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Your Guide to Ph.D. Student Loans
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If you’re pursuing your Ph.D., you need to prepare to cover the costs of several more years of schooling. One way to pay for your education is to become a research or teaching assistant. But if you can’t find an assistantship to cover tuition and other expenses, you might need to borrow Ph.D. student loans.
To ensure that you pay as little in interest and fees as possible, it’s critical that you understand what your options are and how to compare them. To help you, we’ll list off some of the top student loans for Ph.D. students.
Top Ph.D. student loans to consider
Depending on your needs and preferences, there are a couple of main options to which you have access: Federal and private student loans. Let’s discuss each in turn.
- Federal student loans for Ph.D. students
- Private student loans
- Other ways to pay for your Ph.D. program
The U.S. Department of Education offers Direct PLUS loans to graduate and professional students. If you’re eligible, you can borrow up to the cost of attendance at your school minus any other financial aid you receive.
Unlike federal student loans for undergrads, Direct PLUS loans require a credit check. So, if you have bad credit, you might need to ask someone to act as an endorser on your loan. You might qualify on your own if you have extenuating circumstances, such as:
- There are errors on your credit report.
- You had an account in collections but have recently paid it off.
- You had a wage garnishment, but it’s been released.
- You defaulted on a federal student loan but have since consolidated it, and it’s no longer in default.
- You went through bankruptcy but can prove that it was discharged more than five years ago.
If you do get approved for a Direct PLUS Loan for the current academic year, you’ll pay an upfront loan fee of 4.236%, which the Department of Education will deduct from your loan disbursement. So, if you’re approved for a $10,000 loan, you would actually receive $9,576.40.
Also, if you get approved before July 1, 2020, you’ll pay a fixed interest rate of 7.08% on your Direct PLUS Loan.
The federal government doesn’t generally offer the best interest rates and fees for Ph.D. student loans, but it does offer some special perks.
For example, you’ll be eligible for the various income-driven repayment (IDR) plans. These can help you keep your monthly payments affordable. And depending on your career plans, you might also qualify for Public Service Loan Forgiveness (PSLF).
While private student loans don’t qualify for IDR plans or the PSLF program, they can offer lower interest rates and fees.
Several private student loan companies offer Ph.D. loans, including College Ave, CommonBond, and Citizens Bank. Also, online marketplaces such as LendKey can help you find regional banks and credit unions with funding options.
Here’s an idea of what type of interest rates you can expect:
|Variable Interest Rates||Fixed Interest Rates|
|CommonBond||3.80% - 9.36%||3.74% - 10.74%|
|Citizens Bank||4.89% - 13.71%||4.99% - 13.47%|
|College Ave||4.49% - 15.32%||4.49% - 15.32%|
|LendKey||Starting at 5.21%||Starting at 4.89%|
Many of these lenders don’t charge a loan fee. So, if you borrow $10,000, you’ll get the full amount. And depending on the lender, you might also get access to other features. For example, some offer an interest rate reduction for setting up automatic payments.
Others offer cosigner release, which allows you to remove your cosigner from the loan after a few years of on-time payments and a second eligibility check.
Some of these lenders offer both fixed and variable interest rates, giving you more flexibility in how you pay back your loans. You can compare private Ph.D. student loans and weigh their costs and features against federal options.
Financing your education is always an option, but the fewer loans you take out, the better. To limit your debt, consider these other funding options:
- Scholarships and grants
- University-based or external fellowships
- Research or teaching assistantships
- Employer tuition reimbursement
- Federal work-study
Research each of these options in advance. Find out how much money, if any, you’ll need to cover your education. Then, compare Ph.D. student loans from private lenders and the Department of Education.
As you do your due diligence, you’ll have a better chance of finishing your Ph.D. program with less debt and lower monthly payments. That could make it easier to eliminate your debt once you start your career.