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Home Ask Student Aid FAQ How to Pay for Grad School

How to Pay for Grad School

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.

Graduate School Loans

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.

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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.

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 a site like our’s, StudentScholarshipSearch, and other 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
Varies by Lender
Varies by Degree and Academic Major
Funds Disbursed to the School Yes Yes  Yes 
Cosigner Required? No No  Yes
Credit Criteria None Borrower may not have an Adverse Credit History
Credit Scores
Debt-to-Income Ratios
No Adverse Credit History
Requires School Certification Yes Yes  Yes
FAFSA Required? Yes Yes  No
Lender Federal Government Federal Government Private Lenders and Financial Institutions
Interest Rate Type Fixed Fixed Fixed and Variable Options
Interest Rate Fixed at 4.30% for the 2020-2021 academic year Fixed at 5.30% for the 2020-2021 academic year Depends on Borrower and Cosigner Credit
Rate Reduction for Auto Debit 0.25% 0.25% Varies by Lender
Deductible Interest Yes Yes  Yes 
Subsidized Interest No No  No 
Loan Fees 1.059% for loans borrowed
Oct. 1, 2019 - Sept. 30, 2020
4.236% for loans borrowed 
Oct. 1, 2019 - Sept. 30, 2020
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 Yes Yes  No
Can be Consolidated?
Does Not Relock Rate
Does Not Relock Rate
Varies by Lender
Rate Based on Current Credit
Bar Study, Medical Residency and Relocation, and Dental Residency and Relocation Loans No No  Yes 

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.


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