Graduate and Undergraduate Financial Aid, The Similarities And Differences
As post-high school education costs continue to rise, graduate and undergraduate student loans become a major consideration that must be considered. In the last 40 years, education costs have roughly increased tenfold. However, this is even more troublesome when you look at the cost of undergraduate versus graduate programs. For both types of students, however, there are financial resources available.
When it comes to undergraduate student loans, educational funding can be a confusing mix of grants, scholarships and loans. Sometimes just the undergraduates take out the loans, while others have help from their parents or do a mixture of their own loans with parent help, sometimes as cosigner. The most common programs for undergraduate student loans are still the subsidized and unsubsidized Stafford loans. Subsidized loans are those that are most desired, since the government pays the interest while students are in school. However, these types of loans are need-based and not everyone qualifies for them. Unsubsidized loans are not need-based, which means that they are available to anyone, not just those who are considered financially needy.
The amount you can borrow depends on who you are, your financial history and other factors. If you are a graduate student, you don’t have as many options for scholarships and grants as undergraduates usually do. In addition, your tuition costs will be substantially higher than those of your undergraduate colleagues. However, if you are a graduate student, you can usually participate in teaching or research internships, which can help subsidize your education. In effect, graduate students are being given a partial exchange of education for work, sometimes with stipend or other small monetary compensation besides.
Recently, graduates, too, have become eligible for PLUS loans. These loans differ slightly from undergraduate student loans, because with undergraduates, parents usually become cosigners, while graduate students undertake the responsibility of the loan entirely themselves. However, PLUS loans do have several advantages. First of all, PLUS loans are consistently available and are based on the quality of one’s credit history, not need. Because of this, most people who borrow them can qualify for them. Most graduate students have not yet run up credit limits or other “bad credit history” behavior that adults not in school have done. This is of benefit to them, because financial aid officials determine eligibility with this and look upon this favorably.
On the other hand, interest rates for these types of loans are usually higher than other types of loans. Even at the lower end of interest rates, this means that $10,000 borrowed at 7.5 percent racks up $750 in interest charges the first year. Payments start within 60 days of the fund disbursement and have no grace period. In addition, the caps on these non-private loans differ. Maximum amounts over the lifetime of the program vary between undergraduates and graduates as well. Whether you are a graduate student or an undergraduate student, you’ll need to research all of your available funding options. However, keep in mind that no matter how you find your education, you’ll need to likely get a combination of funds from different sources. That said, funding for school is as available as ever, if not more. The funds borrowed by students to pay for school totaled over $50 billion. Take the time to do some research, whether you need graduate or undergraduate student loans, and you will know you are getting the best deal you can.
