Loans for Graduate & Professional Students

There are four types of educational loans:

1. Federal Loans
2. State Agency Loans
3. Private Loans
4. School-Based Loans

Federal Student Loans 

Most students start their process of researching lenders and loan options with the Federal Loan program. Federal Loans use more flexible credit metrics for approval and oftentimes have better benefits in repayment compared to other lenders. Historically, there have been two types of federal student loans available to eligible Graduate & Professional students:

• Direct Unsubsidized Loan: Does not require a credit check nor is established credit needed to utilize this type of loan. Borrowers most only need to have completed a FAFSA for the respective academic year.
• Direct PLUS Loan: Does require a credit check and borrowers must not have “adverse credit history” to be approved for this type of loan. Borrowers that do have adverse credit history may be able to take additional action steps to become eligible for the PLUS loan.
  • Beginning July 1, 2026, the Graduate PLUS Loan will be phased out to NEW borrowers. Legacy borrowers with an outstanding PLUS Loan balance will be able to utilize this loan type, but only for a limited time. Review the Financial Aid FAQ page for more information. 

Individuals with a more sensitive credit history, borrowers looking to pursue a federally-backed forgiveness benefit such as Public Service Loan Forgiveness, or for those that appreciate certain safety nets like repayment plans based off of their income, may find their best borrowing option through the Federal Loan program. 

State Agency Loans 

Another option for educational loans are programs through State Agencies. State Agencies are non-profit organizations that work closely with their respective government counterparts to provide educational resources and support to students and their families. In addition to traditional loans, some State Agencies may also provide scholarship opportunities, forgivable loan programs, and educational webinars. 

These loans require an established credit history, with borrowers needing to demonstrate a certain level of creditworthiness, typically by meeting a minimum credit score requirement and/or obtaining a co-signer that meets the credit requirements. 

State Agency loans generally have a smaller range of possible interest rates, which can help in the early stages of research when trying to determine the overall cost of the loan. 

Finally, these programs tend to be limited in repayment options, with many lenders only providing a singular, "Standard Repayment" term of 10 years. 

Looking to learn more about State Agency Loan Programs? Click on this text to view a list of State Financial Aid Programs. Be sure to review both your home state and your school's state, but keep in mind some states do not have a residency requirement regarding eligibility for their loan programs. 

Private Loans

Private Loans are programs offered through banks, credit unions, or stand-alone lending organizations. While a select few may take into account things like GPA and job prospects after graduation, these loan options are typically based solely on credit. For borrowers and their co-signers with very good to excellent credit, these loans may result in some of the most competitive interest rate offers available. 

Other benefits provided by private lenders might include things like discounts on rates for repeat borrowing, more options for repayment terms (ex. 5, 10, 15, or 20 years), and the potential to work with the same financial organization for other money management needs or products in the future (ex. banking, mortgages, etc). 

Private Loans are also unique in that they may offer repayment options for borrowers while in-school, such as agreeing to a low, fixed payment or interest-only payments while you are still a student. While these payment plans may provide some savings on a borrower's interest rate, it is important to read the terms of these in-school payment agreements as missed payments could have serious consequences, such as negative credit reporting and even the cancellation of future disbursements.  

Have you checked out Duke's Recommended Lender List? Details on many lending programs, including interest rates, borrowing limits, repayment terms, and more can be found in a convenient, one-stop shop comparison tool! Visit the list, click on the loan program you want to learn more about, and select Detail for an overview of the terms and conditions. 

School-Based Loans 

These loan options are available directly through a college or university; the funds are lent from the school to the student, and the student will work with their school to pay the funds back once in repayment. 

School-Based Loans are usually considered need-based aid and are only available through certain academic programs/schools. Not every student will be eligible to consider a School-Based Loan, so it is recommended that individuals connect with the financial aid office of their respective program to learn more about this option.

All educational loans have some type of borrowing limit that determines how much a student is eligible to borrow. 

For starters, borrowers cannot take out an educational loan that will cause them to exceed the Cost of Attendance for their program. Not only does this include the amount of the loan itself, but also the total amount of all financial aid received. 

