Federal vs. Private Loans for DPT Students

Financing a DPT degree typically requires borrowing $100,000 or more. Understanding the difference between federal and private loans, and knowing which to use when, directly affects how much you pay over the life of your debt and which repayment protections you retain. This decision is becoming even more consequential with the elimination of Grad PLUS loans in 2026.

Federal Loan Options for DPT Students

Direct Unsubsidized Loans

The primary federal loan for graduate students. You do not need to demonstrate financial need to qualify.

• Annual limit: $20,500
• Aggregate limit: $138,500 (includes any undergraduate federal loans)
• Interest rate (2025-2026): 7.94% (fixed for the life of the loan)
• Origination fee: 1.057%
• Interest accrues from disbursement, including during school and grace periods
• No credit check required

Grad PLUS Loans (Through June 2026)

Covers the remaining cost of attendance after other aid is applied.

• Annual limit: Up to cost of attendance minus other financial aid (no fixed cap)
• Interest rate (2025-2026): 8.94% (fixed)
• Origination fee: 4.228%
• Credit check required. Adverse credit history may result in denial, though you can appeal with an endorser or documentation of extenuating circumstances.
• Maximum rate cap: 10.50%

For most DPT programs with annual costs of $30,000 to $50,000+, students need both Unsubsidized ($20,500) and Grad PLUS to cover the full cost.

The July 2026 Cliff

The One Big Beautiful Bill Act eliminates Grad PLUS Loans for new borrowers effective July 1, 2026. This is the most significant change to graduate student financing in decades.

New rules starting July 1, 2026:

• Graduate students: $20,500/year, $100,000 aggregate limit
• Professional students: $50,000/year, $200,000 aggregate (it is not yet confirmed whether DPT qualifies as "professional" under this definition)
• Overall federal lifetime cap: $257,500 across all loans

Legacy provision: Students who received any federal loan disbursement before July 1, 2026 can continue borrowing under current rules (including Grad PLUS) for the lesser of 3 academic years or their expected time to credential. The type of loan does not matter; any Direct Loan qualifies.

What this means practically: DPT students starting programs in Fall 2026 or later will face a federal borrowing cap that may not cover their full cost of attendance. Private loans will become a necessary part of the funding equation for most students.

Private Loans

Private student loans are offered by banks, credit unions, and online lenders. They fill the gap between federal aid and the total cost of attendance.

Interest Rates

Private loan rates for the 2025-2026 academic year range from approximately 2.65% to 17.99% APR for fixed-rate loans and 3.5% to 17.99% for variable-rate loans. However, only borrowers with excellent credit qualify for the lowest advertised rates. Most DPT students without established credit or a cosigner will be offered rates in the 6% to 12% range.

Some private lenders currently offer rates lower than the federal Grad PLUS rate of 8.94%, which makes private loans worth comparing, especially for students with strong credit. However, lower rates come with significant trade-offs (see below).

Key Differences from Federal Loans

Feature	Federal Loans	Private Loans
Interest rate (2025-26)	7.94% (Unsub) / 8.94% (PLUS)	~2.65% - 17.99% (credit-dependent)
Origination fees	1.057% / 4.228%	Often none
Income-driven repayment	Yes (IBR, RAP)	No
PSLF eligible	Yes	No
Forbearance/deferment	Flexible federal options	Limited, varies by lender
Credit check	Not for Unsubsidized	Required
Cosigner option	Not applicable	Often required for best rates
Forgiveness	After 10 years (PSLF) or 30 years (RAP)	None
Borrowing limit	$20,500/yr (post-2026 for new borrowers)	Up to cost of attendance

Repayment Plans for Federal Loans

Standard Repayment

Fixed payments over 10 years. At $150,000 in debt at 7.94%, your monthly payment would be approximately $1,815. This is the fastest payoff option but the highest monthly cost.

