Graduate Student Loans December 2025 – Federal vs. Private Options Compared

With graduate student loans, your options are similar to those available for undergraduate students, but graduate loans often come with higher borrowing limits. There are three main types of graduate student loans: federal graduate loans, private graduate loans, and program-specific graduate loans offered by certain institutions.

CollegeWhale Tip: Graduate programs vary widely in cost. Before borrowing, estimate your total program price over all years—most students underestimate by 20–40%.

Important note about upcoming changes: Proposed federal budget legislation may end new borrowing under the Federal Grad PLUS Loan program starting July 1, 2026 and replace it with lower federal borrowing caps for graduate and professional students. This proposal has not been enacted into law. Because the rules may change, students should check the latest information at studentaid.gov before relying on Grad PLUS funding for future years. The information below reflects current law for students borrowing before any changes take effect.

When to Use Federal Loans for Grad School

Federal loans are usually the strongest starting point for graduate students. They offer fixed interest rates, income-driven repayment (IDR) options, and access to loan forgiveness programs such as Public Service Loan Forgiveness (PSLF). Even borrowers with excellent credit often begin with Direct Unsubsidized or Grad PLUS Loans because federal benefits are not available through private lenders. However, if Grad PLUS Loans are discontinued after July 1, 2026, borrowers beginning or continuing programs past that date should confirm whether PLUS funding is still available.

CollegeWhale Tip: Even if you think private loans will offer a lower rate, always accept your federal Direct Unsubsidized Loan first. The long-term protections are worth more than a small short-term interest difference.

What Are Graduate Stafford Student Loans

Graduate Stafford student loans function similarly to undergraduate Stafford loans, but with higher borrowing limits to account for increased tuition costs at the graduate level. Because they are federally regulated, most students choose to maximize their eligibility for these loans before considering private financing.

Historically, Stafford loans were offered as both subsidized and unsubsidized. Today, graduate and professional students are only eligible for Direct Unsubsidized Loans (not subsidized), though many people still refer to them by the older “Stafford” name.

Difference Between Subsidized and Unsubsidized Stafford Graduate Loans

The difference between subsidized and unsubsidized Stafford loans comes down to who pays the interest while you’re in school. With unsubsidized loans, the borrower is responsible for all interest that accrues during school and deferment. That unpaid interest is then added to the principal when repayment begins.

Subsidized loans, by contrast, do not accrue interest during school or deferment — but graduate students are no longer eligible for new subsidized loans, so nearly all current graduate borrowers will use unsubsidized loans only.

CollegeWhale Tip: If you hear terms like “Stafford” or “subsidized” from older resources or advisors, remember that graduate borrowers today only receive Direct Unsubsidized Loans.

Am I Eligible for a Federal Stafford Graduate Student Loan

To qualify for a Federal Stafford Graduate Student Loan, you must be enrolled at least half-time in an eligible program. To apply, complete the FAFSA at https://studentaid.gov/. After your FAFSA is processed, your school will notify you of your eligibility. You will then complete a Master Promissory Note and any school-specific forms. Contact your school’s financial aid office if you have questions about deadlines or additional requirements.

What Are Graduate PLUS Student Loans?

Federal Graduate PLUS Loans are designed for graduate and professional students who need to borrow beyond the Direct Unsubsidized Loan limits. These loans can cover the full cost of attendance — including tuition, fees, supplies, and living expenses — minus other financial aid.

Because Grad PLUS Loans are federal loans, they offer fixed interest rates and eligibility for federal repayment protections. Unlike most federal loans, they require a credit check, but approval is based on the absence of adverse credit, not a specific credit score.

Important 2026 note: Proposed legislation may end new Grad PLUS Loans for graduate and professional students after July 1, 2026. This has not yet become law. Students needing financing beyond that date may have to rely on Direct Unsubsidized Loans, private loans, or program-specific loans if the proposal becomes final.

Eligibility Requirements for Graduate PLUS Loans

To qualify, you must:

• Be enrolled at least half-time in an eligible graduate or professional program
• Be a U.S. citizen, national, permanent resident, or eligible non-citizen
• Have no adverse credit history
• Submit the FAFSA

Key Features of Graduate PLUS Loans (Current)

• Fixed Interest Rate: 9.08% for loans disbursed between July 1, 2024, and June 30, 2025
• Loan Limit: Up to the full cost of attendance, minus other aid
• Origination Fee: Approximately 4.2% deducted from each disbursement
• Repayment Options: Eligible for federal repayment plans, including IDR and PSLF

Graduate PLUS Loans can be useful after you’ve exhausted your Direct Unsubsidized eligibility. Because they have higher interest rates and fees, it’s important to borrow only what you need.

When Private Student Loans Might Make Sense

Private student loans can be a good option when federal aid doesn’t fully cover your cost of attendance, especially in high-cost graduate programs. These loans are issued by private lenders and approval is based on creditworthiness or the strength of a cosigner.

When to Consider a Private Loan

Private loans may make sense if:

• You’ve reached annual or lifetime federal borrowing limits
• You or your cosigner have excellent credit and may qualify for lower rates than Grad PLUS
• You’re enrolled in a high-cost program such as medicine, business, law, or dentistry
• You plan to repay your loan quickly and won’t need federal benefits like IDR or forgiveness

Advantages of Private Graduate Loans

• Potentially lower interest rates: Especially for strong credit profiles
• Customizable terms: Choose from fixed or variable rates and multiple repayment lengths
• Higher borrowing limits: Some lenders allow up to $300,000 or more
• Fast approval processes: Many lenders offer instant prequalification

Important Trade-Offs to Consider

• No federal protections: Private loans are not eligible for IDR or PSLF
• Credit-dependent: Rates and approval depend on your credit or cosigner
• Less flexible repayment: Fewer deferment and forbearance options than federal loans

If you’re confident in your repayment ability and want to minimize interest costs — especially if you do not plan to pursue PSLF — private loans can be an affordable solution. Always compare multiple lenders before choosing.

CollegeWhale Tip: If you’re comparing private vs. Grad PLUS, run side-by-side repayment calculators. Grad PLUS has higher interest, but private loans lack federal safety nets during hardship.

What Are Graduate Student Loans for Specific Fields of Study?

Field-specific graduate loans are private loan products created for certain high-demand or high-cost degree programs. These loans often reflect the earning potential and training timelines of specific careers.

Some lenders offer targeted loan programs for:

• MBA Loans: Flexible repayment and internship deferment
• Medical School Loans: Higher limits, residency deferment, and interest-only options
• Dental School Loans: Long repayment terms and high borrowing caps
• Law School Loans: In-school deferment and bar study loan options
• Nursing School Loans: Flexible repayment for accelerated BSN and graduate nursing programs
• Health Professions Loans: Includes PT, pharmacy, veterinary, and similar programs

Key Benefits of Field-Specific Graduate Loans

• Higher borrowing limits than standard private loans
• Grace periods and deferment designed around program length
• Interest-only payment options during school or residency
• Cosigner release for eligible borrowers

These loans do not include federal protections like IDR or PSLF, but for students in high-earning professions, they can provide flexibility when federal loan limits fall short.

CollegeWhale Tip: For medical, dental, and veterinary students, compare residency or fellowship deferment lengths carefully—these can matter more than interest rates.