Your Complete Guide for Funding Grad School
Attending graduate school is a major investment, and many students find themselves needing to borrow beyond what federal programs provide. Private student loans for graduate school can fill the gap, but they come with important considerations.
Navigating the End of the Federal Grad PLUS Loan Program: What Grad Students Need to Know
Graduate school often carries a higher cost of attendance and fewer grant-based funding opportunities than undergraduate programs
Future Graduate Students
Future graduate students starting grad school after July 1, 2026, should anticipate a potential reduction in traditional federal loan limits, requiring a greater reliance on alternative financing, such as private student loans, to cover educational costs.
Impact of “One Big Beautiful Law”
The One Big Beautiful Bill (H.R. 1) introduces several changes to federal student aid programs for both undergraduate and graduate students. Notable impacts for grad students include:
- Elimination of the federal Graduate PLUS (Grad PLUS) loan program beginning July 1, 2026. Students won’t be able to take out new Grad PLUS loans after that date. Existing borrowers who took out a loan before July 1, 2026, may continue borrowing for up to three additional academic years or until their program ends, whichever comes first.
- New annual and lifetime borrowing limits set for federal unsubsidized loans for graduate students. Graduate students are now capped at approximately $20,500 per year, with a $100,000 aggregate (or lifetime federal student loan cap).
July 1, 2026 Graduate Student Loan Borrowing Limits
| Student Type | New, Annual Student Loan Limits | Lifetime Grad Student Loan Cap |
| Graduate Student | $20,500 | $100,000 |
Federal vs. Private Graduate Student Loans
Before taking out a private student loan for graduate school, it’s critical to consider and maximize other funding sources. Private student loans should be your final choice when it comes to your grad school financial plan.
Use Federal Aid, Grants, and Scholarships First
The best financial approach to paying for graduate school is to use federal aid, grants, and scholarships as your first sources of funding. To qualify for federal student aid:
- Complete the Free Application for Federal Student Aid (FAFSA) as early as possible. Many colleges require a FAFSA on file to determine aid eligibility.
- Consider Federal Work-Study programs, if you qualify. Your FAFSA must be submitted to be considered for a work-study job.
- Research federal graduate loan options: Unsubsidized Direct Loans, federal graduate PLUS (if available/eligible) until the cut-off date. Take note of the new limits under the One Big Beautiful Bill/Law.
- Speak to your college or university’s financial aid office about institutional deadlines and how these may impact your borrowing.
Work or Grad Assistantship Funding
Check with your graduate program to see if grad students have teaching assistantships, research assistantships, graduate-assistantship jobs, or stipends. These can help to reduce the need to borrow.
How to Find the Best Private Graduate Student Loan Rates and Lenders
If, after maximizing federal and scholarship funding, you still face a financial gap, private student loans may be an option. However, you must understand how grad student loans work, know the risks, and borrow only what you need.
Private Grad Student Loan Features to Compare
- Interest Rate: Know whether the private student loan has a fixed or variable interest rate. Compare these rates to the current federal student loan rates to understand the benchmark interest rate.
- Co-Signer: Many private student grad loans require a creditworthy borrower or a cosigner if the student’s credit is limited.
- Repayment terms: Know when repayment begins and/or if there is a loan deferment while studying in a graduate program.
- Fees: Note any loan origination fees or prepayment penalties.
- Loan Limit: Know how much can be borrowed and if the loan can exceed the cost of attendance.
Private Student Loans for Graduate Students: Frequently Asked Questions (FAQ)
Grad students have common questions regarding private student loans:
- Q: Can I use a private loan to pay for my entire graduate program?
- Yes, but it’s not advisable to rely solely on private loans. Grad students should combine any necessary private borrowing with federal loans, scholarships, assistantships, and grants.
- Q: What if I start grad school before July 1, 2026?
- Some federal loan programs and limits will remain in effect for grandfathered (currently enrolled) students. However, you should check with your college’s financial aid office to confirm eligibility under the new law.
- Q: Do I still qualify for federal graduate student loans if I already borrowed as an undergraduate student?
- Yes, federal graduate loans (Unsubsidized Direct Loans for grads) are still available. However, under the One Big Beautiful Bill, annual and lifetime limits apply, and loan programs like Grad PLUS will no longer be available. Contact your financial aid office to understand your remaining eligibility.
Graduate school can open doors, but it also comes with significant financial commitments. The evolving landscape of federal student aid. including the One Big Beautiful Bill/Law, could impact borrowing capacity. This makes it essential to:
- Begin financial planning early.
- Complete the FAFSA and pursue all available aid.
- Aggressively seek and apply for scholarships, grants, and grad assistantships.
- Understand the risks of private student loans.
- Borrow only what you truly need and have a repayment plan in mind.
When you do use a graduate private student loan, treat it as a tool. Private student loans should not be the primary strategy for paying for a graduate degree. With careful planning and the right mix of financial aid, scholarship funding, and loans, you’ll be better positioned to pursue your graduate degree without an excessive debt burden.
