Ways to pay for graduate school

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Graduate school can further your career in meaningful ways, but it’s also expensive. If you can’t pay for graduate school out of pocket, there are plenty of ways to make a graduate degree more affordable, including student loans, scholarships and grants.

How to pay for graduate school

If you need help paying for graduate school, you can look for financial aid through the federal government, private organizations, your school and even your employer. Some of these are “free” aid, while others need to be repaid.

Scholarships

Scholarships are free gift aid and are typically given based on merit or academic performance. Because scholarships are most heavily advertised to high school and undergraduate students, scholarships for graduate students often fall under the radar.

To find scholarships for graduate school, it’s usually easiest to use scholarship search engines like Unigo, College Board’s Scholarship Search, Sallie Mae’s Graduate School Scholarship Tool and Fastweb.

Grants

Grants are another type of gift aid that doesn’t need to be repaid. While scholarships are typically based on merit, heritage and other factors, grants are more likely to require financial need.

Grants can be offered through a number of organizations and programs. Here are a few grants that you can apply for:

  • Federal grants: Grants like the TEACH Grant are available through the Free Application for Federal Student Aid (FAFSA). You can view the complete list of federal grants on the application.
  • State grants: Most states offer grants based on financial need. You’ll apply for these through the FAFSA.
  • Private organization grants: Many private organizations offer substantial grants to graduate students, but they are typically only offered to members of the organization. Contact local or national organizations to see what’s available and whether you’re eligible.

Fellowships

Fellowships are programs that typically cover the cost of tuition and offer a stipend in return for things like research studies, peer tutoring and student teaching. Some fellowships even offer housing stipends.

Fellowships are similar to scholarships, but they’re usually offered by degree-specific departments within the college or university. For example, if you’re getting a graduate degree in English, the English department would be where you complete your fellowship.

Fellowships are offered to students who excel academically and are generally very competitive programs.

Work-study

Work-study is a type of part-time job offered through universities as a way to help students pay for school. Work-study programs are usually more flexible than off-campus jobs, and unlike with scholarships and grants, the funds you earn go directly to you. Work-study is available through the FAFSA; you’ll simply mark your interest when you fill out the form.

Tuition assistance and reimbursement programs

Some employers offer to help you pay for school while you remain employed. Some examples include Amazon, Apple, Best Buy, Bank of America, Chick-Fil-A, Chipotle, Comcast, Disney and GAP.

If you’ve taken out student loans, some employers will also help you pay them off. Employers can contribute up to $5,250 in tuition reimbursement with tax benefits for both the employer and the employee, so if you’re not sure if your employer offers a benefit, it’s worth asking.

Keep in mind, though, that some employers may require that you be with the company for a certain period before you can qualify for tuition reimbursement or assistance. Make sure you understand the eligibility criteria during your job search.

529 plans

A 529 college savings plan allows both parents and students to save for college on a tax-free basis. All of your contributions to a 529 plan grow tax-free, and you can take them out tax-free, as long as they’re for qualified educational expenses.

What’s more, some states offer other tax breaks, such as deductions and credits, when you contribute to your 529 plan.

If you’re thinking about attending graduate school but have some time, consider opening a 529 plan and start setting aside cash to help you get through school.

Federal student loans

Graduate students can choose between two federal student loans: Direct Unsubsidized student loans and Direct PLUS Loans, also known as grad PLUS loans.

With Direct Unsubsidized student loans, you can borrow up to $20,500 each academic year, with an aggregate limit of $138,500. With grad PLUS loans, you can borrow up to the entire cost of attendance minus any other financial aid you receive.

Within each loan program, interest rates are standardized for everyone who qualifies. But grad PLUS loans typically charge a higher interest rate and a higher upfront loan fee than Direct Unsubsidized Loans. Grad PLUS loans also require a credit check, though only to ensure that there are no major negative items on your credit reports.

You’ll need to fill out the FAFSA to apply for federal graduate school loans. Just keep in mind that any money you borrow will have to be paid back, usually over a period of 10 to 30 years.

Private student loans

Graduate school loans from private lenders are a type of student loan that originates from banks, credit unions and online lenders. Whether you’re going to law school, business school or medical school, it’s likely that there’s a lender offering student loans specifically for your degree.

Private student loans have a wide range of interest rates that are determined by your credit score and financial health. If you have good credit, your interest rates could be lower than what you get through federal loans, but the inverse is true as well. Interest rates can also be either fixed or variable.

The biggest downside of private student loans is that they don’t come with the benefits of federal student loans, like income-driven repayment or long forbearance periods, which is why it’s important to maximize the federal aid first.

Affordable graduate school options

When it comes to making graduate school more affordable, there are practical ways to lower the cost of your next degree.

Online programs

Online graduate programs are often much more affordable than in-person attendance because there aren’t as many costs to factor in, like on-campus housing and resources.

With many online programs, you’ll be responsible only for tuition costs while still getting a quality education. Just make sure that the program is fully accredited and from a credible institution before enrolling.

In-state public universities

When possible, seek out universities in your state that offer the degree program you’re looking for — doing so could save you thousands of dollars a semester. Public universities are also generally more affordable than private while offering a similar quality of education.

Tuition reciprocity programs

Some states have agreements with neighboring states that allow out-of-state students to attend college at in-state rates. For instance, the Western Undergraduate Exchange allows students within 16 participating states to attend college at no more than 150 percent of the school’s in-state rate, saving students an average of $10,000.

Next steps

When it comes to your graduate education, it’s important to start making a plan as soon as possible. Here are three steps to crafting a plan to pay for school:

  1. Consider your own interests and needs: Are you going to be participating as a full-time or half-time student? When you’re a full-time student, you’ll complete your degree and can start your career earlier, but half-time attendance can leave more room for a job that can help you fund your education.
  2. Apply aggressively for scholarships: Start applying for grants, fellowships and scholarships as soon as the the applications open, and apply for as many as possible. The amount of money you win this way will dictate how much you’ll need to borrow in student loans.
  3. Decide what you can realistically afford: Once you have your award money totaled up, think about your financial future. Will your master’s degree still leave you with six-figure student loan debt? The return on investment (ROI) of your degree could help you determine which type of school you pursue and how long you could be paying off student loans.

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