A graduate student loan is a great way to borrow money to pay for a higher education.  Prospective graduate students that are in need of additional financial aid to pay their way through graduate school have many options available.  The FFEL (The Federal Family Education Loan) Program and the Direct Loan Program both give students an option to borrow money at reasonable interest rates and friendly repayment terms. 

In order for students to participate in the graduate school loan programs, they must complete the FAFSA form and submit it by the deadline.  The FAFSA will determine if they qualify to receive financial aid for college.  After a student’s FAFSA is processed, their school will review the results and will inform them about their loan eligibility. They also will have to sign a promissory note, a binding legal document that lists the conditions under which they’re borrowing and the terms under which they agree to repay your loan.

The FFEL Loan Program offers graduate student loans directly through private financial institutions, which include banks, credit unions, or other lenders that participates in the program.  The current interest rate for students that borrow through the FFEL program is 8.5 percent.  The FFEL loans usually have higher interest rate student loans when compared to loans through the Direct Loan Program. 

The Direct Loan Program offers graduate student loans directly through the federal government.  The current interest rate for students that borrow through the Direct Loan Program is 7.9 percent.  The Direct Loan Program will always have a lower interest rate offered to students then the FFEL Loan Program, since students borrow straight from the federal government.

Graduate students are able to borrow up to $20,500 in graduate student loans each year.  When students graduate with a graduate or professional degree, they may not have more than $138,500 in FFEL Loans and no more than $65,500 of this amount may be in subsidized loans. 
 

Graduate schools usually participate in either the FFEL or Direct Loan program but sometimes participate in both.  You many want to contact the financial aid office to see which program is offered.  If your school participates in the FFEL student loan program, you will need to choose a preferred lender from a list that is provided by the prospective school.  Student loan borrowers may choose a lender from that list, or choose a different lender they prefer, such as a credit union.

FederalDirectLoans.net / FederalStaffordStudentLoan.com / FafsaEfc.com / 
FederalWorkStudyProgram.com / PellGrantOnline.com / ParentLoan.org