Graduate degree holders earn as much as $24,000 more per year than workers who have only a bachelor’s degree, we found in a recent study.
Whether you’re interested in getting an advanced degree to earn more money, switch career trajectories, follow your passions or all of the above, chances are your investment in grad school will pay off.
But to get the best return on that investment, you’ll want to limit your graduate school loans and borrowing costs. This means choosing low-cost grad school loans with the right features and terms to meet your needs.
Here’s how you can get started, along with the best loans for graduate school available today.
4 factors you should look for in graduate school loans
Whether your goal is to keep your debt manageable while you’re enrolled or to pay off your student loans as quickly as possible, you’ll want to choose grad school loans that work with your priorities. These could be private loans or federal loans (discussed below).
The best grad school loans offer low interest rates and fees, as well as flexible options that allow you to borrow and repay how you want. As you’re shopping around for loans for graduate school, pay close attention to the following features:
1. Low rates and fees
Graduate students borrow $13,151 per year on average, according to Sallie Mae’s 2017 “How America Pays for Graduate School” report. That’s three times the amount undergraduates typically borrow.
Because student loan balances are so high, every bit you can save from lower interest rates and fees helps. Follow these tips to find the most cost-effective grad school loans:
- Watch for charges such as origination fees and application fees, which aren’t always advertised as openly as some of the more beneficial loan features.
- Pay attention to advertised rates on student loans for graduate school. Keep in mind that advertised rates are the best the lender offers, so unless you have perfect credit, you’ll usually pay more. Check the fine print on advertised rates that can alert you to discounts that might be baked into these comparisons as well.
- Collect rate quotes from lenders — they generally use soft credit checks for this to avoid dinging your credit. You’ll get offers for graduate school loans tailored specifically to you, and you can compare them to see which one carries the lowest costs.
2. Multiple repayment options
Another feature to watch for is the option to modify payments while you’re in school. Federal student loans and many private grad school loans allow you to pay a smaller amount each month while you’re enrolled or to defer payment completely.
The best loans for graduate school will offer two or more repayment options, allowing you to select the one that’s best for you.
3. Graduate school loan amounts
A lender will be a poor fit if its graduate student loans don’t meet your needs. Check minimum and maximum loan amounts to be sure you can get the full amount you need to pay for your educational expenses.
4. Terms on loans for graduate school
The most common student loan term is 10 years. If you want to borrow for a shorter or longer period, you’ll have to check the range of terms each lender offers.
Your student loan term has a big effect on your monthly payments. The longer your loan term, the less you’ll pay each month. If you’re borrowing a high balance, for instance, see if the lender can help keep payments affordable with a loan term that’s longer than 10 years. Keep in mind, however, that a longer loan term means you’ll pay significantly more in interest.
On the other hand, if you’re not borrowing much or are expecting to earn a lot after graduation, you might benefit more from a five-year loan term. This shorter term will get you out of debt faster and, more importantly, will likely come with a lower student loan rate.
4 best private grad school loans
The process of finding the best graduate school loans — at least in terms of private loans — starts with familiarizing yourself with the lenders that offer them. From there, you can begin comparing grad school loans based on rates, fees and other terms that are important to you.
Kick off your search with the four lenders below. After vetting many products, we found these four that were competitive in the criteria listed above.
1. Citizens Bank Graduate Student Loan
- Citizens Bank offers fixed-rate and variable-rate student loans
- Graduate student loan rate discount of 0.25% for autopay enrollment
- Loyalty discount of 0.25% for borrowers with another Citizens Bank account
- No origination fee or prepayment penalty
- Loan terms of 5, 10, and 15 years
- Loan amounts up to the cost of attendance or $150,000, whichever is lower
- 3 in-school repayment options: full deferment, interest-only payments, and immediate principal and interest payments
- Multiyear approval to easily borrow in the future
- Option to add a cosigner to secure approval or lower rates
- Cosigner release after 3 years of on-time payments
- Program-specific grad school loans for MBA, law and health care students
2. College Ave Graduate Student Loan
- College Ave offers fixed-rate and variable-rate student loans
- 0.25% interest rate discount for enrolling in autopay
- No student loan origination fee or prepayment penalty
- Loan terms of 5, 8, 10 and 15 years
- Grad school loans from $1,000 up to the cost of attendance
- 4 in-school repayment options: full deferment, flat $25 monthly payments, interest-only payments and full principal and interest payments
- Option to add a cosigner to your College Ave student loan
- Prequalification tool that delivers rate estimates without affecting your credit
3. Sallie Mae Graduate Student Loan
- Sallie Mae offers fixed-rate and variable-rate student loans
- 0.25% rate discount for enrolling in autopay
- No grad school loan origination fee or prepayment penalty
- Sallie Mae student loan term of 15 years
- Loan amounts from $1,000 up to the full cost of attendance
- 3 repayment options for in-school borrowers: full deferment, fixed $25 monthly payments and interest-only payments
- Optional interest-only payments for an additional 12 months after leaving graduate school
- Option to add a cosigner to graduate student loans
4. CommonBond Graduate Student Loan
- CommonBond offers fixed-rate and variable-rate student loans
- Interest rate discount of 0.25% for setting up automatic payments
- Loan origination fee of 2% and no prepayment penalty
- CommonBond student loan terms of 5, 10, and 15 years
- Loan amounts from $2,000 up to the full cost of attendance
- 4 in-school repayment options: full deferment, fixed $25 monthly payments, interest-only payments, and full principal and interest payments
- Requirement to apply with cosigner
- Cosigner release after 2 years of payments
- Forbearance for financial hardship in repayment
Should you use private student loans for graduate school?
We highlighted the best private lenders offering graduate school loans above, but they aren’t your only options for financing your advanced degree.
- Direct unsubsidized loans for graduate students: 6.60% interest rate with 1.062% loan fee
- Grad PLUS Loans: 7.60% interest rate with 4.248% loan fee
Because graduate students face some of the highest federal student loan rates, they have an opportunity to save by choosing private grad school loans.
Which option is more cost-effective for you? Find out by getting a few student loan offers and comparing the quoted rates to what you’d pay on a federal student loan for graduate school.
Here are some additional considerations when you’re deciding between private and federal grad school loans:
- Your credit: Private student loans are an option only if you have good enough credit to qualify or have a creditworthy cosigner. If you don’t, federal graduate school loans might be more accessible.
- Borrower protections: If you want a strong safety net, federal grad school loans make sense. Federal student loans offer full in-school deferment of student loans, as well as several repayment options, including forbearance and Income-Driven Repayment plans.
Before considering any student loans, however, make sure you prioritize scholarships and grants for grad school in order to limit your grad school loans as much as possible.
It can feel intimidating to figure out how to pay for grad school, but the time and effort you put in now to apply for scholarships and grants could pay off for years to come.
Andrew Pentis contributed to this report.
The information in this article is accurate as of the date of publishing.
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|4.23% – 13.23%1||Undergraduate and Graduate|
|4.20% – 11.44%2||Undergraduate, Graduate, and Parents|
|4.84% – 13.49%3||Undergraduate and Graduate|
|4.50% – 10.11%*,4||Undergraduate and Graduate|
|4.25% – 13.25%5||Undergraduate and Graduate|
|5.85% – 6.99%6||Undergraduate and Graduate|
|3.95% – 9.81%7||Undergraduate, Graduate, and Parents|
|4.45% – 12.42%8||Undergraduate, Graduate, and Parents|
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