2026 Graduate Student Loans: How To Choose a Lender

While much of the attention surrounding the sweeping overhaul of the federal student loan system has focused on parents with college-bound kids, some of the biggest and most controversial changes affect graduate students. Beginning July 1, 2026, new borrowers can no longer take out federal Graduate PLUS Loans, and Direct Unsubsidized Loans are subject to new annual and aggregate borrowing limits.

Because Grad PLUS Loans allowed students to borrow up to their school’s full cost of attendance, many graduate programs, especially those with high tuition or living costs, were designed with that funding option in mind.

For students who can no longer cover the full cost of attendance with federal loans, private student loans may play a larger role in their financing strategy.

The gap is especially noticeable at high-cost institutions: Tuition and fees for the two-year Master of Social Work program at New York University costs about $60,287 annually in the 2025-2026 academic year, for example — nearly three times the $20,500 ceiling put on Direct Unsubsidized Loans.

Adults juggling classes and full-time jobs or family responsibilities may need to rely more heavily on grants, employer tuition assistance and private student loans from lenders who accept part-time students.

Two of CNBC Select’s top student loan lenders, College Ave and Sallie Mae, both approve financing for students enrolled less than half-time.

The U.S. Department of Education initially interpreted the law as covering only 11 professional degree programs that qualified for the enhanced caps, including law school, medical school and dental school.

In May 2026, organizations representing nurse practitioners, physician assistants, speech-language pathologists and other excluded professions sued the Department of Education, arguing its interpretation would force students to rely on private loans or abandon graduate education altogether.

On June 25, U.S. District Judge Beryl Howell temporarily blocked this provision of the federal loan overhaul, finding the Education Department had exceeded its mandate.
 
Howell added that the loss of prospective students would be “detrimental to the public, particularly in underserved communities that may face a shortage of healthcare and other critical professional services.”

On June 29, the Department of Education published revised guidance expanding the list to 29 qualifying professional degree programs. The Department said it remains confident its interpretation will ultimately prevail but, while litigation continues, it will use the broader statutory definition.

If you’ve been in the working world and garnered excellent credit (or have a strong co-signer), you may secure a better rate with a private loan. You should be comfortable giving up federal repayment and forgiveness benefits.

Pros

• Higher borrowing limits
• Available throughout the year
• More repayment term options
• No origination fees

Cons

• May have variable interest rates
• Approval is based on credit score and income
• Fewer borrower protections if your financial situation changes
• No access to federal income-driven repayment plans
• No eligibility for federal loan forgiveness

1. Interest rates: Private student loans can have fixed or variable interest rates. In addition, unpaid interest may be capitalized, meaning it’s added to the principal balance.
2. Fees and penalties: Most private lenders don’t charge origination fees or prepayment penalties, but they may assess late payment fees and other charges.
3. Co-signer requirements: If you have weak or nonexistent credit, a lender will likely require a creditworthy co-signer. Find out how many payments you have to make before you can release them. If a co-signer isn’t available, some lenders have no-co-signer loans that use alternative underwriting criteria for approval.
4. Repayment terms: There are several options, so make sure your lender has the one you want. Immediate repayment: Full principal and interest payments begin as soon as the loan is approved. Interest-only payments: You pay only the accrued interest while you’re enrolled. Fixed monthly payments: You pay a small flat monthly payment while in school. Deferred repayment: Payments are postponed until after graduation or your grace period ends, though interest typically continues to accrue.
5. Hardship options: Private loans generally lack the robust borrower protections of federal student loans, but some lenders offer unemployment protections or even income-based repayment plans.

1. Check your credit score: Approval for private student loans is credit-based, as is the rate you’ll receive. If you have weak credit, you’ll probably need a creditworthy co-signer.
2. Compare lenders: Check rates, terms, fees, hardship options and co-signer release rules from several financing options. The student loan marketplace Credible will let you compare offers from up to a dozen lenders at once.
3. Get pre-qualified: Many lenders offer pre-qualification with a soft credit inquiry, so you can get an estimated personalized rate before formally applying.
4. Choose your lender and complete the application: To apply, you’ll typically need: Social Security number, government-issued ID, income and employment details (for you or your co-signer), your school name, degree program and estimated graduation date, proof of enrollment (such as an acceptance letter or enrollment verification), cost of attendance and/or financial aid award letter. You should be able to apply directly on your lender’s website. This will trigger a hard credit inquiry that will temporarily lower your credit score several points. If you are applying with a co-signer, they’ll need to fill out a portion of the application.
5. Get school certification: If you’re approved, the lender will contact your school to verify your enrollment and confirm that the requested loan amount doesn’t exceed your cost of attendance.
6. Review and accept your loan: Once the school certifies the loan, the lender will provide you with a final Truth in Lending disclosure. It will include your loan terms, including: the approved loan amount, the APR (and whether it’s fixed or variable), a breakdown of applicable fees, your total repayment estimate, your monthly payment amount, the total number of payments and the date your first payment is due, an acknowledgment of your right to cancel within three days of acceptance. You (and your co-signer, if you have one) must electronically sign and accept the terms to finalize the loan.
7. Get the funds: Funds are usually disbursed directly to your school to cover tuition, campus housing, meal plans and related costs. Any leftover money is sent to you, and you can use it to pay for books, off-campus housing, and other expenses, or return it to the lender to save on interest. The disbursement is often split into two parts, one for each semester.

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