Federal Direct Unsubsidized Stafford Loans
While Direct Subsidized Stafford Loans might be limited to qualified undergraduate students, as a grad student, you may still apply for a Direct Unsubsidized Stafford Loan. The primary difference between a Subsidized Stafford Loan and an unsubsidized one is that, if the loan is subsidized, the government might cover accruing interest while the borrower is actively enrolled in a program at least half-time, as well as during grace periods and deferment. With a Direct Unsubsidized Stafford Loan, as the qualified borrower, you might be responsible for any interest that accrues during those periods.viii
While you may be responsible for interest on Direct Unsubsidized Stafford Loans, you might also be able to take advantage of some of the benefits afforded to federal loan borrowers. For example, federal loans might include deferment options, fixed interest rates, various repayment plan options, and even the option to consolidate into a direct consolidation loan. Federal loans may also be eligible for some loan forgiveness if you work in certain eligible fields. ix
The exact amount you might qualify to borrow is determined in part by the cost of attendance at your school of choice, as well as considering both annual and aggregate loan limits. You can apply for a Direct Unsubsidized Stafford Loan by completing your FAFSA.x
Federal Direct PLUS Loans
Graduate Direct PLUS Loans may be another option for covering the costs of attending graduate school using a federal loan if you qualify. Like the unsubsidized Stafford loan, you may apply by completing your FAFSA. However, the method of determining how much you may be eligible to borrow is a little different.
Direct PLUS Loans can apply to any of your education-related expenses not already covered by your Direct Unsubsidized Stafford Loan and other financial aid, should you qualify.xi In short, you might be able to use it to fill in the gaps. If you choose to apply for a direct PLUS loan, some of the elements that might be considered in your application are:
The amount of financial aid you are already receiving
The total cost of attendance at your school of choice.xii
Direct PLUS Loans, like Direct Unsubsidized Stafford Loans, are subject to fixed interest rates, which continue to accrue while the loans are in deferment.xiii They also might be eligible for additional benefits that might come with federal student loans, including deferment and repayment options, and potential tax deductions, if you meet the necessary qualifications.
Federal Perkins Loans
Perkins Loans are a little bit different from Direct Unsubsidized Stafford Loans and Direct PLUS Loans. Perkins Loans are a low interest student loan awarded based on eligibility requirements and financial need. Financial need is often determined using your FAFSA, considering the level of difference between your expected family contribution (or EFC) and the cost of attendance at a given school.xiv If you meet the eligibility requirements for a Perkins loan, the amount you may receive might be subject to both availability of funds and your particular level of need. This amount is also subject to maximum annual and lifetime amounts for borrowers. For graduate students, the lifetime figure also includes funds borrowed as an undergrad. Unlike Direct Unsubsidized Stafford Loans and Direct PLUS Loans, Perkins Loans do not include loan fees.xv
Perkins Loans are government funded, but the actual lender is the school you are attending. The total amount of funds available for Perkins Loans at your school are limited each year, so if you wish to be considered for eligibility, make sure to complete your FAFSA early.xvi
Those who apply, qualify for, and accept Perkins Loans might be able to take advantage of similar benefits to other federal loans, such as potential tax deductions (if you qualify, depending on income and other factors), deferment, and consolidation into a Direct Consolidation Loan. Repayment options might be a little different with Perkins Loans, however, so if you choose to pursue this option, make sure to follow up with your school’s financial aid office for more information.
Private or Non-Federal Student Loans
Federal student loan package doesn’t quite cover the cost of attendance? You might consider private student loans to cover the difference, which may be available if you qualify. Private student loans include any student loans not made or guaranteed by the government. Unlike Direct Subsidized Stafford Loans, Direct PLUS Loans, and Perkins Loans, private student loans may be subject to rates, limits, terms and conditions set by the individual lender. These loans might also be subject to a variable rather than fixed interest rate. Repayment, deferment, and forbearance options may be limited, and may vary by lender or loan. Private student loans may not be consolidated into a Direct Consolidation Loan; however, private consolidation options may be available.xvii
Private student loans generally take your credit into account when evaluating loan eligibility and amount.xviii As such, if you have very good credit, you may feel this is a good option for you. If that is the case, make sure you do your research, familiarize yourself with the amount, interest, and terms, as well as the options available to you for repayment and postponement.