Income-Driven Repayment (Current Options)

For loans disbursed before July 1, 2026, you can enroll in existing income-driven repayment plans:

• IBR (Income-Based Repayment): Payments capped at 10-15% of discretionary income. Forgiveness after 20-25 years (forgiven amount is taxable).
• PAYE (Pay As You Earn): 10% of discretionary income, forgiveness after 20 years. Being phased out by July 2028.
• ICR (Income-Contingent Repayment): Being phased out by July 2028.
• SAVE: Permanently ended by court order and settlement in early 2026. No longer available for enrollment.

If your loans were disbursed before July 1, 2026, you can stay on current IDR plans until July 1, 2028, when PAYE and ICR are scheduled to sunset. IBR remains available.

The New Repayment Assistance Plan (RAP)

RAP is the new income-driven plan for loans disbursed on or after July 1, 2026. Key features:

• Payments: 1% to 10% of total adjusted gross income (not discretionary income), on a sliding scale based on income bracket
• Minimum payment: $10/month (no more $0 payments)
• Dependent reduction: $50/month per dependent claimed on your tax return
• Interest protection: Unpaid interest is canceled each month (balance cannot grow if you make required payments)
• Principal guarantee: Loan principal declines by at least $50/month. If your payment does not cover this, a government subsidy makes up the difference.
• Forgiveness: After 30 years (not 20-25 as under previous IDR plans). Forgiven amount may be taxable.

Critical warning for borrowers with existing loans: If you take out any new federal loan on or after July 1, 2026, RAP becomes the only IDR plan available for all of your Direct Loans, including those borrowed earlier. You lose access to IBR, PAYE, and any benefits previously associated with those plans.

Public Service Loan Forgiveness (PSLF)

PSLF remains available under both current IDR plans and the new RAP. After 120 qualifying monthly payments (10 years) while working full-time for a qualifying employer (government, 501(c)(3) nonprofit, VA hospital, public school), your remaining federal loan balance is forgiven tax-free.

PTs working in nonprofit hospitals, VA healthcare, public school systems, and community health centers typically qualify. PSLF can save PTs with high debt-to-income ratios over $100,000 compared to standard repayment.

However, with the new lower federal borrowing caps post-2026, PSLF becomes less impactful for students who can only borrow $20,500/year in federal loans. At that level, 10 years of income-based payments may nearly eliminate the balance, leaving little to forgive.

When Private Loans Make Sense

Private loans are worth considering when:

1. Your credit is strong (or you have a cosigner with strong credit) and you can secure a rate below the Grad PLUS rate of 8.94%
2. You do not plan to pursue PSLF and do not need income-driven repayment protections
3. Federal limits do not cover your costs (especially relevant after July 2026)
4. You plan to aggressively repay within 5 to 10 years and want the lowest possible interest rate

Private loans are not recommended if you plan to work in a PSLF-qualifying position, need income-driven repayment flexibility, or are uncertain about your career trajectory. The protections lost by choosing private over federal are permanent.

When to Refinance Federal Loans

Refinancing federal loans into a private loan is a one-way decision. You permanently lose access to IDR, PSLF, forbearance, and other federal protections.

Student Loan Planner advises that refinancing makes sense for PTs who owe 1.5 times their income or less in student loans and do not need federal protections. At that debt level, a lower interest rate through refinancing can save considerable money over the life of the loan.

For PTs who owe more than twice their annual income, a forgiveness strategy (PSLF or IDR/RAP) is almost always the better financial path, even with higher federal interest rates.

Building Your Strategy

1. Maximize federal Unsubsidized Loans first ($20,500/year). These have the most protections and lower rates than Grad PLUS.
2. Evaluate Grad PLUS vs. private for the remaining balance. If your credit or cosigner's credit qualifies you for rates below 8.94%, private may save money, but you lose federal protections.
3. If starting before July 2026, ensure you have a federal loan disbursed before that date to lock in legacy access to Grad PLUS.
4. Plan your repayment strategy before borrowing. If PSLF is in your future, keep everything federal. If aggressive payoff is your plan, shop private rates.
5. Never refinance federal loans without a clear plan. The protections you lose are irreversible.
6. File the FAFSA every year. It is required for all federal loans. See our FAFSA guide for details.

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For the broader financial picture, see budgeting for DPT school, the real cost of applying, and our scholarships page.