In addition to this limit, many loan programs will also have annual borrowing limits and aggregate or lifetime limits.

The Federal Direct Loan program has some of the most defined borrowing limits for both aggregate and annual amounts: 

• Direct Unsubsidized Loan: Annual Limit: $20,500; Lifetime Limit*: $138,500
• Direct PLUS Loan: Annual Limit: Up to Cost of Attendance; Lifetime Limit: N/A
  • Note: Beginning July 1, 2026, new borrowing limits will go into effect for the Direct Unsubsidized Loan. Direct PLUS Loans will be phased out for new borrowers and those without an outstanding PLUS Loan  balance. 

*Includes Unsubsidized and Subsidized Loans from prior education

The majority of Private and State-Agency Loans will allow their borrowers to utilize funds up to Cost of Attendance, though some lenders in these categories will adhere to internal borrowing limits so it is important to review the terms of each lender during your research. 

School-Based Loans are typically based off of a student's overall financial aid information and do not have a set borrowing limit, however they are generally offered in smaller amounts and are used in conjunction with other types of aid. 

There are several factors that contribute to the overall cost of borrowing educational loans:

• Origination Fee
• Interest Rate
• Interest Accrual

An Origination Fee is a cost that can be charged by the lender as a way to recoup some of the lender’s processing costs. The fee is charged upfront and deducted from the amount before the loan is even disbursed. Federal Government Loans charge an origination fee on all of their loans. It is less common for State Agency Loans and Private Loans to charge an origination fee. School-Based Loans do not charge these kinds of fees. 

The Interest Rate is the rate you are charged for borrowing and is usually represented as an Annual Percentage Rate, such as 5% APR. The rate itself can be impacted by a number of different factors: 

• Economic Benchmark: Lenders oftentimes use outside economic benchmarks as an initial baseline for the rates they offer to borrowers. For example, Federal Loans are set using the 10-Year Treasury Yield. Private Lenders and State Agencies might use the Secured Overnight Financing Rate, especially when setting the rate for any variable loans they may offer (see below).
• Credit: Creditworthiness, the assessment of an individual's ability to repay what they borrow, plays a significant role in the rate a borrower will receive, particularly when using Private and State Agency Loans. While an individual's credit score may be the primary factor in determining the interest rate and overall approval status, debt-to-income ratio, especially for parents and co-signers, can also impact the rate a borrower receives.
• Borrower Discounts: Certain loan programs may offer their borrowers incentives that result in a reduction of the interest rate. At the time of application, a borrower may receive an interest rate discount by opting into the shortest repayment term available. During enrollment, this might include certain in-school payment agreements, like interest-only payment plans, or repeat borrowing through the same lender. Finally, a rate reduction may be available once officially in repayment if a borrower opts in to an auto-pay feature ACH payments. 

 Interest rates can be fixed or variable, meaning that the rate will always stay the same (fixed) or it can change over time depending on the financial index used (variable). 

Interest Accrual refers to when the lender begins charging interest. Depending on the type of loan, interest accrual will either begin on the day of disbursement (Unsubsidized) or when the loan enters repayment (Subsidized).

 At the Graduate/Professional level, nearly all loans are unsubsidized, and interest accrues immediately upon disbursement. 

Unlike other types of consumer lending products, student loans generally do not go into repayment immediately following disbursement. As long as a borrower is enrolled at least half-time as a student, payments are typically not required*. When a borrower ceases to be enrolled at least half-time, most lenders will provide a transitional time before repayment begins called a Grace Period, which typically consists of a six-month window to allow borrowers to prepare for the repayment of their student loans. 

While grace periods are a widespread benefit provided by most lenders, borrowers should always confirm the terms and conditions of applicable grace periods. For example, there are a limited number of private lenders that offer nine-month grace periods. Federal Loan borrowers that have received and fully exhausted a previous six-month grace period may lose eligibility for additional grace periods on subsequent loans they take out. Borrowers that take time away from school or take a credit load below half-time enrollment may trigger the start of their six-month grace period and subsequent repayment sooner than anticipated. 

