If you’re aiming to start your career, obtain a graduate degree, or simply expand your knowledge and skills, you’ll likely need to take out some type of student loan. But which one is right for you? In this article, we’ll discuss the different types of student loans available, their benefits and drawbacks, and help you make an informed decision about which option is best for you.
Types of Student Loans
When you are considering a graduate school, it is important to understand the types of student loans you may be eligible for. There are a variety of loans available to help pay for your education, and each one has its own unique features and benefits.
Some of the most common student loan types include:
1. Private Loans: Private loans are offered by banks, credit unions, and other financial institutions. These loans are typically more expensive than government-backed loans, but they have some advantages, including the ability to borrow more money and the possibility of having your loan serviced by a specific lender or program.
2. Federal Student Loans: Federal student loans are offered by the government through the Department of Education (ED). These loans have lower interest rates and longer repayment periods than private loans, but they come with more restrictions and requirements.
3. Direct Consolidation Loans: Direct consolidation loans allow you to combine multiple federal student loans into one loan that you can pay off using your monthly income. This can be an effective way to get a lower interest rate and shorter repayment period on your debt.
4. Parent PLUS Loans: Parents may be able to borrow up to $60,000 in total
Repayment options
If you are a graduate school student, you may be wondering about your repayment options. There are a few things to keep in mind when it comes to repaying your student loan.
First, you should have a good understanding of your monthly income and expenses. This will help you figure out how much you can afford to repay each month.
Another important factor is the interest rate on your student loans. The more interest that is added to your loan, the more money you will have to pay back over time. So make sure to monitor the interest rates on your loans periodically so that you know what impact they have on your total debt burden.
Finally, consider consolidating your student loans into one larger loan with a lower interest rate. This can save you a lot of money in the long run.
Default rates
Default rates for graduate school student loans continue to increase, reaching a new high in 2016. Default rates for federal student loans reached 11.1 percent in 2016, up from 9.9 percent in 2015 and 10.1 percent in 2014. Default rates for private student loans reached 6.8 percent in 2016, up from 5.9 percent in 2015 and 6.3 percent in 2014.
The reason for the rise in default rates is not entirely clear, but there are several possible explanations:
– Rising tuition costs: The cost of graduate school has been rising steadily over the past few years, which may be contributing to increased defaults on student loans.
– Economic conditions: Several factors have contributed to an economy that is weaker than expected, including low wage growth and increasing levels of unemployment. This may lead students who are unable to find work or who have difficulty paying their bills to default on their student loans.
– Changes in loan repayment options: There have been changes to the repayment options available to students, which may make it more difficult for them to pay off their debts and default on their loans. For example, the Public Service Loan Forgiveness program was abolished in 2017, which could make it more difficult
Navigating the student loan process
Graduate school can be an expensive investment, and student loans can help cover the cost. But before you sign on the dotted line, make sure to understand your options and understand the student loan process.
When selecting a student loan lender, consider your credit score, loan amount, interest rate and term. Also, be sure to review the terms of the loan agreement carefully. If you have any questions about the student loan process or your loan, don’t hesitate to reach out to your lender or financial aid office.
Good luck with your graduate school journey!
The future of student loans
There has been a lot of talk lately about student loan debt and the future of it. With the cost of tuition continuing to increase, many people are looking into ways to reduce or eliminate their student loan debt. Here are some tips to get started:
1. Consolidate your loans. One way to reduce the amount of money you owe on your student loans is to consolidate them. By combining all of your loans into one loan, you will likely receive a lower interest rate and potentially have more manageable payments.
2. Maximize your repayment options. If you can afford to pay off your loans faster, that’s great! There are several different repayment plans available that will make paying off your debt more manageable for you.
3. Consider consolidation for your graduate school loans as well. Graduate school may be more expensive than undergraduate school, so it may be worth it to consolidate all of your graduate school loans into one payment plan.
It’s no secret that graduate school is expensive, and for many students, it can be downright impossible to pay for everything on their own. Luckily, there are a few options available to help finance your education. Before you take any action, though, it’s important to understand the different types of loans available to graduate students, as well as the associated repayment obligations. After reading this article, you should have a better understanding of what you need to do in order to get started on repaying your student loan. Talk to an advisor at one of our financial institutions if you have any questions or concerns about financing your graduate school education.