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Grad School Loan Rates are Higher Than Undergrad: How to Lower Yours

Kathryn Morstad
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Before You Read, Lower Your Student Loan Payment

It’s that quick & easy — really. Our free tool checks a network of top refinance lenders and shows you options in one easy chart.
Checking rates takes 2 minutes with no impact on your credit
Federal & private loans are eligible
No maximum loan amount

Before You Read, Lower Your Student Payment

It’s that quick & easy — really. Our free tool checks a network of top refinance lenders and shows you options in one easy chart.

Checking rates takes 2 minutes with no impact on your credit
Federal & private loans are eligible
No maximum loan amount

If you are participating in or have recently graduated from a grad school program, you may be facing a large student loan debt with high interest rates. You may also be looking for ways to easily manage those loans and save money.

Luckily, interest rates are more favorable now than at any time since 2008. It may be a good time to consider your options including refinancing those high interest grad school loans.

Why are Grad School Loan Rates Higher than Undergrad Loans?

There is a significant difference between grad school loans and the undergraduate loans you may have acquired when starting out on your education path. Here’s why:

Federal Loan Rates Set by Congress

Federal loan interest rates are set by congress each year, and graduate interest rates for both Unsubsidized Loans and Grad PLUS loans are typically much higher than those offered to undergraduates.

Increased Borrowing Capacity

Take Stafford loans as an example. Undergraduates can borrow up to $5,500 in the first year, $6,500 in the second, and $7,500 for each subsequent year. The total maximum is capped at $31,000.

However grad students can borrow up to $20,500 per year and have a maximum cap of $138,500 (and even more for certain health-related professions).

No Access to Subsidized Loans

As an undergraduate, you have access to subsidized loans.  With subsidized loans, interest doesn’t start to accrue until you graduate or drop down below half time attendance (usually considered 6 or less credit hours) and are no longer considered full time.

With grad school, there are only unsubsidized loans available which means that interest starts to accrue as soon as you sign the papers.

Historically, What Have Been the Rates for Grad School Loans?

While the cost for grad school has continued to go up, the interest rates charged on federal loans has been more of a rollercoaster. Both direct unsubsidized loans and direct PLUS loans went down during the 2013-2014 academic year but have been slowly rising since that time.

Fixed Interest Rates for Direct Unsubsidized Loans

2019-2020       6.08%

2018-2019       6.6%

2017-2018       6.0%

2016-2017       5.31%

2015-2016       5.84%

2014-2015       6.21%

2013-2014       5.41%

2012-2013       6.8%

2011-2012       6.8%

2010-2011       6.8%

Fixed Interest Rates for Direct PLUS Loans

2019-2020       7.08%

2018-2019       7.6%

2017-2018       7.0%

2016-2017       6.31%

2015-2016       6.84%

2014-2015       7.21%

2013-2014       6.41%

2012-2013       7.9%

2011-2012       7.8%

2010-2011       7.8%

The good news is that with the federal funds rate at 0%-.25% (as set by the Federal Open Market Committee – the “Fed”), student loan rates should be at historic lows for the foreseeable future.

How to Get a Lower your Grad School Loan Rate and Save Money

If you find yourself with high interest grad school loans, you may be able to save considerable money by refinancing to a loan with better terms.  Private lenders offer flexible loan options with fixed or variable interest rates and repayment periods.

With outstanding credit, fixed and variable rates can be as low as 3.49% and 1.24%, respectively.

On the flip side, private lenders will require their debtors to meet credit worthiness standards that will include a credit check and income verification as part of the final process. If you don’t think you would meet the lending criteria, consider finding a family member or friend who does and ask them to be your co-signer.

With a private refinance, you will also lose access to all of the federal loan repayment options, such as deferment and income-driven repayment plans.

