Graduate school is often an expensive endeavor. The average price of graduate tuition and fees is about $20,000 annually, according to National Center for Education Statistics data.
More than likely, you’ll need to use student loans to cover that price tag, but just how much can you get? While you can often borrow up to the total cost of your education, graduate school loan limits vary for both federal and private loans, and lifetime maximums may apply.
- Federal graduate loan limits
- Private loan limits
- How much should you borrow in student loans?
- How to reduce what you owe
Federal graduate school loan limits
Different loan limits apply depending on the type of federal graduate student loans you’re taking out.
| Loan type | Annual loan limit | Lifetime loan limit |
|---|---|---|
| Direct Unsubsidized Loans | $20,500 | $138,500 (including any federal undergraduate loans) |
| Grad PLUS loans | Up to your school’s cost of attendance, minus other funding received | Up to the total cost of attendance, minus other funding received |
In general, federal borrowers should first max out unsubsidized loans before turning to PLUS loans. This is because unsubsidized loans have a lower interest rate of 7.05% for graduate or professional borrowers in the 2023-24 school year, compared to 8.05% for grad PLUS loans. Fees are also lower on unsubsidized debt: You’ll pay a 1.057% disbursement fee, compared to a 4.228% charge for PLUS loans.
Given the choice between federal and private student loans for graduate school, federal loans are generally more desirable. This is because they tend to have lower, fixed interest rates, as well as access to various protections and benefits that aren’t offered by private lenders. This includes options like more flexible deferment or forbearance, student loan forgiveness programs, and income-driven repayment plans.
Private graduate school loan limits
If you’ve exhausted federal funding and still need money to cover the cost of graduate school, you might consider private student loans to bridge that gap. Unlike federal loans, private graduate school loan limits vary by lender.
Many lenders allow you to borrow up to the cost of school annually, while others only offer a flat dollar amount. Lifetime maximums may also apply.
Depending on the lender, the annual loan limit might be higher than it is for federal graduate school loans. For instance, Custom Choice offers an annual maximum of $99,999 in graduate school loans, and an aggregate limit of $180,000. MEFA, on the other hand, funds graduate students up to the full cost of attendance (minus any other aid received) with no aggregate limit.
Graduate loan limits can also vary depending on the type of program in which you’re enrolled. Degrees that are more expensive or generally lead to higher salaries may receive higher maximums. Citizens, for example, offers a lifetime limit of $150,000 for master’s degrees, while law students can borrow up to $225,000, and medical or dental students can get up to $350,000.
How much should you borrow in student loans?
As soon as you know you’re planning to go to graduate school, it’s helpful to begin the financial planning process. Research the costs of different programs, look into funding opportunities, and, if possible, start saving money.
It’s also important to determine what’s a safe amount for you to borrow before you take out any loans. A general rule of thumb is to borrow no more than what you can reasonably earn in your first year after graduation. That can help ensure you can comfortably afford your payments once your grace period expires.
The Foundation for Research on Equal Opportunity, a nonprofit think tank, has compiled a searchable database of the projected earnings and return on investment for 14,000 graduate degrees. Another helpful tool you might use is Indeed’s salary estimator, which takes into account location and experience level.
Other factors to consider are how comfortable you are with carrying debt and whether you anticipate significant changes in your financial situation, such as having kids or purchasing a home.
| Tip: To help assess costs ahead of time, see if your potential schools offer a breakdown of costs, which also factor in expenses beyond just tuition and fees, such as insurance, transportation, and estimated living expenses. |
How to reduce what you borrow
Even if your graduate degree will increase your earning potential, paying off student debt is still a burden. Here are strategies to minimize the amount you have to borrow:
- Choose an affordable school: The less you pay for graduate school, the less you’ll have to borrow. Consider affordability when choosing your graduate program, including tuition costs as well as the local cost of living.
- Apply for scholarships and grants: Scholarships and grants generally don’t have to be paid back. Every dollar you win is one you don’t have to borrow.
- Work while in school: Some graduate programs are specifically designed for working professionals and offer classes at night or on a part-time basis. Even if you’re a full-time student, you might still fit in a part-time job to help cover some costs.
- Ask your company for tuition assistance: Some employers will cover some or all of your educational costs, especially if the degree is relevant to your current job. Find out if your company offers this perk by talking to the human resources department, and be sure to ask if there are work requirements you must fulfill to be eligible.
- Find ways to cut costs: The lower your costs of living, the less money you need. You might live with a roommate or your family, or secure cheaper transportation by buying a used car. Cutting costs by just $200 a month adds up to $4,800 over a two-year graduate program.
- Return unused money to the lender: In some cases, you might end up borrowing more than you need. While it may be tempting to pocket that money, returning funds can lower your costs down the road. If the money is returned within a certain time frame, you may even avoid interest accruing on that cash at all.