Paying for Graduate School - Graduate Student LoansArticle provided by SimpleTuition.com
Federal Perkins Loans
Federal Perkins Loans are awarded to students with grave financial needs determined by the FAFSA. The definition of need varies from organization to organization. You can borrow up to $6,000 for each graduate year. Your school is the lender which means you must repay this loan to the school.
Federal Stafford Loans
Federal Stafford Loans come in two forms, Subsidized and Unsubsidized:
A Subsidized Stafford loan is based on financial need and there is no interest charged during the deferment period or before you begin repayment.
An Unsubsidized Stafford loan is not awarded on financial need. Any eligible student can take out this loan. You are charged interest when the loan is disbursed and until it is repaid in full.
The maximum academic year loan limits for federal Stafford loans for graduate students is $20,500, with no more than $8,500 in subsidized loans (effective July 1, 2007). Graduate PLUS Loans are federal, low interest, need-based loans that are guaranteed by the government. Grad PLUS loans can be used to pay for the total cost of education less any aid you have been awarded.
Private Loans are available to students to assist in covering expenses that are above what traditional financial aid can cover. Some private loans require school certification before being approved and are intended to cover educational related expenses while other private loans do not require school certification and may be used for various living expenses above and beyond typical educational expenses.
Other Financing Options for Graduate School
Home Equity Loan is basically a line of credit secured by your home. For more information, contact your bank or credit union.
529 Plans are investment plans that can be used to pay for education expenses. Contributions are after-tax but earning in the fund is exempt.
Education IRAs are contributions that are after tax, earnings in the fund are tax exempt. You can make withdrawals from your IRAs for qualified higher education expenses without having to pay the 10% penalty.
Financial Aid Information Resources
It's important to remember that policies change. Make sure you research your options carefully. These links will help you get informed:
US Department of Education - Offices of Federal Student Aid
Ed.Gov - Federal Perkins Loan Program
Ed.Gov - Direct Stafford Loans
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