Stafford Student Loans for Graduate Student
Graduate students face a different scenario when searching for loan options because their programs are generally more expensive than undergrad program. Those in professional programs often face even higher costs, and many must turn to the Stafford Loan for their tuition solutions. There are two different basic loan products through the Stafford program: The Subsidized Loan and the Stafford Unsubsidized Loan. See http://studentaid.ed.gov
The subsidized student loan is based on financial need, and you are not charged any interest until you start your repayment period. You also are not charged interest during deferment. These interest payments are made by the federal government during this time, and this will not be reflected in your repayment terms.
The unsubsidized loan is not based on any financial need. Eligible students can get Stafford loans through the government or a private lender without establishing this need, although you will still have to fill out a FAFSA form first. However, the unsubsidized loan is charged interest from the first disbursal until the repayment is complete - and there are loan limits to consider
Stafford Loan Limits : For graduate and professional degree students, your loan limit is $20,500 annually, and no more than $8,500 of this can come from subsidized funds. There is also a total limit of $138,500 over the course of your study, and no more than $65,500 can come from subsidized loans. Remember that you may not qualify for the maximum loan, so make sure you check with your financial aid center at your school as well as your lender to find out where your personal limits are.
Your interest rate will be the same as for undergraduates–6.8%–but your lender may have ways of reducing fees and profits to help you. Your loan will be disbursed to you through the school financial aid office in two installments. You also have several different repayment plans to choose from–Standard, Graduated, Income-Sensitive, and Extended. Also remember that Stafford Loans are highly sought-after because of its consolidation flexibility, and this can be of great benefit to a new grad with different loans that have piled up over the years.
In order to qualify for the Stafford Loan, graduate students and professional degree students must attend at least half time. If you find that you can’t enroll half time, you can consider other types of loans, including the Act Continuing Education Loan, which was designed to cover the fees and tuition associated with continuing education, but which you could use toward your professional or graduate degree for less than half time enrollment.
You may also consider combining subsidized and unsubsidized loans for your graduate or professional degree loans. Many students choose this option, and also combine the Stafford with other alternative loans, such as the continuing education loan. The alternative loans carry many different limits, ranging from $1,500 to over $200,000 depending on the course of study and other financial aid the student is receiving.
Remember that you do have higher limits in the graduate and professional studies loans, but that also means you will have more graduate student loans to repay when you graduate or leave school. Make sure you understand the implications the graduate student loans will have on your life when you leave school, and get some planning help from as many of your institution’s financial experts to prepare for the day when your graduate student loan payments begin.