Best Engineering Student Loans of December 2024

Engineering degrees are a gateway to a career in one of today's most in-demand fields. Whether you're pursuing electrical, chemical, civil, or mechanical engineering, earning your degree often comes with significant costs.

If you need help covering tuition and other expenses, student loans can bridge the gap. This guide explores the best loan options to help you finance your engineering education and reach your career goals.

Current private student loan rates

Best loans for engineering students

Why you can trust our Credible experts

The Credible editorial team is independent and unbiased. Partners do not influence our editorial content. To help you find the best student loan for your situation, we conduct thorough research and analyze thousands of lender data points. Using data-driven methodologies, we score criteria that are important to you. This allows us to objectively rank student loan lenders and products. To learn more, read our methodology below.

Methodology

To determine the best student loan lenders, Credible collected more than 1,000 points of data on two dozen companies and evaluated them on several different categories: repayment options, eligibility, interest rates, loan terms, and customer support. We assigned a score out of five stars to each lender based on our findings. Below are the weightings assigned to the general categories for the best student loan companies — which comprise individual criteria that are also weighted.

• Repayment options: 30%
• Eligibility: 25%
• Interest rates: 20%
• Loan terms: 15%
• Customer support: 10%

While the best lender for you will depend on your unique needs and financial circumstances, these findings should help answer your questions and assist you in your search for the best student loan.

Learn more about our methodology.

Start with federal student loans for engineering school

Federal student loans are available to engineering students both on the undergraduate and graduate level, as long as you're enrolled at least half-time in an eligible program.

“Federal loans are often considered the best option due to their flexible repayment plans, fixed interest rates and potential for forgiveness programs,” advises Chad D. Cummings, certified public accountant and attorney at The Law Office of Chad D. Cummings.

Federal Direct Loans come in three main types, each with unique benefits for engineering students:

• Direct Subsidized Loans: These loans are available to undergraduates with demonstrated financial need. They have annual and lifetime borrowing limits, and the government covers the interest while you're in school or during deferment periods. With a fixed interest rate of 6.53% for the 2024-25 school year, they're one of the most affordable options for borrowers.
• Direct Unsubsidized Loans: Unlike subsidized loans, unsubsidized loans don't require financial need and are available to both undergraduate and graduate students. Borrowing limits still apply, but the fixed rates remain competitive at 6.53% for undergraduates and 8.08% for graduate students for the 2024-25 school year.
• Direct PLUS Loans: PLUS loans are available to graduate students and parents of undergraduate students. They allow you to borrow up to the school-certified cost of attendance. While they come with a higher fixed interest rate of 9.08% and higher origination fees, they can cover gaps not addressed by other federal loans. Applicants must not have adverse credit to qualify.

Learn More: Subsidized vs. Unsubsidized Student Loans

One of the most significant advantages of federal loans is the flexibility in repayment. Borrowers can opt for income-driven repayment, which adjusts monthly payments based on your income and family size, with loan forgiveness possible after 10 to 25 years, depending on the plan.

Engineering students pursuing public service roles may also qualify for Public Service Loan Forgiveness (PSLF), which forgives remaining balances after 10 years of qualifying payments. Additionally, federal loans offer deferment and forbearance options, making it easier to pause payments during financial hardship.

Use private student loans to fill any funding gaps

Private student loans, offered by banks, credit unions, and online lenders, can help fill the gap when federal loans and other aid aren't enough.

“Students who need more funding beyond federal options or who have strong credit — or a creditworthy cosigner — might explore private loans,” says Cummings.

Private loans are credit-based, meaning your credit score and income play a big role in your eligibility and the interest rate you're offered. Most lenders require proof of stable income and a good credit score, which starts at 670 on the FICO scale. If your credit history or income isn't strong enough, adding a cosigner with good credit can improve your chances of approval and may help you secure a better rate.

Private loans also provide flexibility in terms of interest rates and repayment options. You can typically choose between fixed or variable rates and a range of repayment terms to suit your financial situation.

While private loans can be a vital resource for covering the full cost of your engineering degree, they lack the repayment flexibility and forgiveness programs that come with federal loans. For this reason, it's best to consider private loans only after maximizing your federal loan eligibility.

Don't overlook scholarships and grants

Loans can help you pay for school, but they generally shouldn't be your first choice. “Remember to pursue all scholarship and grant opportunities before considering loans,” advises David Rosenstrock, director and founder at Wharton Wealth Planning. “Many STEM-specific financial aid options are available for engineering students,” he adds.

Scholarships and grants don't require repayment, making them a cost-effective way to fund your education. Cummings recommends exploring funding opportunities from universities, professional organizations, and even corporate or industry grants.

“Most universities have scholarship programs specific to their engineering departments,” says Cummings. “Engineering schools often receive endowments from alumni or industry sponsors, offering scholarships based on academic performance, financial need or focus areas within engineering.”

Some organizations that offer scholarships and grants for engineering students include:

• The Society of Women Engineers (SWE)
• The American Society of Mechanical Engineers (ASME)
• The American Council of Engineering Companies (ACEC)

Start your search with your school's financial aid office or online scholarship databases to uncover opportunities to reduce your educational costs without taking on debt.

Loan repayment options for engineering graduates

As an engineering graduate, you have several repayment plans to choose from, each tailored to different financial situations and career goals.

“Income-driven repayment plans can be an excellent option for federal student loans,” advises Rosenstrock. These plans set your monthly payments at a percentage of your income — typically between 5% and 20%. After 10 to 25 years of qualifying payments, depending on the plan, any remaining balance is forgiven.

If you're working for the government or a not-for-profit organization, you might be eligible for the Public Service Loan Forgiveness program. This program forgives your remaining federal loan balance after 120 qualifying payments while you're employed full-time in public service.

The Standard Repayment Plan offers fixed monthly payments over 10 years, allowing you to become debt-free relatively quickly. There's also an Extended Repayment Plan that spreads payments over 25 years, reducing your monthly burden but increasing the total interest paid. The Graduated Repayment Plan starts with lower payments that gradually increase over time, aligning with expected income growth.

The Standard Repayment Plan can allow for the fastest and easiest path to becoming debt-free. “Engineering graduates with high starting salaries may benefit from this plan as it results in the least interest over time,” according to Cummings. However, income-driven options can make monthly costs much more affordable for those burdened with high levels of debt.