Which Costs Less?
With Grad PLUS Loans ending for new borrowers on July 1, 2026, many graduate students are asking: Are private graduate loans cheaper than Grad PLUS? Let’s break it down.
Last Updated: February 2026.
It depends on interest rates, fees, repayment terms, and borrower credit profile. Some private loans may cost less over time, while federal loans offer repayment protections private loans do not. Below is a side-by-side comparison to help you evaluate your options with confidence and clarity.
If you’re just learning about the Grad PLUS changes, start here:
Grad PLUS Loans Are Ending in 2026: What You Need to Know
Grad PLUS Loans include an origination fee calculated as a percentage of the loan amount.
Example: If you borrow $40,000, you will receive less than $40,000 after the fee is deducted, but you repay the full $40,000 plus interest.
Grad PLUS interest rates are fixed and the same for all eligible borrowers in a given year.
In other words:
Private graduate loans, including Nelnet Bank Graduate Student Loans, may be:
Because pricing reflects credit profile, some well-qualified borrowers—especially those applying with a qualified cosigner—may qualify for rates below federal Grad PLUS pricing.
Federal rates are set annually. Private loan rates vary based on credit profile and market conditions.
In general:
Some borrowers may qualify for lower private rates. Others may receive higher offers depending on credit history.
The most reliable comparison is reviewing actual rate offers side by side.
You can view current options here:
Explore Nelnet Bank Graduate Student LoansIllustrative example (not a rate quote)
| Assumed Fixed Interest Rate | 6.5% |
|---|---|
| Origination Fee | No |
| Estimated Monthly Payment | ~$454 |
| Estimated Total Repayment | ~$54,480 |
| Total Interest + Fees (approx.) | ~$14,480 |
| Assumed Fixed Interest Rate | 8% |
|---|---|
| Origination Fee | Applies |
| Estimated Monthly Payment | ~$485 |
| Estimated Total Repayment | ~$58,200 |
| Total Interest + Fees (approx.) | ~$18,200 |
Small differences in rates and fees can meaningfully impact total repayment over time.
| Interest Rate | Fixed or variable, based on credit |
|---|---|
| Origination Fee | No |
| Credit-Based Pricing | Yes |
| Income-Driven Repayment | No |
| Interest Rate | Fixed, set annually |
|---|---|
| Origination Fee | Yes |
| Credit-Based Pricing | No |
| Income-Driven Repayment | Yes |
A private graduate loan may cost less if:
Federal loans provide income-driven repayment and federal protections that private loans do not. Cost is only one part of the decision.
Before July 1, 2026, Grad PLUS Loans may still make sense if:
After July 1, 2026, federal borrowing will be limited to Direct Unsubsidized Loans, which include annual and aggregate caps.
Federal loan limits are defined by law and subject to change.
It depends.
Compare monthly payment, total repayment, and fees before deciding.
Clarity leads to better decisions.
It depends on rates, fees, and borrower credit profile. Private lenders may offer lower rates for qualified borrowers and many, including Nelnet Bank, do not charge origination fees.
Many private lenders, including Nelnet Bank, do not charge origination fees.
A qualified cosigner may help you secure a lower rate with a private loan.
No. Income-driven repayment and federal forgiveness programs apply only to federal loans.
Graduate students: $20,500 per year; $100,000 lifetime
Professional students: $50,000 per year; $200,000 lifetime
Combined graduate + professional: $200,000 cap
Overall federal lifetime limit: $257,500
Example scenarios are illustrative only and do not reflect current rate offers.
Rates and terms vary based on credit profile and market conditions.
Private loans do not include federal protections.
Loan products are subject to credit approval.
A fixed interest rate set annually by
Congress