As for repayment terms themselves, most loans have a 10-year repayment period, though some lenders will offer additional repayment terms; 5, 15, and 20-year repayment terms are common offerings among private lenders. 

Federal Loans have slightly different Time-Based options that range from either 10-year or 25-year terms that can be paid on either a Fixed or Graduated schedule. Federal Loans are unique in that they also offer Income-Driven Repayment plans, which are dependent on your financial situation and are likely to offer comparatively lower monthly payments. Learn more about Income-Driven Repayment options on studentaid.gov. 

*Review information in the Types of Loans section as private loans may have other repayment arrangements such as Interest Only payments while in-school.

Under extremely limited circumstances, and only when very specific eligibility criteria are met, there are conditions in which a borrower's loan balance can be discharged or forgiven. 

The most common types of loan discharge occur when a borrower is not able to repay their debt due to death, as well as instances of total and permanent disability. Under these life events, a borrower's remaining balance is generally waived, though some lenders will transition the repayment obligation to the co-signer of the loan when applicable. While many lenders offer this form of discharge, borrowers should always confirm the availability of discharge options and the process for reporting these events with their specific lender. 

Additional circumstances that may lead to loan discharge for a borrower include fraud, identity theft, school misconduct, and bankruptcy. Borrowers should note that loan discharge under these circumstances does not happen often and will require extensive documentation to prove eligibility. Borrowers should consult with their lender and/or legal counsel before assuming any right to loan discharge and the cancellation of their respective loan balances. 

Loan balances can also be waived through eligible forgiveness programs. These programs include: 

• Public Service Loan Forgiveness (Federal Student Loans)
• Income-Driven Repayment Forgiveness (Federal Student Loans)
• Employment-Based Loan Forgiveness (NC FELS Loan; Duke Health System Loans; HRSA Loans)

Public Service Loan Forgiveness 

Established in 2007 under the Bush Administration, the Public Service Loan Forgiveness program was created to help alleviate the loan burden of individuals serving in public-serving roles, such as government workers, healthcare professionals, and educators. These professions usually require extensive training and schooling, but typically do not provide the same trends in compensation that comes with working in the private sector and corporate world. 

There are five main components of the PSLF program: 

• Working under a Qualifying Employer, which includes government agencies (Federal, State, Local, and Tribal) and approved non-profit organizations (generally with a 501c3 designation);
• Working full-time, which is defined as a minimum of 30 hours worked on average every week, though can be made up multiple, qualifying part-time positions so long as the minimum threshold of 30 hours is met;
• Paying towards your Federal Student Loan balance for a total of 120 payments;
• Paying towards your Federal Student Loan balance utilizing an Income-Driven Repayment plan; and
• Verifying qualifying employment utilizing an employment certification process  

Once all 120 payments are made under the conditions highlighted above, a borrower's remaining balance under the Federal Loan program will be waived. There are no taxable obligations on the amount forgiven at either the federal or state* level under the PSLF program. 

Borrowers can utilize the PSLF Help Tool on the Federal Student Aid website to learn more about the program requirements and benefits, 

*The sole exception to this is the state of Mississippi, which currently treats loan forgiveness under the PSLF program as taxable income.

Income-Driven Repayment Forgiveness 

As noted previously, Income-Driven Repayment plans take into account a borrower's finances when determining the respective monthly payment plan. However, there are time limits in place for how long a borrower is expected to pay based on their income before the remaining balance is ultimately forgiven. This is known as Income-Driven Forgiveness and the criteria to receive loan forgiveness depends on the type of plan a borrower is under:

• Income-Based Repayment (IBR)
  • Federal Loans first borrowed prior to July 1, 2014: 25 years
  • Federal Loans borrowed after July 1, 2014: 20 years
• Pay As You Earn (PAYE): 20 years
• Income Contingent Repayment (ICR): 20 years

Once a borrower reaches the allotted time in repayment under their respective IDR plan, the remaining loan balance they carry is forgiven. However, unlike the PLSF program, the forgiveness received under this benefit is treated as taxable income at both the federal and state level.

