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Paying for Graduate School

One of the biggest obstacles to attending graduate school is the question of how to pay for it. Tuition for one year of law school averages over twenty thousand dollars; at private law schools it’s around thirty thousand. Medical school costs are even higher. And while non professional graduate degrees don’t cost as much as law and medical degrees, they’re still expensive, averaging closer and closer to twenty thousand dollars a year. That’s the first cost most people think about when considering paying for graduate school. The second cost, which is probably even bigger, is the loss of income you’ll suffer while you’re in school. You’ll certainly want to sit down with a calculator and weigh the pros and cons of attending grad school. Most people who do so will find that the costs are worth it, with tuition costs and loss of income being more than made up for by increased future earnings.

And there’s no doubt that graduate school is expensive. But if you really want to attend, and you think you’ve got what it takes to earn an advanced degree, you shouldn’t let money worries hold you back. There is lots of financial aid available for worthy grad students. And, depending on your circumstances, there is one decision you can make which will radically reduce your grad school expenses. It won’t be possible or appropriate for everyone considering grad school, but you can save tens of thousands of dollars by enrolling in a graduate program of a public university of the state in which you’re a legal resident. Doing so may not be your first choice, but you should give it strong consideration if you’re concerned about finances, and if a public university in your state has a suitable graduate program. Alternatively, if you can’t find a program at a public university in your state, be sure to look at surrounding states-more and more states have reciprocal agreements with neighboring states which allow each other’s residents to attend their schools at state tuition rates. You’ll find this information on the university website, or by contacting your state department of education. If neither of these options works for you, you may be able to attend an out of state school for a year, and after that be considered a resident for tuition purposes. But some states prohibit granting residency to someone who’s moved to the state to attend school. Check with the university.

Of course, tuition is a large part of what it will cost you to go to grad school, but it’s nowhere near the complete story. You’ll also be buying lots of textbooks, and as a college graduate, you know how expensive those can be. Then you’ll need to secure housing, which will run several hundred dollars a month at a minimum. You can save money on housing by making your arrangements as early as possible after you’ve been accepted-the longer you wait, the fewer choices you’ll have, and the more expensive they will be. When it comes to student housing it truly is the case that the early bird gets the worm. The next biggest chunk of your budget will be groceries and related expenses. Yes, you can live on ramen noodles for a few weeks if you have to, but you certainly don’t want to, and by careful planning and budgeting there’s no reason for things to come to that. Be realistic about how much money you’ll need for food every month. And don’t forget things like laundry supplies, trash bags, light bulbs, personal hygiene products, etc. They may seem like incidentals, but if you don’t plan for them they quickly add up. How much is basic and long distance phone service? And what sort of lifestyle will you be wanting at grad school? Yes, you’ll often be burning the candle at both ends, and you won’t probably won’t be attending many parties. But will you need cable TV? How about the occasional movie rental? What about eating out once a week or so? And don’t forget transportation costs, if those apply to you. Ideally, you could get an apartment within walking distance of school and shopping, but that’s not always possible. You may well need your own vehicle, in which case you’ll be paying for at least gas and insurance. If you’re making car payments, it might be best to sell the car and buy a used one for cash. If you have no car, you’ll need money for taxis and buses, and car rentals on occasion. All these figures add up to quite a bit, no matter how closely you watch your money. And then you’ve got school required health insurance, possible lab fees, parking expenses, etc. Each school you’re considering should have a section that tells you about how much all this comes to for the average student, which makes it easy to compare different schools. But remember, everyone’s situation is different, and your costs may well be higher or lower.

Once you know how much grad school is going to cost you, the next step is figuring out how to pay for it. There are three main sources of funds for grad school money. The first one, of course, if yourself. If at all possible, it’s best to pay for as much of your graduate school as possible without resorting to borrowing. Many students have savings they can tap into, and some have parents that will assist them. One idea that many people use to fund their graduate studies is taking a year or two after to college to work and save before getting their advanced degree. Others are married, and the spouse’s income is used to support them while in school, and also pay for some educational expenses. Another option is part time work either during the school year, or between semesters. Many grad students find that, with their considerable knowledge of a subject matter, they’re able to make money tutoring school kids or even college undergraduates. Others take part time jobs in retail stores or other businesses which will work with them when it comes to scheduling and flexibility. Working full time while pursuing a graduate degree is extremely difficult, and not recommended. Both your job and your education would suffer. But part time work can often be found, and many students find it very manageable to work 20 hours or less a week while pursuing their grad studies. Of course, you’re the best judge of what you’re capable of, and you’ll have to make your own decision.

In addition, many graduate schools or their associated universities will have work study programs, or graduate school jobs, which are partially funded by the federal government. Work study doesn’t have to be repaid, and can be an important part of paying for graduate school. And don’t think that work study means you’ll be washing dishes in the cafeteria. That’s highly unlikely. You’ll probably wind up doing work of an academic nature that’s directly or indirectly related to your field. Once again, it’s important to apply for work study as early as possible if you need financial aid, as there are only limited funds and positions available. Check with your financial aid office for deadlines, positions, and procedures. Another option is tuition reimbursement from an employer. If you’re working now, and considering going back to school to get an advanced degree, check with your human resources department. More and more companies offer tuition reimbursement for employees. And some are willing to allow you to work a part time schedule while you earn your degree. One thing to keep in mind about tuition reimbursement programs is that you’ll probably have to pay the school yourself up front, and then your employer will write you a check at the end of the semester or academic year. And many will require a certain grade level to qualify for funding. But if you’re fortunate enough to be working for a company that offers this benefit, and is willing to let you work part time while earning your degree, you should strongly consider taking advantage of it.

