Direct Unsubsidized Loans accrue interest while you’re in school, during grace periods, and deferment periods. You don’t have to pay the accumulating interest, but it will be added to the principle. There’s currently a 4.3% current fixed interest rate for graduate students with Direct Unsubsidized Loans.

Available only to graduate students, the Federal Direct Graduate PLUS loan program is designed to help graduate students with financial need who are unable to meet their expected student contribution. You will need to pass a credit check to qualify, and remember that interest begins to accrue as soon as you get your first disbursement.

Alternative loans are available from a variety of banks and lenders. The terms and rates for alternative loans are usually not as good as the Federal Direct Loans, but are generally a better option than using your credit card to pay your educational costs. Private loans are based largely on your credit or the credit of your co-signer.

When it comes to finding the right private student or right lender, you’ll need to do some shopping around. One option is to look at the list compiled by the University of California, Office of the President, you may choose a lender from this list, your own lender or any lender.

However you decide to choose, you should always consider Direct Loans first, and these are some of the reasons:

Direct Loans have many benefits that private/alternative loans don’t typically offer, such as:

• Low fixed interest rates
• Flexible repayment plans, some based on income Ability for cancellation, discharge, and forgiveness of loans under special circumstances
• Deferments, forbearance and postponement due to economic hardship.