2 Types Of Graduate Loans
Below is a MRR and PLR article in category Finance -> subcategory Loans.
Understanding Graduate Loans: 2 Main Types
Graduate education often comes with higher tuition costs than undergraduate programs. To help cover these expenses, students can explore two primary sources of graduate loans: government-funded and private loans. Let’s delve into each option.
1. Government Graduate Loans
Government loans for graduate students are similar to those available for undergraduates. Students can apply for Stafford or Perkins loans, each offering distinct benefits.
Stafford Loans
Available to all graduate students, Stafford loans come in two forms: subsidized and unsubsidized. The key difference lies in interest payments. For subsidized Stafford loans, the government covers the interest during school. In contrast, unsubsidized loans require students to handle the interest, though payments can often be deferred until after graduation.
Perkins Loans
Perkins loans are targeted at students facing financial challenges. With a low interest rate of 5%, these loans can fund up to $4,000 of graduate education. While they provide significant financial relief, timely repayment is essential. In cases of extreme financial difficulty, deferments may be possible.
To apply for Stafford or Perkins loans, students need to submit a FAFSA form. After processing, the government will issue a Student Aid Report (SAR) with further instructions.
2. Private Graduate Loans
Also known as alternative graduate loans, these are offered by non-governmental entities such as banks or financial institutions. For instance, The Education Resources Institute (TERI) provides loans through the Act Graduate Student Loan Program, which can be applied for online with quick decisions.
To explore private loans, students can visit major banks’ websites or use search engines to compare available options. Many banks offer comparison charts to help borrowers evaluate different loan plans effectively.
By understanding these two types of graduate loans, students can make informed decisions to finance their education efficiently.
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