If you thought paying for undergrad was complicated, graduate school borrowing adds a whole new layer. The loan programs change, the interest rates go up, the safety nets shrink, and the amounts you may need to borrow can be significantly larger. For the 2026-27 academic year, graduate students face interest rates as high as 8.07% on federal loans alone, and the average graduate borrower now carries over $106,000 in student debt. That is not a typo.
Understanding how graduate borrowing works before you sign anything is one of the smartest moves you can make. This guide walks you through every major loan option, the real costs attached to each one, and what to watch out for along the way.
How Graduate School Borrowing Differs from Undergrad
The first thing to know is that graduate students lose access to some of the best deals in federal lending. As an undergrad, you may have received Direct Subsidized Loans, where the government paid the interest while you were in school. Graduate students are not eligible for subsidized loans at all. Every dollar of interest that accumulates on your federal loans while you are in class is your responsibility.
You also lose the support of a parent's credit in the same way. Parent PLUS Loans are only available to parents of undergraduates. As a graduate student, if you need to borrow beyond the federal caps, you are the one taking on the additional debt, and since Grad PLUS ended for new borrowers on July 1, 2026, that now usually means private lenders. And since many graduate programs run two to four years, the longer you are in school without a full salary, the more your loans grow.
Federal Direct Unsubsidized Loans: Your First Stop
The Direct Unsubsidized Loan should be the first loan you consider for graduate school. It carries the lowest interest rate among federal options and does not require a credit check.
Key Details for 2026-27
- Interest rate: 8.07% fixed for loans disbursed between July 1, 2026, and June 30, 2027
- Annual borrowing limit: $20,500 per academic year
- Lifetime limit: $100,000 for most graduate students, or $200,000 in a program classified as professional. These caps replaced the old $138,500 aggregate figure on July 1, 2026, and both sit under an overall $257,500 federal borrowing ceiling.
- Origination fee: 1.057% deducted from each disbursement
- Credit check: Not required
In real terms, if you borrow the full $20,500, the fee takes about $217 off the top. You receive $20,283 but owe $20,500 plus interest. Small hit, but it adds up over multiple years.
Interest begins accruing the day the loan is disbursed, even while you are still in school. If you can afford to make interest-only payments during your program, you will save yourself money over the life of the loan.
Grad PLUS Loans: Closed to New Borrowers Since July 1, 2026
Rankings
Compare private student loan options
Compare College Ave, Earnest, and Sallie Mae — with Sallie's rate matched to this program where available.
- Rank #1Editor's Pick
Graduate
College Ave
Best for: Students who want flexible repayment options and no origination fees
- 0.25% rate reduction with auto-pay
- Four in-school repayment options
- No application, origination, or prepayment fees
- Borrow from $1,000 up to 100% of cost of attendance
Apply NowRates
From 2.09% APR
2.09% - 15.99% fixed APR, 3.89% - 15.99% variable APR
Disclosures+
College Ave's student loan products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or BTG Pactual Bank, N.A., member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply. (1) All rates include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation. (2) As certified by your school and less any other financial aid you might receive. Minimum $1,000. (3) This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (APR): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. Information advertised valid as of 8/18/2026. Variable interest rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of the Flat Repayment Option with the shortest available loan term.
