Private graduate student loans can close a funding gap left from federal student loans, but you should understand the drawbacks

The elimination of Graduate PLUS loans is expected to create a funding gap for some graduate students. Private student loan lenders are stepping in and offering expanded access to their funds.

As a graduate student, you have the option to take out federal direct unsubsidized loans, graduate PLUS loans or private student loans. Federal direct unsubsidized loans generally have both the lowest interest rates and the most flexible repayment options.

New borrowers aren’t eligible for Grad Plus loans starting in July.

Elizabeth Guevara is a personal finance reporter who explains the world of business and economics and how it impacts your finances. She joined Investopedia in 2024. Emily Elconin / Bloomberg via Getty Images The Department of Education is eliminating the ...

Since it doesn't require a credit check and has more hardship protectinos, the best loan for graduate school is a federal student loan. Graduate students only have access to federal direct unsubsidized loans, which have low, fixed rates and come with benefits like income-driven repayment (IDR) plans and potential loan forgiveness.