Occupational therapy school is a big investment — and for many of us, loans are part of the journey. But borrowing wisely can save you thousands (and a lot of stress) later. Here’s how to approach loans smartly, understand the fine print, and set yourself up for success.

1. Borrow Only What You Truly Need

It can be tempting to take out the full amount offered — but only borrow what covers your real expenses like tuition, books, living costs, and essentials.

Tip: Treat student loans like a paycheck you have to repay — be selective and budget-conscious.

2. Understand Subsidized vs. Unsubsidized Loans

• Subsidized loans: The government pays the interest while you’re in school. Best option if available!
  
• Unsubsidized loans: Interest starts accruing immediately after disbursement — even while you’re studying.
  

Always accept subsidized loans first if you qualify.

3. Know What a Good vs. Bad Interest Rate Looks Like

• Federal loan rates (as of 2025): Around 5-7% for grad students. This is standard and considered fair.
  
• Private loan rates: Can be much higher (8%–14%+), depending on your credit score.
  

Red Flag: If the loan offers a variable interest rate that could spike, or anything over 10% fixed, be cautious!

4. Be Careful with Private or “Alternative” Loans

• Private loans may lack flexible repayment options (like deferment, income-based repayment).
  
• Interest rates might be higher and terms stricter.
  
• Some companies advertise “student-friendly loans” — always read the fine print and compare with federal options first.
  

Borrow wisely, plan realistically, and protect your future self.
An OT degree is worth it — but managing your loans well will make your post-grad life so much smoother.