Student loans are a necessary evil for many college students. That’s especially the case if you’re planning to attend graduate school, which is often more expensive than an undergraduate degree on a per-year basis.

What’s more, scholarships aren’t as plentiful for graduate students as they are for undergraduates, and students no longer have access to federal Pell Grants. If you’re thinking about borrowing money to get your graduate degree, it’s important to understand how graduate student loans work and whether they’re worth it. Here’s what you’ll learn in this article:

Graduate student loans work similarly to undergraduate student loans, with only a few key differences. For starters, graduate federal loans typically have higher limits, making it easier for students to get the financing they need to make up for fewer other financial aid options.

However, these loans also charge higher interest rates than undergraduate loans. Federal loans for undergraduates charge 2.75%, while loans for grad students start at 4.3%.

“Typically a graduate student will make more money and therefore can pay back at a higher interest rate,” says Joshua Cohen, an attorney who specializes in student loan law.

Finally, while the federal government subsidizes interest on some of its undergraduate loans for students who exhibit financial need, all graduate loans are unsubsidized.

Graduate student loans from private lenders may also have higher interest rates than undergraduate loans from the same lenders.

However, lenders typically offer a range of rates based on your creditworthiness. So if you’ve managed to build a credit history by the time you’re a graduate student, you may qualify for a lower rate than what you could’ve gotten on your own as an undergrad.

Despite some of the disadvantages, graduate students borrow far more than undergraduates to get through their programs. According to 2017-18 data analyzed by the Center for American Progress, about 15% of all students in higher education were in graduate programs, yet they accounted for 40% of all federal student loans issued.

The application process for graduate loans depends on whether you’re applying for federal or private student loans.

“(Graduate students) can generally avoid having to go through the verification process that some undergraduates must complete because they are receiving only non-need-based loans,” says James Anderson, director of financial aid at Montclair State University.

Direct PLUS loans are federal loans reserved for graduate students and parents of undergraduates. If you want to apply for a Direct PLUS Loan, which offers higher limits than the standard graduate loan option, you’ll fill out a separate application after you submit the FAFSA on the Federal Student Aid website.

With private loans, you’ll submit an application directly with the lender of your choice. Before you do this, it’s a good idea to get prequalified with multiple lenders, so you can compare offers and choose the best fit for you. Prequalification typically uses just a soft credit check, which doesn’t impact your credit score.

Regardless of where you apply, you’ll typically need to provide some personal information, income and employment information, your school name and other relevant details.

Graduate student loan limits can vary by lender and the type of student loan. With Direct Unsubsidized Loans, for instance, you can borrow up to $20,500 per year and $73,000 in total. On the other hand, federal Direct PLUS Loans amounts are limited only to the cost of attendance for your school minus other financial assistance you receive.

If you’re thinking of getting private student loans, you’ll want to check with each lender to find out how much you can borrow. Note that private lenders may also have annual and lifetime limits.

For example, you may be able to borrow up to the total cost of attendance for your school every year. Maximums can vary, and you’ll want to contact lenders directly to find out.

There are both benefits and drawbacks to using graduate student loans to help fund your education. As with any financial decision, it’s important to consider the pros and the cons before you pull the trigger:

The most important thing to consider may be whether you’ll be able to pay back the debt. “No single school ever gives 100% job placement,” says Cohen. “If they do, I’d be really concerned by that. It helps to be careful about what the real job prospects are.”

It’s also important to remember that it’s not entirely necessary to borrow money for graduate school, and even if you need to rely on student loans, you may be able to take steps to limit how much you need to borrow.

That may include applying for scholarships and grants, working part or full time, obtaining a fellowship or assistantship, or even saving up in advance.

If you’re applying for federal graduate student loans, there is no minimum credit score requirement. In fact, if you apply for Direct Unsubsidized Loans, there’s no credit check involved in the application process.

Direct PLUS Loans do require a credit check, but the Department of Education uses your credit history only to determine if you have significant negative items on your credit report, such as a bankruptcy, foreclosure, wage garnishment or other things that suggest an adverse credit history.

With private student loans, credit score requirements can vary by lender. In general, though, most lenders require a score in the high 600s to qualify. If your credit score isn’t where it needs to be, or you do qualify, but the terms aren’t favorable, applying with a creditworthy co-signer can boost your odds of getting a loan with affordable terms.

If you’re trying to decide between federal and private loans, it’s important to look at more than just the interest rates.

“Repayment options, such as with the income-driven repayment, and opportunities for cancellation, such as the Public Service Loan Forgiveness Program, are only available with federal loans,” says Anderson. “Opportunities for discharge, as in the case of the death or disability of the borrower, are also more readily available with federal loans.”