Funding your education as a grad student is a bit different than undergraduate financing. You may be familiar with grants, loans, work study, and scholarships, but you should know what’s different about graduate student loans, and the unique funding options available to graduate students.
Financial Aid for Graduate School
Financial aid is available for grad students, in addition to any savings you may have, or employer tuition assistance. It is important to note that as a grad student, you are considered an independent student. This means federal loan limits are higher and you are not required to leverage your parents’ information to qualify for aid.
But don’t fall into the trap of thinking that grants and scholarships are not available at the graduate level. You may just need to search differently for available resources, and understand the new resources available to you as a potential grad student, which we cover below.
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Filing the FAFSA for Grad School
First things first; even when it comes to graduate school, you want to start with filing the Free Application for Federal Student Aid (FAFSA®). Just like with undergraduate financial aid, the FAFSA is required to qualify for federal, state, and financial aid administered by your graduate school. As a graduate student you may qualify for the following federal student loans:
Submit your FAFSA form as early as possible on or after October 1 to maximize your eligibility for student aid.
Students attending graduate school or professional school are handled differently on the FAFSA than undergraduate students.
Nearly all graduate students qualify as independent students. This means that parent financial information is not required to complete the FAFSA. (Some medical and law schools do require parent information for independent students.) Only your income will be considered on the FAFSA, and if you’re like most independent, graduate students your EFC (expected family contribution) will be lower than what was expected for undergraduate school. If you are married, you’ll have to report your spouse’s income and asset information as well.
Types of Grad School Financial Aid
Here is a breakdown of each type of aid or loan program available to graduate students, along with a description of how to qualify and apply.
Federal Student Loans for Grad School
Qualifying for any federal loan starts with completing the FAFSA. Depending on your school, you may also be required to submit supplemental forms such as the CSS Profile. Review your copy of the Student Aid Report, await the award letter from your school and then apply for the loans you’ve been determined eligible to receive. The amounts you qualify for will be listed.
Grad School Grants
Grant programs such as FSEOG (Federal Supplemental Educational Opportunity Grant) and TEACH (Teacher Education Assistance for College and Higher Education) require submission of the FAFSA. From there, the financial aid office will award grants to students who qualify. Also, check with your school about any local or institutional-based grant programs that may exist outside of federal options.
Private Loans for Graduate Students
We always advocate that you file the FAFSA to exhaust federal aid options first. However, private loans can be very competitive in terms of the lower interest rates and other perks that may be offered by lenders. We advocate you do your own comparison. Do keep in mind that the credit review process will be stricter than that of the Federal Grad PLUS program, but cosigners can be leveraged.
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Graduate Assistantships
An assistantship typically involves teaching or conducting research under the supervision of a professor or faculty member. Often, assistantships pay a stipend to those pursuing graduate and post-graduate education. Some positions may also include benefits and housing. Inquire with your instructors or academic department chair for starters.
Scholarships and Fellowships
There are many places to start your search for scholarships and fellowships. In addition to your campus, department chair, and local community organizations, there are many online resources available for expanding your search, including popular scholarship search sites like U.S. Department of Labor, Petersons, BigFuture, and Fastweb.
Military Aid
In addition to the GI Bill which provides former service members (or in some cases, their family members) with assistance, qualified individuals may also be able to tap into things like the Iraq & Afghanistan Service Grant. You can visit the U.S Department of Veterans Affairs website, or visit your local or regional office to confirm eligibility for education benefits.
