Key Facts
Most graduate students covering a Grad PLUS funding gap will use private loans. The market has dozens of lenders, and the differences between them are real -- rate, fees, deferment terms, and cosigner policies can add or subtract thousands of dollars over a loan's life.
This guide covers every variable that matters when comparing private graduate student loans, what to watch out for, and how to choose a lender before committing.
Start Here: Borrow Federal Loans First
Before comparing private lenders, confirm you have maxed out your federal loan eligibility. Federal loans carry income-driven repayment, Public Service Loan Forgiveness eligibility, and deferment during hardship. No private lender matches these protections.
Under the new caps:
- Graduate students (MBA, MS, MA, PhD): $20,500 per year
- Professional students (MD, JD, DDS, PharmD, DVM, OD): $50,000 per year
Private loans cover the gap above those amounts. They are not a replacement for federal loans -- they are what you use after exhausting federal eligibility.
The Variables That Actually Matter
1. Interest rate: fixed vs. variable
Fixed rates stay the same for the life of the loan. Variable rates move with market benchmarks (typically SOFR) and can rise or fall over time.
When fixed makes sense: Multi-year programs, borrowers who cannot absorb payment variability, and long repayment terms (10 years or more). You pay a small premium at origination for certainty.
When variable may make sense: One-year programs with short repayment windows, borrowers who plan to refinance after graduation, and environments where rates are likely to fall. Variable rates today can be 1 to 2 percentage points below comparable fixed rates.
For most graduate students in two to four-year programs, fixed rates are the defensible choice.
2. Origination fees
An origination fee is a percentage of the loan amount deducted at disbursement. On a $60,000 loan with a 2% origination fee, you receive $58,800 but owe $60,000 from day one.
Several lenders charge zero origination fees. On a large loan, this matters more than a small rate difference. A 0% fee at 7.5% is better than a 2% fee at 7.0% over most repayment scenarios.
Rule of thumb: Compare rates only after confirming origination fees. A lower rate with a high origination fee can cost more than a higher rate with no fee.
3. Deferment during school and grace period
Most private graduate lenders offer at least one of:
- Full deferment: No payment required during school and for six months after graduation
- Interest-only payments: Pay only accruing interest during school, keeping your balance flat
- Immediate repayment: Payments begin right away
Interest accrues during deferment in almost all cases. On a $60,000 loan at 7% with full deferment over four years, you will owe roughly $76,800 when you graduate -- before making a single payment.
Interest-only payments during school prevent this capitalization. If you can manage the payment, interest-only reduces your total repayment cost significantly.
4. Loan term options
Loan terms typically range from 5 to 20 years. Shorter terms have higher monthly payments but lower total interest. Longer terms reduce monthly payments but increase what you pay overall.
On $100,000 at 7%:
- 10-year term: $1,161/month, $39,300 total interest
- 15-year term: $899/month, $61,800 total interest
- 20-year term: $775/month, $86,000 total interest
Choose the shortest term your post-graduation income can realistically support. Longer terms are a safety valve, not a strategy.
5. Cosigner requirements and release
Students with limited credit history, low credit scores (below 680), or no income history often need a cosigner to qualify or to get a competitive rate. Most lenders accept creditworthy cosigners -- typically a parent, spouse, or family member with established credit.
The cosigner is equally responsible for the debt until released. Lenders that offer cosigner release allow you to remove the cosigner after a period of on-time payments (typically 12 to 48 months). Lenders that do not offer cosigner release bind the cosigner for the full loan term.
If borrowing with a cosigner, verify cosigner release terms before choosing a lender.
6. Hardship protections
Private loans do not offer income-driven repayment or PSLF, but some lenders offer:
- Forbearance for financial hardship (3 to 12 months typical)
- Unemployment protection (rate reduction or payment pause if you lose your job)
- Natural disaster or medical emergency deferrals
These vary by lender. They are not a substitute for federal loan protections but can provide some buffer in the event of unexpected income disruption.
Lender Comparison
The lenders below work specifically with graduate and professional school students. Each has different strengths depending on your credit profile, program length, and repayment goals.
Credible
Marketplace: compare rates from multiple lenders in one place, no hard pull
SoFi
No origination fees, unemployment protection, career coaching included
Earnest
Flexible payment options and a skip-a-payment option once per year
ELFI
Among the lowest fixed rates for grad and professional school loans
LendKey
Borrow through community banks and credit unions, often with competitive rates
Rate shopping with multiple lenders typically involves a soft credit pull for pre-qualification, which does not affect your credit score. Submit formal applications to two or three lenders in the same 30-day window -- credit bureaus treat multiple student loan inquiries within a short period as a single inquiry for scoring purposes.
What to Avoid
Origination fees above 2%
On a $60,000 loan, a 3% origination fee adds $1,800 to your balance on day one. Shop for lenders that charge zero or near-zero origination fees.
Variable rates on long programs
If you are borrowing for three or four years of a professional program, a variable rate that looks attractive today may be substantially higher by the time you graduate and begin repayment. Lock in a fixed rate unless you have a specific reason not to.
Loans without cosigner release
If you need a cosigner and plan to release them eventually, confirm the lender offers cosigner release before applying. Not all do.
Borrowing more than you need
Your monthly payment is determined by your balance, not your income. Every unnecessary dollar you borrow creates a repayment obligation that follows you for years. Borrow to cover your gap -- not for convenience.
Interest capitalization math
Understand what your loan balance will be at graduation, not just what you borrow. A $60,000 loan at 7% with four years of full deferment becomes approximately $79,000 at repayment start. That is the number your monthly payments are based on.
Step-by-Step Approach
- Calculate your gap at the Loan Cliff calculator. You need this number before shopping lenders.
- Max out federal loans ($20,500 or $50,000 depending on program type). Do not skip this step.
- Check your credit score. If below 680, identify a potential cosigner before applying.
- Pre-qualify with three or more lenders using soft-pull tools. Compare fixed rates, origination fees, and deferment options side by side.
- Check cosigner release terms if applicable.
- Select the lowest total cost option -- rate plus fees minus any protections you value (forbearance, unemployment protection).
- Borrow only your gap amount. Do not borrow up to the COA maximum if your gap is smaller.
- Understand your balance at graduation before signing. Calculate the capitalized balance after deferment using the lender's rate and your program length.
Frequently Asked Questions
What credit score do I need for private grad school loans?
Most lenders approve at 650 or above, but the best rates require 720 or higher. Borrowers below 680 should consider a creditworthy cosigner.
Fixed or variable rate for grad school?
Fixed is safer for multi-year programs and long repayment terms. Variable rates can make sense for short programs with quick repayment windows, but carry rate-rise risk for anything longer.
Can I borrow more than the cost of attendance?
No. Private lenders require school certification capping the loan at your COA minus other aid received.
What is cosigner release and why does it matter?
Cosigner release lets you remove your cosigner after a period of on-time payments. Not all lenders offer it. If borrowing with a cosigner, confirm release terms before choosing a lender.
Can I refinance private loans after graduation?
Yes, and unlike federal loan refinancing, there is no loss of protections. Refinancing private-to-private is common and can reduce your rate if your credit and income have improved.
What is a good total debt-to-income ratio for graduate loans?
A common guideline is total student loan debt at graduation below 1 to 1.5x expected annual starting salary. Above that threshold, repayment starts to constrain other financial goals significantly.