- Rank #2
Graduate
Sallie Mae
Best for: Undergraduate and graduate students, and parents, comparing competitive fixed- and variable-rate private student loans
- Competitive variable and fixed rates
- Multiple repayment options
- Cosigner release available
- No origination fees
Apply NowRates
From 1.95% APR
1.95% - 14.99% fixed APR, 3.75% - 14.48% variable APR
Disclosures+
Graduate School Loan: Examples of typical transactions for a $10,000 Graduate School Loan with the most common fixed rate, Fixed Repayment Option, two disbursements, a 2-year in-school period, and a 6-month grace: For a borrower with the shortest loan term, it works out to 14.69% fixed APR, 27 payments of $25.00, 119 payments of $204.84 and one payment of $83.82, for a total loan cost of $25,134.78. For a borrower with the longest loan term, it works out to 14.78% fixed APR, 27 payments of $25.00, 178 payments of $178.22 and one payment of $98.65, for a total loan cost of $32,496.81. Loans that are subject to a $50 minimum principal and interest payment amount may receive a loan term that is less than 10 years. A variable APR may increase over the life of the loan. A fixed APR will not. Information advertised valid as of 08/25/2026. Rates: Advertised APRs for undergraduate students assume a $10,000 loan with a 4-year in-school period, a 6-month grace, and the longest loan term offered. Interest rates for variable rate loans may increase or decrease over the life of the loan based on changes to the 30-day Average Secured Overnight Financing Rate (SOFR) rounded up to the nearest one-eighth of one percent. Advertised variable rates are the starting range of rates and may vary outside of that range over the life of the loan. Interest is charged starting when funds are sent to the school. With the Fixed and Deferred Repayment Options, the interest rate is higher than with the Interest Repayment Option and Unpaid Interest is added to the loan's Current Principal at the end of the grace/separation period. To receive a 0.25 percentage point interest rate discount, the borrower or cosigner must enroll in auto debit through Sallie Mae. The discount applies only during active repayment for as long as the Current Amount Due or Designated Amount is successfully withdrawn from the authorized bank account each month. It may be suspended during forbearance or deferment. Cosigner Release: Only the borrower may apply for cosigner release. To do so, they must first meet the age of majority in their state and provide proof of graduation (or completion of certification program), income, and U.S. citizenship or permanent residency (if their status has changed since they applied). In the last 12 months, the borrower can't have been past due on any loans serviced by Sallie Mae for 30 or more days or enrolled in any hardship forbearances or modified repayment programs. In addition, the borrower must have paid ahead or made 12 on-time principal and interest payments on each loan requested for release. The loan can't be past due when the cosigner release application is processed. The borrower must also demonstrate the ability to assume full responsibility of the loan(s) individually and pass a credit review when the cosigner release application is processed that demonstrates a satisfactory credit history including but not limited to no: bankruptcy, foreclosure, student loan(s) in default or 90-day delinquencies in the last 24 months. Requirements are subject to change.
- Rank #3
Graduate
Earnest
Best for: Borrowers who want a zero-fee¹ lender with flexible repayment options² across undergrad, grad, and professional school programs
- 0.25% Auto Pay³ discount plus 0.25% Loyalty⁴ discount for eligible returning borrowers
- No origination fees, late fees, or prepayment penalties¹
- Borrow $1,000⁵ to $400,000 with 5, 7, 10, 12, or 15-year terms⁶
- Four repayment options², a 9-month grace period⁷, and cosigner release for eligible borrowers⁸
Check EligibilityRates
Lowest Rate 2.29%
2.29% - 16.24% fixed APR, 4.74% - 16.60% variable APR
Disclosures+
Earnest Private Student Loans are subject to credit approval. ¹Earnest does not charge fees for origination, late payments, returned check, or prepayments. Florida Stamp Tax: For Florida residents, Florida documentary stamp tax is required by law, calculated as $0.35 for each $100 (or portion thereof) of the principal loan amount, the amount of which is provided in the Final Disclosure. Lender will add the stamp tax to the principal loan amount. The full amount will be paid directly to the Florida Department of Revenue. Certificate of Registration No. 78-8016373916-1. ²Repayment terms and repayment options available vary based on loan type. ³You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment from a checking or savings account. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. It is important to note that the 0.25% Auto Pay discount is not available when loan payments are deferred during the interim period as a result of selecting the deferred repayment option. ⁴To be eligible for the Loyalty Discount, applicants must have previously obtained an Earnest Private Student Loan and apply using the same email address associated with that loan. Only one Loyalty Discount may be applied per eligible Earnest Private Student Loan. Not all applicants may qualify. This offer cannot be combined with Earnest’s Rate Match program. Earnest may modify or discontinue this offer at any time and without notice, however, once a Loyalty Discount is earned, it will not be taken away. ⁵Residents of Hawaii must request a loan of at least $1,501. ⁶Available interest rates are subject to change. Interest rates as of 03/19/2026. Earnest’s Loan Cost Examples: 1.) These examples provide estimates based on principal and interest payments beginning immediately upon loan disbursement. Variable annual percentage rate ("APR"): A $10,000 loan with a 15-year term (180 monthly payments of $152.84) and a 16.85% interest rate without Auto Pay (16.85% APR) would result in a total estimated payment amount of $27,511.20. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed APR: A $10,000 loan with a 15-year term (180 monthly payments of $150.30) and a 16.49% interest rate without Auto Pay (16.49% APR) would result in a total estimated payment amount of $27,054.10. 