Compare Graduate School Loans
The most common types of low-interest loans used by graduate and professional school students include the Direct Unsubsidized Loan, the Grad PLUS Loan and private student loans. The Direct Unsubsidized Loan for graduate students and the Grad PLUS Loan are both unsubsidized loans. Graduate students have not been eligible for Direct Subsidized Loans since July 1, 2012, Graduate students remain eligible for the Perkins Loan, a subsidized loan, dependent on the college’s policies.
| Direct Unsubsidized Loan | Grad PLUS Loan | Private Student Loan | |
|---|---|---|---|
| Annual Limits | Up to $20,500/year | Cost of Attendance - Aid | Cost of Attendance - Aid |
| Cumulative Limits | $138,500 or $224,000 |
None |
Varies by Lender
Varies by Degree and Academic Major
|
| Funds Disbursed to the School |  |
 |
|
| Cosigner Required? |  |
|
|
| Credit Criteria | None | Borrower may not have an Adverse Credit History |
Credit Scores
Debt-to-Income Ratios
No Adverse Credit History
|
| Requires School Certification | |
|
|
| FAFSA Required? | |
|
|
| Lender | Federal Government | Federal Government | Private Lenders and Financial Institutions |
| Interest Rate Type | Fixed | Fixed | Fixed and Variable Options |
| Interest Rate | Fixed at 8.08% for the 2024 - 2025 academic year | Fixed at 9.08% for the 2024 - 2025 academic year | Depends on Borrower and Cosigner Credit |
| Rate Reduction for Auto Debit | 0.25% | 0.25% | Varies by Lender |
| Deductible Interest | |
|
|
| Subsidized Interest | |
|
 |
| Loan Fees | 1.057% for loans borrowed Oct. 1, 2024 - Sept. 30, 2025 |
4.228% for loans borrowed Oct. 1, 2024 - Sept. 30, 2025 |
Varies by Lender and Borrower Credit
Typically, 0% to 5% of the amount borrowed
|
| Prepayment Penalties | None | None | None |
| Interest Capitalization | Once at Repayment | Once at Repayment | Monthly, Quarterly, Annually or Once at Repayment |
| In-School and Grace Period Deferment |
Immediate Repayment
Full Deferment
|
Immediate Repayment
Full Deferment
|
Immediate Repayment
Interest-Only Payments
Fixed In-School Payments
Full Deferment
|
| Forbearance Options | 3 years | 3 years | 1 year |
| Repayment Term |
Varies by Repayment Plan and Loan Balance
10 to 30 years
|
Varies by Repayment Plan and Loan Balance
10 to 30 years
|
Varies by Lender
5 to 25 years
|
| Repayment Plans | Standard, Extended, Graduated, ICR, IBR, PAYE, REPAYE | Standard, Extended, Graduated, ICR, IBR, PAYE, REPAYE | Varies by Lender |
| Death Discharge | Yes | Yes | Varies by Lender |
| Disability Discharge | Yes | Yes | Varies by Lender |
| Public Service Loan Forgiveness | |
|
|
| Can be Consolidated? |
Yes
Does Not Relock Rate
|
Yes
Does Not Relock Rate
|
Varies by Lender
Rate Based on Current Credit
|
| Bar Study, Medical Residency and Relocation, and Dental Residency and Relocation Loans | |
|
|
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How to Pick the Best Graduate Student Loans
Always start with the Direct Unsubsidized Loan for graduate students. This graduate student loan is available to most graduate and professional students, since eligibility does not depend on the borrower’s credit history. It also does not require a cosigner. The Direct Unsubsidized Loan has a low, fixed interest rate and flexible repayment terms.
If a student has exhausted eligibility for the Direct Unsubsidized Loan, there are a couple of options for additional financing: the Grad PLUS Loan and Private Student Loans for graduate students.
Limits on Financial Aid for Graduate School
There are both annual and aggregate loan limits for graduate student loans. This is true for both federal and private student loans. For federal loans, the following limits are in effect for graduate/professional students:
| Loan Type | Annual Limit | Aggregate Limit |
|---|---|---|
| Direct Unsubsidized (Stafford) | $20,5000; $40,500 for medical and health professions students | $138,500*; $224,000 for medical and health professions students |
| Grad PLUS | Cost of attendance, minus other aid | None |
| Private Loans | Varies by lender; usually limited to cost of attendance | Varies by lender; could be as high as $300,000 to $500,000 |
*This includes undergraduate debt which is capped at $65,500
Check out our other articles about paying for graduate school.