There are several types of low-interest loans available to students attending graduate school or professional school. Graduate student loans are similar to the undergraduate student loan programs, but often with higher annual loan limit amounts. Some loans are unique to a graduate student’s academic program of study.

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.

***************

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.

Criteria for Comparing Grad PLUS and Private Student Loans

When comparing Grad PLUS and private student loans, there are several possible criteria:

  • The Grad PLUS Loan has less strict credit criteria, making it available to more students.
  • The Grad PLUS Loan does not require a cosigner.
  • The Grad PLUS Loan has a low, fixed interest rate that is the same for all borrowers.
  • Private student loans may offer a competitive interest rate for borrowers with excellent credit.
  • Some private student loans have variable interest rates. These interest rates can increase over the life of the loan.