2.) These examples provide estimates based on interest-only payments while in school. Variable interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $152.84) and a 16.85% interest rate without Auto Pay (16.85% APR) would result in a total estimated payment amount of $35,515.14. For a variable loan, after your starting rate is set, your rate will then vary with the market. Your actual repayment terms may vary. Other repayment options are available. The calculation assumes that the “in-school” period is 4 years (48 months) and includes our 9 month grace period, during which the monthly payment will be $140.42 for 57 months. Fixed interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $150.30) and a 16.49% interest rate without Auto Pay (16.49% APR) would result in a total estimated payment amount of $34,886.94. Your actual repayment terms may vary. Other repayment options are available. The calculation assumes that the “in-school” period is 4 years (48 months) and includes our 9 month grace period, during which the monthly payment will be $137.42 for 57 months. 3.) These examples provide estimates based on fixed $25 payments while in school. Variable interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $253.39) and a 16.85% interest rate without Auto Pay (14.92% APR) would result in a total estimated payment amount of $47,035.20. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $246.61) and a 16.49% interest rate without Auto Pay (14.65% APR) would result in a total estimated payment amount of $45,814.80. Your actual repayment terms may vary. Other repayment options are available. The calculation assumes that the “in-school” period is 4 years (48 months) and includes our 9 month grace period, during which the monthly payment will be $25.00. 4.) These examples provide estimates based on deferred payments. Variable interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $275.17) and a 16.85% interest rate without Auto Pay (14.67% APR) would result in a total estimated payment amount of $49,530.60. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $268.03) and a 16.49% interest rate without Auto Pay (14.39% APR) would result in a total estimated payment amount of $48,245.40. Your actual repayment terms may vary. Other repayment options are available. It is important to note that the 0.25% Auto Pay discount is not available when the deferred repayment option has been selected and the loan is in the interim period. The calculation assumes that the “in-school” period is 4 years (48 months) and includes our 9 month grace period, during which the monthly payment will be $0. ⁷Nine-month grace period is not available for borrowers who choose our Principal and Interest Repayment plan while in school. ⁸To qualify for automatic cosigner release, the outstanding principal balance of your loan must be paid down to 50% or less of the original principal balance. The primary borrower must have made 36 months of required payments after the end of the Interim Period. The primary borrower must meet our eligibility and minimum credit requirements. Additional terms and conditions may apply. To request cosigner release, the primary borrower must have made 12 consecutive, monthly on-time principal and interest payments (or an amount equal thereto) immediately preceding the cosigner release application. The primary borrower must satisfy certain eligibility and credit criteria at the time of application. Additional terms and conditions may apply. ⁹Includes 0.50% combined Auto Pay and Loyalty discounts. Actual rate and available repayment terms will vary based on your financial profile. Fixed annual percentage rates (APR) range from 2.79% to 16.74% (2.29% - 16.24% with Auto Pay and Loyalty discounts). Variable annual percentage rates (APR) range from 5.24% to 17.1% (4.74% - 16.6% with Auto Pay and Loyalty discounts). Earnest variable interest rate student loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent plus a margin and will change on the 1st of each month. The rate will not increase more than once a month, but there is no limit on the amount that the rate could increase at one time. Our lowest rates are only available for our most credit qualified existing cosigned loan borrowers who receive the 0.25% Loyalty discount and requires selection of our shortest term offered, full principal and interest payment while in school, and enrollment in our 0.25% Auto Pay discount. Enrolling in Auto Pay is not required as a condition for approval. Interest rates are subject to change. Earnest Private Student Loans are made by FinWise Bank, Member FDIC. FinWise Bank, 756 East Winchester, Suite 100, Murray, UT 84107. Earnest student loans are serviced by Earnest Operations LLC, 300 Frank H. Ogawa Plaza, Suite 340, Oakland, CA 94612. NMLS #1204917, with support from Higher Education Loan Authority of the State of Missouri (MOHELA) (NMLS# 1442770). FinWise Bank and Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by agencies of the United States of America. © 2026 Earnest LLC. All rights reserved.
When $20,500 per year did not cover your full cost of attendance, the Direct Grad PLUS Loan used to step in, letting you borrow up to your school's total cost of attendance minus other aid with no hard dollar cap. That option ended for new borrowers on July 1, 2026. If you started your program before that date, you are grandfathered for up to three years or until you finish, whichever comes first. Everyone else is now capped at $20,500 a year and $100,000 total, or $50,000 a year and $200,000 total in a program classified as professional.
Key Details for Grandfathered Borrowers, 2026-27
- Interest rate: 9.07% fixed for loans disbursed between July 1, 2026, and June 30, 2027
- Annual borrowing limit: Up to cost of attendance minus other aid
- Origination fee: 4.228% deducted from each disbursement
- Credit check: Required (checks for adverse credit history, not a specific score)
That origination fee is steep. If you are grandfathered and borrow $30,000 through Grad PLUS, $1,268 comes off the top. You receive $28,732 but owe the full $30,000 plus 9.07% interest.
What Counts as Adverse Credit History?
