How To Choose A Graduate Student Loan

After you graduate college for the first time, you have to immediately start thinking about the next step. Where am I going to be? Do I want to go to grad school? And there is the all important question of how am I going to pay for it all? Graduate student loans are especially difficult to choose because they usually carry bigger numbers and that scares most of us.

Getting a student loan isn’t difficult, but choosing one could certainly give you a headache! Especially designed to pay for college expenses like tuition, room and board, books, and other miscellaneous supplies, student loans are a tough decision.

Below you’ll find some helpful information that will make the decision making process alot easier, take into consideration that your own situation is unique and not all tips apply to it. We have done some in depth research to help you make the decision simple. Hopefully we have done a good enough job.

Here’s where student loans fit into the financial aid process:

• Family completes the FAFSA or Free Application for Federal Student Aid and any other forms required by the school.
• School sends a financial aid award package, outlining the aid being offered.
• Student and family accepts or declines the aid (all or in part).
• If student loans are in the award, the student and family need to apply for each kind of student loan they choose to use.
  

There are many different kinds of student loans. Here’s the order in which they should be used:

• Always use federally-backed or funded student loan types – such as Perkins, Stafford/Direct Loans, and PLUS loans for parents. All of these loans have fixed interest rates and lower (or no) credit score qualifications for borrowers.
  
  • If the school is part of the direct lending program, federal student loans will come from the school
    
  • If the school is not part of the direct lending program, federal student loans will come from a lender
• If you qualify for Unsubsidized Stafford Student Loans, definitely use those. This means the government pays the interest on the student loan while you are in school, saving you money.

• PLUS loans for parents are a good option, too, since most federal student loans have limits – students can only borrow specific dollar amounts depending on their need or their year in school. PLUS loans allow the parent of the college student to borrow up to the total cost of attendance (less other financial aid received), either instead of or as a supplement to other student loans.
  The next options for students and their families are private student loans (sometimes called “alternative student loans”). Private student loans are backed by private banks, credit unions or other lending companies and often have competitive rates.