The best graduate student loans of September 2022

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Student loans may allow people to bridge the gap between what they can afford for college and the overall cost of an education. If you've already used your "free money" (scholarship, grants, and your savings) to pay for college and still find that you're unable to pay for school, a student loan could be a good option.

When considering your options, federal student loans should always take precedence over private ones. Federal loans have the lowest interest rates and come with a level of protection that private lenders don't offer.

Take the Biden administration's plan to cancel federal student loan debt. The Department of Education is poised to forgive $10,000 of student loan debt for borrowers making less than $125,000 per year, and as much as $20,000 for Pell Grant recipients. Federal loans will qualify for forgiveness, but private loans won't.

Graduate students don't qualify for all types of federal loans, but they are able to take out Direct Unsubsidized loans and Direct PLUS loans. 

Here are some of the best options for graduate students looking to take out loans. 

Federal Direct unsubsidized loan

Federal Direct PLUS loan

Ascent graduate student loans

College Ave graduate student loans

Earnest graduate student loans

Sallie Mae graduate student loans

Custom Choice graduate student loans

Other graduate student loans we considered

• Citizens Bank private student loans. Citizens Bank offers good rates, but there are fewer repayment options through this lender, as Citizens doesn't give the option to pay while you're still in school. 
• Discover private student loans. While the lender has no fees, you can find more competitive APRs elsewhere. 
• Credible private student loans. Credible doesn't directly make student loans. Rather, it is a marketplace that makes loans through the lenders listed above and more. Credible works with Ascent, Citizens Bank, College Ave, and Sallie Mae, for example. 

Which lender is the most trustworthy?

We've only selected student loan lenders with no public controversies in the last three years. We've also compared each institution's Better Business Bureau score.

The BBB, a non-profit organization focused on consumer protection and trust, evaluates companies by judging a business's responses to consumer complaints, honesty in advertising, and clarity about business practices. Here is each company's score:

Of our top picks, only Custom Choice is not currently rated an A- or higher by the BBB. The BBB doesn't have a rating for Custom Choice. That said, this doesn't necessarily reflect Custom Choice's trustworthiness, and you should ask others about their experiences with the businesses before deciding against borrowing from the companies. 

Methodology

Personal Finance Insider's mission is to help smart people make the best decisions possible with their finances. To do that, we looked through many student loan companies, comparing interest rates, terms, and fine print so you don't have to. We looked for several factors in determining the best student loans, including: 

• Interest rates: The lower the interest rate the better, and we prioritized lenders with the lowest interest rates for graduate students.
• Nationwide availability: We searched for student loans available in all or most US states. 
• Flexibility of repayment plans: There are four main options for repayment offered by most lenders: defer payments until after school; interest-only payments in school; small, fixed payments in school; and full monthly in-school payments. We looked for lenders with the most ways to pay.
• No or few fees: We prioritized lenders that didn't charge fees, like origination fees or prepayment penalties.

Frequently asked questions

Should I borrow a student loan?

Your choice depends on your financial situation and the value you place on your education. You may consider alternatives such as a less expensive school, scholarships, or a side job to bring in more cash. Whatever your decision, make sure you fully understand the terms of your loan before making a commitment.

Does it make sense to pay student loans while you're still in school?

Keep in mind that interest will still accrue while you're in school, so it may be beneficial to make your interest payments each month or set aside a certain amount of money for monthly payments.

Paying either the principal of your student loans or the interest could be a good idea, because when your loan goes into repayment, any unpaid interest will capitalize. This means it will become part of the principal balance of your loan, which ups the loan. Interest is then determined using this new, higher loan balance.

What repayment options are available while I'm in school?

Every lender is different when it comes to your repayment choices while you're in school. Some allow you to pay down your monthly debt in full every month, others offer interest-only or flat payments, and you may be able to defer all costs until after you graduate.

What are my choices for repayment term length?

As you'll likely be repaying your student loans over a longer period, you'll want to know your options for your term length. You may want an extended length to spread your costs out, but be aware that you'll pay more in overall interest this way. Some lenders, like Sallie Mae, set your repayment term for you.

What's the difference between federal and private student loans? 

Federal student loans have a number of protections that private student loans don't. The loan forbearance during the coronavirus pandemic and recent student loan forgiveness are some examples.

Similarly, income-based repayment plans are only available for federal student loans, and help to lower payments to a percentage of a person's income. That's a protection not available to private student loan borrowers that could make a big difference. 

It's a good idea to use all of your available federal loan options first to take advantage of these protections.

Does interest accrue during a loan's grace period?

Yes, interest will accrue during the six-month grace period after you graduate, similarly to how it does while you are in school. Private lenders may have suspended this practice during the pandemic, but they are under no obligation to do so. 

Is a variable or fixed loan better?

Fixed-interest rates stay the same for the life of the loan. Variable interest rates are exactly what they sound like — they have interest rates that change based on interest rate indexes, like the LIBOR or prime rate, plus a margin. When that index rate increases, the amount of interest you owe increases, along with your monthly payment. 

On variable-rate loans, interest rates and payments change over time. So, it's important to remember that what goes up must come down, and vice versa. There's a chance that interest rates will increase before a long loan (like a student loan) is paid off, and your interest rate and payment may not always be as low as it is now. 

The best choice for you depends on your financial situation and which way you believe the market is headed. 

Can private student loans be forgiven?

Unfortunately, private student loans are not eligible for any federal forgiveness programs. However, if you have federal student loans, you may be eligible for forgiveness if you are under a certain income threshold or if you work a certain job.