You can live off of loans during graduate school. Many graduate student lending programs go well beyond paying for tuition and fees, and while rules vary from program to program, you can generally find loans that will help pay for living expenses like food, rent and other necessary costs like travel to and from school or purchasing a computer. However, living off of loans increases the amount of money that you will have to pay back when you get out of graduate school.
Direct and PLUS Loans
As of 2013, the federal government's direct student loan program lets you take out loans of up to $20,500 per year while you're in graduate school. You can only borrow up to a lifetime limit of $138,500, including undergraduate debt. Direct loans for graduate students aren't subsidized, which means that interest will start adding up while you're in graduate school, even though making payments while you're a student is optional.
If you need to borrow more money than you can get from a direct loan, the Federal PLUS loan could be another option. To get a PLUS loan, you'll have to go through a credit check and, as of 2013, you will pay an initial loan fee of 4.204 percent. However, you will be able to borrow an amount equal to your total cost of attendance (including living expenses), less any other aid that you are receiving, at a fixed rate of 6.41 percent.
If you have financial need, you might be eligible for a federally subsidized Perkins loan. The Perkins loan has two key advantages. The first is that the interest rate is, as of 2013, a relatively low 5 percent. The second is that the loan has no fees. You can borrow up to $8,000 per year from the Perkins program, with a lifetime cap of $60,000, including undergraduate Perkins debt. Perkins loans have to be used first for school charges, including room and board, but excess funds can be applied to your other expenses.
If you need to borrow more than the federal programs offer, private lenders may be another option. Some offer adjustable-rate loans, while others have fixed-rate programs. In either case, you will likely have to go through a credit check, and your repayment options might not be as favorable as the choices available for federal loans. Nevertheless, these loans can give you more money to help meet your expenses for attending school.
You will have to start paying off your loans when you graduate (if you haven't already started), and the more you borrow, the more you will have to pay. Peterson's, the college advice publisher, reports that financial aid counselors recommend keeping your student loan payments when you graduate to between 8 and 15 percent of your after-graduation income. The federal student aid program recommends that you look for grant money or money that you earn from formal work-study programs or from jobs to pay for school before looking to loans.
- US News: Explore Graduate Student Loan Options for 2013
- FederalStudentAid: Subsidized and Unsubsidized Loans
- FederalStudentAid: PLUS Loans
- FederalStudentAid: Perkins Loans
- Peterson's: Graduate Loans -- Some Advice for Grad Students
- FederalStudentAid: Financial Aid for Graduate and Professional Degree Students
- Federal Student Aid. "Perkins Loan Cancellation and Discharge." Accessed Feb. 25, 2020.
- Federal Student Aid. "What Types of Federal Student Loans Can I Repay Under an Income-Driven Repayment Plan?" Accessed Feb. 25, 2020.
- Federal Student Aid. "How Is My Monthly Payment Amount Calculated Under an Income-Driven Repayment Plan?" Accessed Feb. 25, 2020.
Steve Lander has been a writer since 1996, with experience in the fields of financial services, real estate and technology. His work has appeared in trade publications such as the "Minnesota Real Estate Journal" and "Minnesota Multi-Housing Association Advocate." Lander holds a Bachelor of Arts in political science from Columbia University.