Graduate school is more than just another few years tacked onto a person’s education, it is an investment in their future. That does not detract from the fact that it can be a major financial commitment, especially if the graduate student plans to take out loans to finance their education. It can be a big help for students to understand their options and how graduate student loans work before making their decision, so continue reading for more information.
Current Income and Personal Budget
When planning to finance a graduate school education, students should consider how much of the cost they may be able to pay out of their own pocket. Any amount of money that can be paid up front rather than through a loan will mean savings on the cost of interest in the long run. However, many programs do not allow students to work while attending graduate school, which may require them to take out more loans to cover the cost. Another thing worth considering is what are the Best public colleges in America?
Another important factor in graduate school loans is the student’s credit score. All loans require a credit check before being approved or denied, and having a high credit score increases the odds of approval. It may also help students secure a lower interest rate on the loans for which they are approved.
Post-Graduation Earning Potential
All loans will need to be repaid, so it is important for students to consider their earning potential after graduation. According to RealtimeCampaign.com, they should look into the average salary for their desired profession and make a decision about whether it is worth the cost of a student loan.
Federal Student Loans Vs. Private Student Loans
Federal student loans are typically the first choice when looking for graduate school financing. Federal Direct Unsubsidized Loans have a relatively low interest rate and students are not required to make payments until six months after they have graduated. However, students are only allowed to borrow a maximum of $20,500 per year and cannot borrow more than a total of $138,500 as a graduate school student.
Many borrowers turn to private student loans to cover any excess cost after they exhausted their federal student loan options. These loans are offered by banks, online lenders, and credit unions. Students must begin making payments on these loans as soon as they receive the funds, but many lenders offer flexible payment arrangements depending on the student’s circumstances. Contact SoFi to find out more about the loans available.
Handling Undergraduate Loans While in Graduate School
Many graduate students are still paying down their undergraduate school loans while attending graduate school. Those with federal loans may be able to defer loan payments while they are attending school, allowing them to hold off on those bills until they receive their graduate degree. However, a deferment is temporary, and students will still be responsible for paying back any interest that accrues while their loan payments are deferred.
The Bottom Line
Graduate school is a rewarding experience that can skyrocket a person’s career. However, it can also be a hefty financial undertaking. Graduate students should do plenty of research ahead of time to be sure that financing graduate school is the best option.