thousands of dollars in interest after you graduate.
So, we’ll say it again: only borrow what you need!
It’s also critically important that you understand things like repayment terms, interest rates, penalties, and more before signing any loans—federal or private.
If you’re not 100% sure what the terms of your loan are or you’re having trouble navigating the complex world of financial aid, we recommend chatting with a financial aid counselor who can walk through your options with you and help you make the right decisions.
How Can I Get More Information About Financial Aid at SOLES?
To learn more about the financial aid options available at SOLES, download our free resource: Investing in Your Future: How to Pay for Graduate School at SOLES.
In this extensive guide, you’ll get expert insights into:
- How financial aid works for graduate students
- How to apply for the FAFSA as a graduate student
- The different types of financial aid and how to know which options are right for you
- Eligibility requirements and how you can maximize your aid dollars
- Financial aid options for active and retired military members
If you have questions about applying for financial aid or getting started with your application, we’d love to help you! Connect with our Admissions team or Financial Aid Office and we’ll help you take the next step on your educational journey.