Graduate Loan: An Introduction

Many intensive graduate courses make it very difficult to generate enough income to support yourself and your education. If you're looking for graduate loans, what options do you have?

Graduate loans come in many shapes and sizes in the US. You may choose among federal loans like the Stafford Loan, the Graduate PLUS Loan, or some other type of graduate loan from a private source.

Stafford Graduate Loans

Stafford graduate loans are given out directly to the student from the Department of Education or through an agency. No payment is necessary while you're still enrolled, and even after completing the course, you get a grace period of six months before the installments begin. To be considered for a Stafford loan, you must fill up the Free Application for Federal Student Aid form, better known as the FAFSA. Stafford graduate loans are fully guaranteed by the US Dept. of Education, so the interest rates are lower than normal.

PLUS Graduate Loans

PLUS loans were previously available to parents only, but have now been extended to graduate students as well. Graduate loans in this category are different from Stafford graduate loans in that they aren't based on actual needs but on demand. The student is allowed to decide the amount he/she needs, and may indeed use it cover all tuition and living expenses and more. Graduate loans in the PLUS category depend not on your actual costs, but on your credit rating. The repayments start immediately, at a fixed rate of 8.5% per annum, but may be deferred in special cases.

Private Graduate Loans

If there is a shortfall in your budget even after availing of these federal graduate loans, you may make it up through many types of private graduate loans available from banks and other financial organizations. Remember, however, that these aren't usually guaranteed by the government, and so have a higher rate of interest than federal graduate loans.