You should keep your total student loan debt, including any outstanding undergraduate debt, in sync with your income after graduation. If your total student loan debt at graduation, including federal and private student loans, is no more than your annual starting salary, you should be able to afford to repay your student loans in ten years or less.
Each lender has different requirements for approval for graduate student loans. In general, you will need a good credit score, a solid credit history, attend an accredited school, and have a steady income and low debt-to-income ratio. A creditworthy cosigner may be required.
Federal Grad PLUS loans offer several federal benefits that private loans do not. This includes potential loan forgiveness and the option to temporarily stop or lower payments on your loan. If you have excellent credit, however, you might be able to qualify for a lower interest rate on a private graduate loan.
You can apply for a Grad PLUS loan online. Before applying, you must complete the Free Application for Federal Student Aid, or the FAFSA.
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What is the Grad PLUS loan?
A Grad PLUS loan is a federal student loan specifically for students pursuing a graduate or professional degree. Unlike federal student loans for undergraduate students, you will need to undergo a modest credit check to be approved.
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How do graduate student loans work?
Graduate student loans work similar to student loans for an undergraduate degree. Every dollar borrowed needs to be repaid, plus interest. All student loans, both federal and private, accrue interest. If you miss a student loan payment down the road, you will have negative consequences, including impacts on your credit.
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How do I pay for graduate school?
First consider options for free money – scholarships, fellowships, grants, teaching and research assistantships, employer-paid tuition assistance, and more. If you need to borrow graduate student loans, first borrow federal loans. After borrowing the Federal Direct Stafford Loan and the Federal Grad PLUS Loan, if you still need funds for graduate school, consider private student loans. Keep costs as low as possible and borrow responsibly.
Most private student loan lenders require a credit score of at least 650 to be approved. The higher the credit score, the more likely you are to be approved and the lower interest rate you’ll get. Lenders also want to see steady income and a low debt-to-income ratio. Parent loans can also have a creditworthy cosigner to increase the chances of being approved. Cosigning any student loans is extremely risky, since the cosigner is equally responsible for repaying the loan and their credit is negatively impacted by the debt.
Consider which lender offers the lowest interest rate and loan terms that work best for you. Some lenders offer other benefits, such as due date flexibility and options to pause payments if you lose your job. Compare reputation and reviews and find the best lender for your situation.
A parent is responsible for repaying a parent loan. When it is time to start repaying a parent loan, some lenders allow the student to refinance parent loans into their own name. Keep in mind that refinancing federal loans into private loans means a loss in irreplaceable benefits, including income-driven repayment, potential loan forgiveness and generous deferment periods. A borrower may not qualify for a refinance, though, so it’s best not to count on this.
