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Can grad students get subsidized student loans?


    If your sights are set on graduate or professional school, you may wonder what kind of loans you might be eligible for. In this article, we’ll talk about Direct Subsidized Loans and Direct Unsubsidized Loans – offered by the U.S. Department of Education – and whether grad students qualify for them.

    It’s important to note that the financial aid available to grad students is different from the financial aid available to undergraduate students. As you prepare to attend grad school, it’s important to research the financial aid that is available specifically to grad students.

    What are Direct Subsidized Loans for students?

    This is a federal student loan that’s available to currently enrolled undergraduate students who can demonstrate financial need. This type of loan is not available to grad students. Your college or university determines the amount you can borrow. This assessment is based on your financial need.

    What makes these loans unique is that the U.S. Department of Education pays the interest on the loan while you’re in school at least half-time and for the first six months after you leave school. They’ll also pay the interest on the loan if you go into deferment on the loan.

    Are grad students eligible for Direct Subsidized Loans?

    As covered above, no, grad students aren’t eligible for these loans provided by the U.S. Department of Education. While these loans aren’t available to grad students, other loan options may be available.

    What are Direct Unsubsidized Loans for students?

    These are federal student loans that require the borrower to be responsible for paying the interest during all periods of the loan. With Direct Subsidized Loans, in comparison, there are periods where the student is not responsible for the interest on the loan.

    With Direct Unsubsidized Loans, you don’t need to demonstrate financial need, and schools may award you this loan based on its cost of attendance while factoring in the other financial aid you might receive. The current maximum loan amount for this type of loan for graduate students is typically $20,500.

    It’s important to emphasize that you’ll be responsible for paying the interest on a Direct Unsubsidized Loan during all periods. Suppose you choose not to pay the interest during certain periods, including when you’re enrolled in school, during grace periods, and if you take a deferment or forbearance? In these cases, interest will accumulate on the loan and be added to the principal amount of your loan.

    Are grad students eligible for Direct Unsubsidized Loans?

    Yes, grad students may be eligible for these loans. To receive an unsubsidized loan, you must be enrolled at least half-time in school. Your school must also participate in the Direct Loan Program.

    Other financial aid available to grad students

    When it comes to federal loans beyond Direct Unsubsidized Loans, PLUS loans are available to graduate students. Grants, scholarships, and tuition waivers are also available to graduate students.

    Just like for undergraduate students, it’s important that grad students file the Free Application for Federal Student Aid (FAFSA®) to find out what federal financial aid might be available to them.

    Beyond federal and institutional aid, many graduate students also consider private student loans when figuring out how to pay to continue their education.

    Final thoughts

    Although grad students can’t take out Direct Subsidized Loans, there are unsubsidized student loans and PLUS loans to consider along with other financial aid options. Make sure you research your options before deciding what financial aid to pursue.