Borrowers should make a plan to prepare for the additional taxable obligation as soon as they identify IDR forgiveness as their intended repayment strategy. Borrowers may want to consider working with a tax professional to better assess the financial obligation associated with this type of loan forgiveness. 

Employment-Based Loan Forgiveness

The final form of loan forgiveness comes from Employment-Based programs. These programs may provide funding directly to students while in-school, such as the North Carolina Forgivable Education Loan, or will offer forgiveness on loans taken out after the fact, like HRSA's National Health Service Corp, so long as the program's respective employment criteria has been met. Though dependent and set by the specific lenders and organizations, borrowers typically must agree to serve in a specific state or work for a designated employer, in an approved employment position, and for a designated number of years. 

While not necessarily a type of true "loan forgiveness", it is important to note that a growing trend in workplace-sponsored benefits is for companies to offer Loan Repayment Assistance to their employees. This benefit usually takes the form of an additional monetary contribution towards an individual's student loan balance. The actual dollar amount of the benefit will vary from company to company. The top sectors that currently offer Loan Repayment Assistance programs fall under Healthcare, Technology, and Finance. Larger, more established corporations are also more likely to offer this type of benefit as a means to attract and retain talent. 

Direct Loans are awarded by your program’s Financial Aid Office based on the information you provide on the Free Application for Federal Student Aid, or FAFSA, and the Cost of Attendance for your program.

Steps to Apply:

1. Complete the FAFSA online.
2. Be sure to have the results sent to Duke University by entering school code 002920 at the end of the form.
3. Wait for your aid notification.
4. A staff member from your program’s Financial Aid Office will automatically award your eligible borrowing amounts for both types of Federal Loans when completing your financial aid award.
5. Review your loan amount(s)- if you do not need to borrow all that you were awarded or think you may need to borrow more, you may be able to make adjustments to your award.
6. Accept your loan on your student account on DukeHub. Any adjustments you need to make to your award can be done with assistance from your financial aid office.

If this is the first time you have borrowed Federal Direct Loans, there are additional steps you must complete before the loan application process is complete.

Additional steps for first-time borrowers:

1. Complete Entrance Counseling
2. Sign a Master Promissory Note

If you receive notice that your Direct PLUS Loan has NOT been approved, the following steps may be needed:

• For PENDING CREDIT: Remove all credit freezes in place through each of the three credit reporting bureaus (Experian, Equifax, TransUnion) AND complete a PLUS application online so the Department of Education can run your credit successfully
• For DENIED CREDIT: You as the borrower have two options to explore:
  • Obtain an endorser/co-signer* AND complete credit counseling on studentaid.gov
    • For every loan that is endorsed, individual promissory notes must be signed
  • Appeal the credit decision AND complete credit counseling on studentaid.gov

1. Review the full borrower requirements and eligibility criteria at CFNC.org, the College Foundation of North Carolina.
2. Fill out an application for the NC State Assist Student Loan. Once completed, you can check your status online with CFNC.
3. If approved, CFNC will contact your program’s Financial Aid Office directly to process your loan and apply it to your Bursar account.

1. Review the full borrower requirement and eligibility criteria online at CFNC.org
2. Fill out the application for the NC Forgivable Loan. (application process generally begins December or January and closes early spring)
3. Applications will be entered into a lottery for award consideration.
4. If you are awarded this loan, CFNC will contact your program’s Financial Aid Office directly to process your loan and apply it to your Bursar account.

1. Review the list of Recommended Lenders and explore additional lenders as needed.
   • While students may borrow from lenders not included on the Recommended Lender List, the lenders on this list participate in our ELMSelect lender comparison tool. This tool can be used to compare rates, terms, and calculate your future payments. The ELMSelect comparison tool may help you determine which borrowing option may be best for you.
2. Apply online at the website of your preferred lender.
3. Complete the self-certification form at your lender’s website.
4. Once your application process is completed according to the lender's instructions, your program’s Financial Aid Office will receive confirmation from your lender and will add the loan to credit your Bursar bill.