Graduate Student Loans

By: EconomyWatch Content   Date: 25 November 2009

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Graduate student loans help students who do not have enough financial resources to pursue an education of their choice. Both the federal government and banks offer graduate student loans at competitive interest rates. Federal loans are mostly need-based, and you may need to demonstrate that you are a needy student. Private loans are available to any student.

Getting Graduate Student Loans - Federal Sources

When you look for graduate student loans, the first thing you should do is fill out the FAFSA (Free Application for Federal Student Aid) form. It is an application for Federal student loans. You need to provide information about any savings either you or your parents may have. Once you submit the FAFSA form, the Federal government will inform you about the contribution it expects from your family towards your education, based upon the information you have provided. You should mention all the graduate schools you are considering, so that the government sends reports to all these schools.

Getting Graduate Student Loans – Private Loans

Apply for both subsidized and unsubsidized federal loans since these loans come with the lowest interest rate possible. It is better to use the Federal loans to the maximum, so that you do not end up paying higher interest rate for private loans. However, Federal loans cannot cover the entire cost of your education. Once you exhaust all Federal government loan options, you can get the rest of the amount financed by private lenders. A Graduate PLUS Student Loan can be used for this purpose.

Usually, your graduate school will be having the list of lenders and the interest rates they charge. Since this loan and interest rates depend upon credit record, you should apply as early as possible. It is better to apply for only the required amount, so that the chances of getting the loan becomes higher

When you are looking for private loans, it is better to think about the potential ROI (Return on Investment) you will have after graduating. If you will have better job prospects which can get you higher salary, then a private loan with higher interest rates will be worth it. If you or your parents have good credit reports you might get graduate loans at a very low interest rate.


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