Key Benefits Student Loan Refinancing

Besides saving perhaps thousands of dollars over the life of your grad school loans, you will also find these potential benefits:

  • With lower interest, you can secure a lower monthly payment that will free up cash for other things.
  • You can consolidate multiple loans into a single loan for a more manageable budget and just one monthly payment.
  • You can increase your payment by shortening the repayment period and pay your loan off sooner.  This will accelerate your ability to focus on other life choices, like buying a house or starting a business.
  • You can reduce your monthly payment by extending your repayment timeframe which will give you a better debt-to-income ratio and improve other financing options, i.e., a mortgage or car loan.

The 2 Best Companies to Refinance Student Loans

Our Top-Rated Picks for 2024 Offer Low Rates and No Fees

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No Maximum Loan Amount

Fixed Rate

5.48% – 8.94% APR 4

Variable Rate

5.28% – 8.99% APR 4

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Precision Pricing — Pick Your Monthly Payment

Fixed Rate

5.19% – 9.74% APR 2

Variable Rate

5.72% – 9.74% APR 2

Find Your Lowest Student Loan Refinance Rate

Once you decide that refinancing is the best option for your financial situation, then you have to wade through tons of sites offering advice and information. It can be overwhelming.

Purefy understands the market and has put together a rates comparison tool that will help you navigate the top lenders in the industry and get the best rate options based on your particular set of circumstances. And there’s no impact to your credit report for an initial pre-qualifying rate check.

By taking a few minutes to fill out some standard personal info, our tool will provide you with a comprehensive list of pre-qualified offers from national lenders. You can then take the time that you need to review your options and consider the scenario that best meets your long-term financial goals and budget.

Next Steps…

If you have high student loan debt from grad school loans, you can refinance to a lower rate and save money. And whether you want to pay your debt off sooner, or stretch out those payments for a longer period, we can help you find the right lender to make that happen.

In addition, different lenders have unique benefits and Purefy is available to help you traverse the options. All of your answers can be found in one place with award-winning customer service and access to the industry’s best and most trusted lenders.

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Purefy - Compare Private Student Loan Consolidation & Refinance Options Quickly & Easily
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Purefy - Compare Private Student Loan Consolidation & Refinance Options Quickly & Easily
Purefy - Compare Private Student Loan Consolidation & Refinance Options Quickly & Easily
Purefy - Compare Private Student Loan Consolidation & Refinance Options Quickly & Easily
Purefy - Compare Private Student Loan Consolidation & Refinance Options Quickly & Easily
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Purefy - Compare Private Student Loan Consolidation & Refinance Options Quickly & Easily
ascent student loans

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Ascent Rate Disclosure

Ascent’s undergraduate and graduate student loans are funded by Bank of Lake Mills or DR Bank, Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations; and terms and conditions may apply. For Ascent Terms and Conditions please visit: www.AscentStudentLoans.com/Ts&Cs.

Rates are effective as of 12/1/2023 and reflect an automatic payment discount of either 0.25% (for credit-based loans) OR 1.00% (for undergraduate outcomes-based loans). Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized back account each month. For Ascent rates and repayment examples please visit: www.AscentStudentLoans.com/Rates.

1% Cash Back Graduation Reward subject to terms and conditions. Click here for details.

SoFi Rate Disclosure

3 SoFi Rate Disclosure:

Fixed rates range from 4.49% APR to 8.99% APR with a 0.25% autopay discount. Variable rates from 5.09% APR to 8.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi.

ISL Rate Disclosure

Earnest Rate Disclosure

2 Earnest Rate Disclosure:


Actual rate and available repayment terms will vary based on your income. Fixed rates range from 5.44% APR to 9.99% APR (excludes 0.25% Auto Pay discount). Variable rates range from 5.97% APR to 9.99% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account.

Advertiser Disclosure:

THIS IS AN ADVERTISEMENT. YOU ARE NOT REQUIRED TO MAKE ANY PAYMENT OR TAKE ANY OTHER ACTION IN RESPONSE TO THIS OFFER.

Earnest Rate Disclosure

Rates displayed include the 0.25% Auto Pay discount. You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment from a checking or savings account. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. For multi-party loans, only one party may enroll in Auto Pay. It is important to note that the 0.25% Auto Pay discount is not available while loan payments are deferred.

