If you want to boost your income potential over the life of your career, earning a postgraduate degree can be a smart idea to get there faster. On average, individuals with master’s degrees earn nearly $13,000 more annually than their peers with bachelor’s degrees—a substantial return on investment.

However, graduate school can be expensive. According to the National Center for Education Statistics, the average cost of tuition and required fees to attend graduate school (both public and private) was $19,314. That number doesn’t include some significant expenses, such as room and board, so you should plan to spend even more to complete your degree.

If you’re researching how to pay for grad school, you have several options including gift aid, work-study programs and student loans.

Part Two:  How to Pay for Grad School With Student Loans

Unfortunately, gift aid and other financial assistance programs may not cover the full cost of graduate school. If that’s the case, you can use student loans to pay the remaining amount. Graduate student loans can be either federal or private

1.  Federal Loans for Graduate School

If you’re in graduate school, there are two federal loan options:

• Direct unsubsidized loans. If you need to borrow money, start with Direct unsubsidized loans.   They have lower interest rates and fees than PLUS Loans, so they will cost less over the length of your repayment term. They don’t require a credit check, but there is an annual and aggregate borrowing limit. 

• Grad PLUS loans. Unlike unsubsidized loans, PLUS loans  don’t have restrictions on how much you can borrow. You can apply for your university’s total cost of attendance.
  However, PLUS Loans can be expensive. They have the highest interest rate of all federal loans, and they charge a disbursement fee. PLUS Loans also require a credit check. If you have a low score, you’ll need an endorser to apply for a loan with you.

 

2.  Private Loans for Graduate School

Private graduate school loans are issued by private banks, credit unions and online lenders. Unlike federal loans, they typically don’t have limits on how much you can borrow, and you can choose a loan term as long as 20 years to get a smaller payment.

However, private student loans have some drawbacks. Your interest rate is dependent on your credit score, and if your credit isn’t good or excellent, you may not qualify for a loan. Private loans also have fewer repayment options and benefits than federal loans, and they may have higher interest rates.

Despite their disadvantages, private loans can play an important role if you’re not eligible for additional federal aid. If you decide to apply for a loan, keep in mind that rates can vary by lender. It’s a good idea to compare rates from multiple private student loan companies before submitting your application.

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Be sure to check out Dr. Don’s book, “Road Map for Graduate Study, A Guide for Prospective Graduate Students,” right here on the GSRM website. For a reduced price CLICK HERE, go to The Book page, scroll down, click on the Order Now box, and use discount code GSRM.