The maximum amount that can be borrowed in federal PLUS loans is the difference between the cost of attendance and the rest of the financial aid received. This means that these loans can be used to fully cover the remainder of school expenses if necessary, but keep in mind that interest rates on these loans are about 2.55 percentage points higher than Direct subsidized and unsubsidized loans for undergraduates.
Federal Student Loans for Graduate School
If you already have an undergraduate degree and are attending graduate or professional school, there are additional student loans from the federal government that you can take out to finance your education.
The interest rates on these loans are about 1.55 percentage points higher than undergraduate federal student loans and do not depend on your credit history.
- $20,500 annually while in graduate school
- $138,500 in total (this total includes any federal loans taken out as an undergraduate)
Graduate students also have the option of taking out additional PLUS loans. These are very similar in terms and conditions to the parent PLUS loans that can be taken out for undergraduate education, except these loans are taken out by the student, who is now considered independent.
To be eligible for PLUS loans, you must be enrolled at least half-time in an eligible school program leading to a graduate or professional degree or certificate and meet certain credit requirements. The maximum amount you can borrow in PLUS loans is the difference between the total cost of attendance and any other financial assistance you receive.
Private Student Loans
Private student loans are another option at your disposal for funding your education. There are many reasons you might consider turning to private loans, including:
- You have maxed out all federal loan borrowing options and need additional funds. If you are an independent undergraduate student whose education costs exceed the limits of the federal subsidized and unsubsidized loans, or if you are a dependent student with parents unable or unwilling to take out a parent PLUS loan, you might hit the federal lending limits. You may also be a graduate student who is unable to qualify for PLUS loans.
- You have impeccable credit, which qualifies you for the lowest interest rates. While in general, federal student loan interest rates are among the lowest, it is possible to obtain lower interest rates on private loans if your credit is good.
- You are not a U.S. citizen or a green cardholder. In this case, you do not qualify for federal student aid or loans from the U.S. government.
- Your school or program is not eligible for federal aid. While most accredited programs in the U.S. participate in the federal student aid program, there are some exceptions. If your school does not have access to federal aid, a private loan might be the way to go.
Loan limits for private student loans can vary greatly based on both the lender and your credit history. It’s good to keep in mind that the terms associated with private student loans often aren’t as good as those for federal student loans. The federal student loan program is backed by the government and offered as a public service, whereas private lenders are in the business to make money.
Federal loans offer much more flexibility with repayment options and also include programs for loan forgiveness and click here to investigate forbearance. Private lenders are less forgiving when it comes to missing payments or running into financial problems. Always read all of the fine print when signing loan documents, and make sure you are fully informed about the terms and conditions.