Mar 21 2020

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Loans for students


Graduate Students and Loans

According to the 2007–2008 National Postsecondary Student Aid Study, about 56% of graduate and professional students take out loans for school. In fact, the average loan debt for a graduate student is $37,000. This number is even higher for those seeking a professional degree. And it does not factor in undergraduate debt.

Before you pursue graduate school, understand the financial commitment you are making, especially if you need to take out loans or if you already have loans from your undergraduate education. Here are a few things to be aware of:

The Importance of Good Credit

If you are thinking about going to graduate school or getting a professional degree, first take a close look at your finances. A good credit history makes you eligible for more types of aid, since many loan programs for graduate students require a credit check.

Repaying Your Undergraduate Loans

Can’t figure out how you’re going to pay off your undergraduate loans while you’re in graduate school? If you have federal loans that are in repayment when you start grad school, you may be eligible for an in-school deferment.

A deferment is a temporary postponement of repayment, so you don’t need to pay back your loan’s principal during this time. However, you are still responsible for paying the interest that accrues (unless you have a subsidized federal loan).

To be eligible for an in-school deferment, you must be enrolled at least half time. If you don’t qualify for an in-school deferment (for example, your enrollment is less than half time) or for any other deferment, your loan may be eligible for a forbearance.

Contact your loan servicer to ask about deferment or forbearance. These options may not be available if you have an alternative (private) loan.

Loan Consolidation

You may want to consider a consolidation loan if you are juggling payments on multiple federal loans. Consolidation allows you to combine several loans into one, with just one monthly payment to one servicer.

The advantages of consolidation include lower monthly payments and a fixed interest rate. However, with consolidation, you will make more payments over a longer period of time, meaning you will pay more in total over the life of the loan. Plus, on a consolidation loan, the interest rate is higher than the average interest rate for the original loans.

For more on consolidation, including whether your loans are eligible, visit

Taking Time Off

Many students decide to take time off between undergraduate and graduate school. There are advantages and disadvantages to doing this, especially in terms of money management.


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