Graduate students usually pay more tuition than undergraduates. Therefore, the main purpose of graduate loans is to help fund their education. Graduate students can obtain graduate loans in two ways: the government and private organizations (providing alternative loans to graduates). Each of these elements is described in detail below.
1. Government financing for graduates
This type of loan is the same as an undergraduate loan. The only difference is the name. Like undergraduates, graduates have the option of getting a Stafford or Perkins loan from the government.
Stafford Graduate Loans are available to all graduate students, regardless of their financial position. There are two types of Stafford graduate loans: subsidized and unsubsidized. The difference between the two is who pays the interests. The government pays interest on graduate loans funded by Stafford. Students pay interest on an unsubsidized Stafford graduate loan, but do not have to pay until they graduate.
Perkins graduate loans are available to students who are experiencing financial difficulties. Interest rates are only 5% and can fund up to $ 4,000 in graduate student education. Perkins loans are not a bad option for financially limited graduate students. However, it should be remembered that payments must always be received promptly and permanently. In extreme situations, you can request a deferral of loan payments until you can make regular payments.
To apply for a Perkins or Stafford graduate loan, you must submit a FAFSA form to the government. When the form is processed, the government will send a SAR (Student Aide Report). This report provides detailed instructions on how to apply for these loans.
2. Alternative graduate loan
This loan, also known as a private graduate loan, is a loan funded by a non-governmental agency. The companies that offer these loans may be banks, credit card agencies, or other companies that are interested in helping graduate students get student loans. The Institute for Educational Resources (TERI) is an example of a company that offers this type of loan. It is called the Graduate Student Loan Law Program.
Many major banks offer student loan services, so first try visiting the websites of all major banks. Alternatively, you can use a search engine by entering the name of a bank you know. Some banks offer graduate loan comparison charts to help customers see how their loans are piled up against their competitors. These tables can be used as additional help in finding a graduate loan.