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Earning a Ph.D. can be an expensive undertaking.
Median annual tuition and fees for graduate students were $19,749 for the 2020-21 school year, according to the National Center for Education Statistics. Considering that doctoral candidates take an average of 5.8 years to complete their Ph.D., according to the National Center for Science and Engineering, that could mean a price tag of nearly $115,000 for your Ph.D.
Although these costs may seem overwhelming, doctoral students have several options to pay for their degree, including doctoral loans.
Private student loans may be an option to cover your doctoral education. credible allows you compare private student loan rates from multiple lenders, all in one place.
Get Federal PhD Loans First
If you need to borrow money to get your doctorate, the best source for a start-up loan is the US Department of Education. That’s because federal doctoral loans (like all federal student loans) offer fixed interest rates regardless of your credit history, flexible payment terms, no payments until after you leave school, and options to postpone payments.
There are two types of federal loans available to doctoral students: Direct Unsubsidized Loans and Grad PLUS Loans.
Federal Direct Unsubsidized Loans
Graduate students, including doctoral students, can take out federal direct unsubsidized loans to pay for their program. As unsubsidized loans, your interest will accrue and compound (add to your principal) while you’re in college, unless you make voluntary interest payments.
For the 2022-23 school year, you can expect the following:
- Annual Borrowing Limit: $20,500
- Aggregate Borrowing Limit: $138,500 (this includes all federal loans received for undergraduate study)
- Interest rate: 6.54%
- Disbursement commission (subtracted from the amount lent): 1,057%
Don’t forget that the US Department of Education adjusts the interest rate annually on July 1, so the interest rate on federal loans during your first year of doctoral education may not be the same for years futures.
Federal Direct Unsubsidized Loans have a standard 10-year repayment period with a fixed monthly payment. But you have the option to change to alternative payment plans.
WHAT IS THE DIFFERENCE BETWEEN SUBSIDIZED AND UNSUBSIDIZED STUDENT LOANS?
Federal PLUS Loans for Graduates
These types of loans are specifically designed for graduate students, including doctoral students. Like Direct Unsubsidized Loans, the interest on Grad PLUS Loans is unsubsidized, so it will accumulate and compound while you’re in school, unless you make voluntary interest payments.
The 2022-23 limits and rates for federal Grad PLUS loans are:
- Annual Borrowing Limit: Cost of attendance, minus any other assistance you receive
- Aggregate Borrowing Limit: None
- Interest rate: 7.54%
- Disbursement commission (subtracted from the amount lent): 4.228%
Consider private student loans to fill in the gaps
For-profit banks and other lenders offer private student loans. This means that specific loan limits, interest rates, payment terms, fees, and credit requirements will vary from lender to lender. The best way to find the right private student loan for you is to shop around and compare rates and terms from at least three to five lenders.
You may be wondering why doctoral students would take out private student loans, since federal Grad PLUS loans have a loan limit as high as the cost of attending school. Here are some reasons why you might consider turning to private loans for doctoral students:
- Lower interest rates — Federal doctoral loans currently have relatively high fixed interest rates of 6.54% for Direct Unsubsidized Loans and 7.54% for Grad PLUS Loans. Doctoral students with good or excellent credit can borrow money from a private lender at rates lower than those offered by the federal government.
- Lower rates — Federal Direct Unsubsidized Loans have a disbursement fee of 1,057%, and the Grad PLUS Loan disbursement fee is 4,228%. While most private lenders also charge an origination fee (which works the same as the federal disbursement fee), borrowers with good credit will likely be able to find a loan with a lower origination fee.
Private student loans can also be a good way to lower the cost of your doctoral loans in the future.
If you need to get private student loans, visit Credible for compare private student loan rates from multiple lenders in minutes.
FEDERAL VS. PRIVATE STUDENT LOANS: WHAT MAKES SENSE TO YOU?
How to pay for a doctorate without borrowing
If you want to avoid taking we lend For your doctoral program, you can find other ways to pay for your advanced degree, including:
- Scholarships and grants – Your university or a program within your field may offer scholarships or grants for your studies. This is financial aid that does not have to be repaid.
- Scholarships — These merit-based financial awards are given for short-term opportunities and can help you pay for specific aspects of your program.
- Postgraduate, teaching or research assistantships — This type of program requires you to work part-time in your field at your university in exchange for a full or partial tuition waiver. Some assistantships also come with a living stipend so you can fully focus on your studies.
- Tuition reimbursement – Your employer may offer tuition reimbursement for your doctoral program, especially if your field of study is related to your current job.
Do PhD loans cover living expenses?
You can use both Federal Direct Unsubsidized Loans and Grad PLUS Loans to pay for living expenses. The US Department of Education will generally disburse student loan funds directly to your school. If there is any money left over after covering the cost of tuition and fees, the remaining amount will be refunded to you and you can use that money to pay for housing or any other education-related costs.
With private doctoral loans, you can borrow any amount you can qualify for and use the money for any education-related expenses, including housing or living expenses.
How Much Can You Borrow With PhD Student Loans?
The amount you can borrow with a doctoral student loan depends on the source of your loan.
- Federal Direct Unsubsidized Loans Have an annual loan limit of $20,500 and a total limit of $138,500, which includes all federal student loans you received for your college education.
- Federal PLUS Loans for Graduates allows you to borrow up to the full cost of attending your school, minus any other aid you receive. There is no added limit.
- Private loans for doctoral students They have different borrowing limits depending on the private lender you borrow from, your credit history, and other factors.
With Credible, you can compare private student loan rates without affecting your credit.