Financial aid options for graduate school
Here are some financial aid options for graduate students.
Federal Perkins Loans
These are student loans awarded to students with grave financial needs as determined by the Free Application for Federal Student Aid (FAFSA). The definition of need varies from school to school, so make sure to work with the financial aid office to understand your eligibility. If you qualify, you can borrow up to $8,000 for each graduate year with a lifetime limit of $60,000 (including undergraduate loans). The loan funds come from your school, so you must repay this loan to the school.
Federal Stafford Loans
These are student loans that can come in two forms, Subsidized and Unsubsidized:
* A Subsidized Stafford loan is based on financial need as determined by the FAFSA. For Subsidized Stafford Loans for which the first disbursement is made on or after July 1, 2012, and before July 1, 2014, students will be responsible for the interest that accrues on the loan during the grace period. If a student does not pay the interest accrued, the interest will be capitalized to the principal amount of their loan when the grace period ends.
* An Unsubsidized Stafford loan is not awarded on financial need. Any eligible student can take out this loan. You are charged interest when the loan is disbursed and until it is repaid in full.
The maximum academic year loan limits for federal Stafford Loans for graduate students is $20,500, with a lifetime limit of $138,500 (including undergraduate loans). Certain health profession students may have even greater loan limits due to a phase out of the Health Education Assistant Loan (HEAL) Program. Contact your school for more details.
These are federal, fixed-interest, need-based loans that are guaranteed by the government. GradPLUS loans can be used to pay for the total cost of education less any aid you have been awarded.
Private Student Loans
This type of loan is available to students to assist in covering expenses beyond what traditional financial aid, including grants, federal loans, and scholarships can cover. Some private loans require school certification before being approved and are intended to cover education-related expenses while other private loans do not require school certification and are sent directly to the borrower.
Other Financing Options
Many employers will subsidize or help pay for the cost of your graduate education. Often, employers may require you to continue working for them for a specified amount of time after completing your degree or require that the program is in a field related to your job.
Home Equity Loan
A Home Equity Loan is basically a line of credit secured by your home. For more information, contact your bank or credit union.
529 Plans are investment plans that can be used to pay for education expenses. Contributions are after-tax but earning in the fund is exempt.
Education IRAs are contributions that are after tax, earnings in the fund are tax exempt. You can make withdrawals from your IRAs for qualified higher education expenses without having to pay the 10% penalty.