Graduates who enrol in graduate school or professional programs such as law and medicine, will face another hefty tuition bill, plus the attendant costs of completing their course. Graduate study can be more expensive to finance than an undergraduate education and most graduates will also need to defer their previous student loans until their graduate studies are complete.
Raising finance for graduate school is similar to raising finance for those earlier college days. Grants and scholarships should be sought out, and any available financial aid from the graduate school. Graduates are still entitled to submit the standard FAFSA and receive Stafford direct loans which are recommended as the first port of borrowing as carry low fixed interest rates.
Graduates should make up as much of their financial need as possible through Stafford loans. Unlike undergraduates there is no need for parents to provide any details on the FAFSA as there is no expected family contribution for graduate studies, and the student is considered to be independent.
When Stafford loans and other options are exhausted then students should apply for the gradPlus loan, which will make up the difference in the amount needed. Graduate Plus loans are similar to parent Plus loans in that a credit check is required, but the check looks for adverse credit history only and disregards the Fico score.
If adverse credit is revealed in the form of defaults, repossessions, and bankruptcies or similar then a gradPlus loan will be denied. However they are still obtainable with adverse credit if the student can produce a co-signer with good credit. If the graduate has an unblemished credit history there is no need for a Plus loan to be co-signed as it is government guaranteed.
The gradPlus loan is issued with a fixed rate of interest which is higher than Stafford loans but generally lower than private student loans. It includes total fees of 4% which are made up from a 3% origination fee and a 1% guarantee fee. Unlike federal undergraduate loans the Plus borrower must apply to defer the payments of the Plus loan whilst in school, unless they intend to make payments.
Interest accrues on the loan as soon as it is disbursed. GradPlus loans are limited to costs of graduate school once other financial aid and federal loans are taken into account, and as with undergraduate loans they are disbursed directly to the college.
The provision of the gradPlus loan means that students will not need to seek out private student loans, but it is still worth comparing private loans on offer for particular specialities. After graduate studies are completed it is possible to consolidate gradPlus loans with other federal student loans and thus potentially reduce the interest rate.