Actual rate and available repayment terms will vary based on your income. Fixed rates range from 4.67% APR to 16.15% APR (excludes 0.25% Auto Pay discount). Variable rates range from 5.64% APR to 16.45% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan origination loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. Although the rate will vary after you are approved, it will never exceed 36% (the maximum allowable for this loan). Please note, Earnest Private Student Loans are not available in Nevada. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account. It is important to note that the 0.25% Auto Pay discount is not available while loan payments are deferred.

Nine-month grace period is not available for borrowers who choose our Principal and Interest Repayment plan while in school.

Earnest clients may skip one payment every 12 months. Your first request to skip a payment can be made once you’ve made at least 6 months of consecutive on-time payments, and your loan is in good standing. The interest accrued during the skipped month will result in an increase in your remaining minimum payment. The final payoff date on your loan will be extended by the length of the skipped payment periods. Please be aware that a skipped payment does count toward the forbearance limits. Please note that skipping a payment is not guaranteed and is at Earnest’s discretion. Your monthly payment and total loan cost may increase as a result of postponing your payment and extending your term.

Loan Eligibility criteria: Eligible students must: 1) For college Freshmen, Sophomores and Juniors, attend, or be enrolled to attend, a Title IV school full-time. For college Seniors and Graduate students, attend, or be enrolled to attend, a Title IV school at least half-time; and 2) be pursuing a Bachelor’s or Graduate degree. Earnest private student loans are subject to credit qualification, completion of a loan application, verification of application information, self-certification of loan amount, and school certification.

Responsible borrowing tip: Explore all scholarship, grant and federal options before applying for a private loan.

Earnest Private Student Loans are made by One American Bank, Member FDIC. One American Bank, 515 S. Minnesota Ave, Sioux Falls, SD 57104.

Earnest loans are serviced by Earnest Operations LLC, 535 Mission St., Suite 1663 San Francisco, CA 94105, NMLS #1204917, with support From Navient Solutions, LLC (NMLS #212430). One American Bank and Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by agencies of the United States of America.

Advertiser Disclosure:

THIS IS AN ADVERTISEMENT. YOU ARE NOT REQUIRED TO MAKE ANY PAYMENT OR TAKE ANY OTHER ACTION IN RESPONSE TO THIS OFFER.

ELFI Rate Disclosure

4 ELFI Rate Disclosure:

Education Loan Finance is a nationwide student loan debt consolidation and refinance program offered by Tennessee based SouthEast Bank. ELFI is designed to assist borrowers through consolidating and refinancing loans into one single loan that effectively lowers your cost of education debt and/or makes repayment very simple. Subject to credit approval. See Terms & Conditions. Interest rates current as of 10/13/2023. The interest rate and monthly payment for a variable rate loan may increase after closing, but will never exceed 9.95% APR. Interest rates may be different from the rates shown above and will be based on the term of your loan, your financial history, and other factors, including your cosigner’s (if any) financial history. For example, a 10-year loan with a fixed rate of 6% would have 120 payments of $11.00 per $1,000 borrowed. Rates are subject to change.

ELFI Rate Disclosure

Education Loan Finance is a nationwide student loan provider offered by Tennessee based SouthEast Bank. ELFI is designed to assist students financially with receiving their education. Subject to credit approval. See Terms & Conditions. Interest rates current as of 12/11/2023. Variable interest rates may increase after closing but will never exceed 18.00%. Interest rates may also differ from the rates shown above. The term of your loan, financial history, and other factors, including your cosigner’s (if any) financial history can affect the interest rate. For example, a 10-year loan with a fixed rate of 7% would have 120 payments of $11.61 per $1,000 borrowed. Rates are subject to change.

College Ave Rate Disclosure

College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC.. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
Rates shown include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation.
Minimum loan amount $1,000, as certified by your school and less any other financial aid you might receive.
This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
Information advertised valid as of 1/1/2024. Variable interest rates may increase after consummation. Approved interest rate will depend on the creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.

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