For grandfathered borrowers, the Grad PLUS credit check is not a traditional score-based review. Instead, it looks for specific red flags on your credit report: debts more than 90 days delinquent with a combined balance over $2,085, bankruptcies, foreclosures, tax liens, or wage garnishments within the past five years. If you have adverse credit history, you can still get approved by either obtaining an endorser (similar to a cosigner) or documenting extenuating circumstances. Either path requires you to complete additional PLUS Counseling before receiving the funds.
A Major Change Ahead
The Grad PLUS Loan program was eliminated for new borrowers on July 1, 2026, under the One Big Beautiful Bill Act signed in 2025. For the 2026-27 academic year, most graduate students are limited to $20,500 per year in Direct Unsubsidized Loans with a $100,000 aggregate cap. Students in programs classified as professional can borrow $50,000 per year up to $200,000 total. Students who were already enrolled before July 1, 2026 keep Grad PLUS access for up to three years or until they finish their program.
Private Student Loans: A Last Resort
Two guides go deeper than this overview can. The best private student loans for graduate students compares the lenders themselves, and Grad PLUS vs. Direct Unsubsidized lays out exactly what federal borrowing remains open to you after July 1, 2026.
Private student loans come from banks, credit unions, and online lenders rather than the federal government. They can fill funding gaps, but they come with fewer protections and more variable terms.
What to Expect from a Private Graduate Loan
- Interest rates: fixed and variable options, priced on your credit and your cosigner's. Ranges move with the market, so check our private student loan comparison page for current figures rather than relying on a number in an article.
- Credit check: Required, and your credit score directly affects your rate
- Cosigner: Often needed for the best rates, especially if you have limited credit history
- Borrowing limits: Set by the lender, usually up to cost of attendance
A borrower with a credit score above 750 and a cosigner might see rates near the low end. A borrower with limited credit history and no cosigner could end up near the top of that range or get denied entirely.
What You Give Up with Private Loans
Private loans do not come with the federal safety net. That means:
- No income-driven repayment plans. Your monthly payment is whatever the lender says it is.
- No Public Service Loan Forgiveness. Even if you work for a qualifying nonprofit or government employer for 10 years, private loans are never eligible for PSLF.
- No federal forbearance or deferment protections. Some private lenders offer limited hardship options, but they are not guaranteed.
- No access to the federal Repayment Assistance Plan or any future income-driven options the government may create.
If you must use a private loan, compare offers from at least three lenders. Look at the total cost of the loan over its full term, not just the monthly payment.
Repayment Options for Federal Graduate Loans
One of the biggest advantages of federal loans is the range of repayment plans available to you after graduation.
Standard Repayment
This is the default plan. You make fixed monthly payments over 10 years. It is the fastest way to pay off your loans and costs the least in total interest, but the monthly payments can be high, especially for graduate borrowers with large balances.
Income-Based Repayment (IBR)
Under IBR, your payments are capped at 10% to 15% of your discretionary income, depending on when you first borrowed. After 20 or 25 years of qualifying payments, any remaining balance is forgiven. For graduate borrowers earning modest salaries in the early years of their careers, this plan can make monthly bills manageable.
Public Service Loan Forgiveness (PSLF)
If you work full-time for a qualifying government agency or 501(c)(3) nonprofit, your remaining federal loan balance is forgiven after 120 qualifying monthly payments (10 years). Both Direct Unsubsidized and Grad PLUS Loans are eligible. For graduate students entering public service, PSLF can erase tens of thousands of dollars in debt.
What Happened to the SAVE Plan
The SAVE plan has been struck down in court and is ending. Starting July 1, 2026, the new Repayment Assistance Plan (RAP) becomes the main income-driven plan for new borrowers, with payments of 1% to 10% of income and forgiveness after 30 years. Income-Based Repayment (IBR) also remains available for eligible borrowers.
Comparing Your Options Side by Side
Direct Unsubsidized, Grad PLUS, and private loans compared
| Feature | Direct Unsubsidized | Grad PLUS | Private |
|---|---|---|---|
| Interest rate, 2026-27 | 8.07% fixed | 9.07% fixed | Varies by lender and credit |
| Origination fee | 1.057% | 4.228% | Often none |
| Credit check | No | Yes, adverse history only | Yes, score-based |
| Annual limit | $20,500, or $50,000 professional | Closed to new borrowers; cost of attendance minus aid if grandfathered | Set by the lender |
| Repayment tied to income | Yes | Yes | No |
| PSLF eligible | Yes | Yes | No |
| Interest accrues in school | Yes | Yes | Usually yes |
Private loan rates are shown qualitatively because they move with the market and vary by lender and credit profile. Each lender's review page and the private student loan comparison page carry the maintained figures.
