Uncle Sam still has good options for funding a higher degree. By John Miley, Senior Associate Editor July 13, 2012 When Rachel Geylin decided to go back to school, the 25-year-old kicked into high gear, working two jobs before enrolling in Yale's School of Nursing in August. "I'm trying to cover as much as I can without loans," she says.SEE ALSO: 5 Grad Degrees Worth the Debt Geylin's strategy is timely. As of July 1, graduate and professional students are no longer eligible for need-based, subsidized federal Stafford loans. The loans, still available to undergrads, are one of the best deals around. Interest on subsidized loans does not usually start to accrue until six months after students graduate or leave school; interest on unsubsidized Staffords, still available to grad students, accrues immediately. That difference is enough to add about 6% to the average grad-school debt, says Mark Kantrowitz, publisher of Finaid.org (Read more from Kantrowitz about the value – and shortcomings – of colleges’ financial-aid calculators here). There are still federal loans worth exploring. Grad students who can demonstrate exceptional need may borrow up to $8,000 per year in Perkins loans, with a fixed rate of 5%. Unsubsidized Staffords let grad students borrow up to $20,500 per year at 6.8%. Grad PLUS loans, at 7.9%, will cover the remaining cost for students with clean credit histories. Advertisement Private student loans come with caveats. You must have pristine credit to nab the lowest rates. And private loans lack the repayment flexibility of federal loans, which give those in need the option of income-based repayment plans or loan forgiveness for public service. This article first appeared in Kiplinger's Personal Finance magazine. For more help with your personal finances and investments, please subscribe to the magazine. It might be the best investment you ever make.