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Graduate Student Line of Credit

Graduate students who are studying for certain kinds of degrees can get lines of credit to help pay for their education.

A line of credit is an arrangement in which a lender makes a set amount of credit available to student to pay for expenses related to education. A student loan is a onetime advance of money the student uses to pay for tuition. A line of credit is a set amount of credit the student can use to cover school related expenses such as books, room and board or laboratory equipment.

One key difference between a graduate student line of credit and a student loan is that a student only has to pay back the money from the line of credit they actually use. In a loan the student has to pay back all of the money borrowed, in a line of credit the student only pays back the money used.

A student will have to pay interest on a graduate student line of credit just as they would on a student loan. The interest rate on a student line of credit is usually higher but the amount of interest accrued is usually less.

How a Graduate Student Line of Credit Works

Lenders are willing to provide lines of credit to graduate students because they expect the student to pay the money back when they get a job. Since those with graduate degrees often make higher salaries, lenders want to do business with them earlier.

Graduate students often need lines of credit because many of the grants and student loans available to undergrads are not available to graduate students. Many graduate courses are very intensive so students do not have the time to work at jobs to pay for their courses and books.

Student loans will cover graduate school tuition but they often will not cover other expenses. A graduate student line of credit will cover those expenses.

A good way to think of a graduate student line of credit is that it is an equity line of credit secured by the student’s future earnings. This is why graduate students in some subjects such as business may have an easier time getting a graduate student line of credit.

How to Get a Graduate Student Line of Credit

There are many banks and other lenders that make graduate student lines of credit available. Most of these lenders are available online and can arrange a line of credit very quickly. A student should be able to locate these lenders by typing the term student line of credit into a search engine.

It may also be possible to get a graduate student line of credit directly from a college or university. Many schools will provide graduate students with lines of credit. Some federal aid programs and internships may provide graduate lines of credit as well.

A good place to look for a graduate student line of credit is a credit union or bank attached to a college, university or college campus. Many of these institutions will make loans and lines of credit available to graduate students. Graduate students who are working as intern or research assistants will be more likely to get such lines of credit.

Drawbacks to Graduate Student Lines of Credit

The big drawback to a graduate student line of credit is that it will reduce the student’s future income. The student will have to pay the line of credit back and have to pay off the interest on it. A graduate student should always realize that she will have to pay off a line of credit.