Challenges Graduate Borrowers Face
The Interest Rate Roadblock
Graduate federal loan rates are significantly higher than undergraduate rates. For 2026-27, undergrads pay 6.52% on Direct Subsidized and Unsubsidized Loans, while graduate students pay 8.07% on Direct Unsubsidized Loans and 9.07% on Grad PLUS Loans. That difference adds up fast on a six-figure balance.
Capitalized Interest During School
Because graduate students do not get subsidized loans, interest accrues from day one. If you defer all payments during a three-year program, the accumulated interest gets added to your principal when repayment starts. This is called capitalization, and it means you pay interest on interest.
For example, if you borrow $20,500 per year at 8.07% for three years and make no payments, you will owe roughly $71,400 by the time you graduate, even though you only borrowed $61,500.
The Grad PLUS Trap, If You Are Grandfathered
If you are one of the students who kept Grad PLUS access, it still lets you borrow up to your full cost of attendance, and it is easy to take on more debt than your future salary can support. A student borrowing $50,000 per year through Grad PLUS for a three-year program could graduate with over $150,000 in Grad PLUS debt alone, at 9.07% interest. That balance generates over $13,000 in interest per year.
Limited Private Loan Protections
If your credit qualifies you for a private rate below 8.07%, that lower number might look appealing. But the moment you hit a financial rough patch, you lose the repayment flexibility and forgiveness options that federal loans provide. There is no income-driven plan to fall back on, and no PSLF at the end of the road.
The Information Gap
Many graduate students arrive at their programs without understanding how borrowing has changed since undergrad. Financial aid offices can help, but the responsibility to compare options and understand terms falls squarely on you.
The Bottom Line
Graduate school borrowing is more expensive, more complex, and carries more risk than undergrad. Start by maxing out your Direct Unsubsidized Loan, which is $20,500 per year for most graduate students and $50,000 for professional programs, since it carries the lowest federal rate and requires no credit check. If you are grandfathered into Grad PLUS, turn to it only for the remaining gap. If you are not, anything above the federal cap has to come from scholarships, assistantships, employer help, or private loans, so be honest about whether the total debt makes sense given your expected earnings.
Before you sign any promissory note, run the numbers. Use the Federal Student Aid Loan Simulator to estimate your monthly payments under different repayment plans. A common guideline is to keep your total student loan debt below your expected first-year salary. If the math does not work, consider a less expensive program, part-time enrollment while working, or employer tuition assistance.
Your graduate degree should open doors, not lock you into decades of debt that limits your choices.
Frequently Asked Questions
Can I get subsidized loans for graduate school?
No. Since July 1, 2012, graduate and professional students are no longer eligible for Direct Subsidized Loans. All federal loans for graduate students are unsubsidized, meaning interest accrues from the date of disbursement.
Do I need to fill out the FAFSA for graduate school?
Yes. You must submit the Free Application for Federal Student Aid (FAFSA) each year to be considered for federal loans, including Direct Unsubsidized Loans and, for grandfathered borrowers, Grad PLUS Loans. As a graduate student, your eligibility is based on your own financial information, not your parents'.
What happens if I am denied a Grad PLUS Loan?
You have two options: obtain an endorser who agrees to repay the loan if you do not, or appeal by documenting extenuating circumstances. Either way, you must complete PLUS Counseling before receiving funds.
Can I refinance my graduate loans after I finish school?
Yes. Private refinancing can combine multiple loans into one, potentially at a lower rate. However, refinancing federal loans into a private loan means permanently giving up income-driven repayment, PSLF, and federal forbearance options. Only refinance federal loans if you are confident you will not need those protections.
Can I still get a Grad PLUS Loan?
Only if you were already enrolled before July 1, 2026. Under the One Big Beautiful Bill Act signed in 2025, the Grad PLUS Loan program ended for new borrowers on July 1, 2026. Students already in a program keep access for up to three years or until they finish, whichever comes first. Everyone else is limited to $20,500 per year in Direct Unsubsidized Loans with a $100,000 lifetime cap, or $50,000 per year and $200,000 total in a program classified as professional.
How much should I borrow for graduate school?
Borrow no more than your expected first-year salary after graduation. Research salary data for your field at the Bureau of Labor Statistics Occupational Outlook Handbook. If your projected debt significantly exceeds your expected starting salary, look for ways to reduce costs before borrowing.
Ready to map out how borrowing fits into your graduate school plan? Build your personalized plan on CollegeLens and see how different loan options affect your financial future.
Sravani at CollegeLens
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