The second main source of money for grad school is the federal government, through their student loan program. You may have taken out student loans to finance your undergraduate education. Did you know the government also makes loans to graduate students? It‘s true. (Pell grants, which don’t have to be repaid, are limited to undergraduate students. The same is true of PLUS loans, in which parents borrow money to help their child pay for school.) The main loan program is called the Federal Stafford Loan. Some of the funding for Stafford loans comes directly from the government (direct loans), and some comes from banks (FFELP loans). Stafford loans are not based on financial need, nor is credit approval required. There are two kinds of Stafford loans, whether direct or FFELP-subsidized and unsubsidized. If your loan is subsidized, you won’t be charged any interest as long as you maintain half time status at your university, and for six months after you leave school. With an unsubsidized loan, you’ll be charged interest immediately, although you won’t be required to make any interest payments until you leave school or drop below half time status. You may borrow up to 8500 dollars a year for grad school in subsidized loans. Combining both programs, a grad student may borrow up to 18,500 dollars a year, with a cap of 138,500 dollars (including any undergraduate Stafford loans). In addition to the Stafford Loan program, the federal government also makes available Perkins Loans. They require that you demonstrate financial need to be eligibility, and loans are up to five thousand dollars a year for grad school. In addition, the government has other loan geared toward students pursuing certain programs, such as medicine.

So if you really want to go to graduate school, the money is available. But you’ll need to apply as early as possible as the funds for these loans aren’t unlimited. Contact the grad school you’ll be attending. They’ll have all the paperwork you need, as well as helpful advice on filling out all the forms correctly. You will be required to turn in a Free Application for Federal Student Aid (FAFSA). This is a multi page document which will take at least a couple hours to fill out, and you’ll need your tax returns handy. Many universities will also require you to fill out their own form before receiving financial aid. Of course, the fact that the money is available doesn’t necessarily mean it’s wise for you to borrow as much as you’re able. It’s easy to forget while you’re in school that your student loans are adding up and will have to be repaid in the not too distant future. Some students report that they wish they’d borrowed less than they did to get through college and grad school. It’s imperative that you have a realistic idea of just how much you owe, and how much your monthly payment will be, and whether that payment will be a burden or not. You’ll want to be aware of starting salaries for people with your degree in your field, and be honest with yourself about your employment prospects. Do you really want to graduate with a master’s degree in English literature with a five hundred dollar a month student loan payment? And you should be aware that student loans can no longer be discharged through bankruptcy. This is not to discourage you from obtaining a student loan for the purposes of paying for graduate school. That can be an excellent choice that more than pays for itself in the long run. It’s just a reminder to use wisdom and caution when borrowing to finance your grad school, and don’t take on a bigger obligation than you can afford.

And this isn’t just a concern for English majors. With the high borrowing limits, it’s easy and very tempting to borrow more and more money. And not only are there federal loans available, but there are also private companies that will loan you money based on good credit, or with a co-signer. So you could wind up owing far more than you originally planned on when you first contemplated going to graduate school. Especially if you’re pursuing a degree in medicine or law. These two degrees are very expensive to obtain. In addition, future lawyers and doctors will have no opportunity for part time work during their schooling, as the course work is just too intensive. So teaching and research assistantships are out of the question. For most future lawyers and doctors, getting through grad school without borrowing is simply impossible. If you’re looking at either of these programs, and the cost is a concern, you should certainly consider enrolling in a public in state university to keep your costs to a minimum. Law students, after their first year, will be able to pursue work as summer interns in law offices. Some of these jobs pay very well, and can go a long way toward paying for college and keeping your student loan debt to a minimum. And for future doctors, the federal government, in addition to some states and municipalities, have tuition repayment programs. If you agree to work in an area that’s presently underserved by medical professionals, they will repay a certain portion of your student loans for every year you work. This is one option to consider if you’d like to go to medical school, but are concerned that you’ll have a huge debt burden. Not only will you be providing a much needed service to people who will greatly appreciate it, but you’ll also be working off tens of thousands of dollars in student loan debt.

The third major source of financial aid for grad school is the school itself. You should be aware that university based aid for grad students is a very different thing than university based aid for undergraduates. One of the biggest differences is that much of the aid to graduate students is handled by individual departments. The faculty in each department have wide discretionary power to allocate and award the aid as they see fit, to the most promising and/or deserving students. You should find a lot of information about how much aid is available in your department by consulting the university website or other materials. It’s recommended that you get as much of this information as you can before even applying for admission to the school. Speak with someone in your department who’s knowledgeable about what aid is available, and what your chances of securing it are. Don’t be afraid to ask questions about how aid is distributed and how much; departments are used to this. They want to attract the best students possible, and they know that financial considerations are a major factor for almost all students, so they don’t mind being helpful. And, while most aid is handled departmentally, not necessarily all of it is. Be sure and ask about university wide programs for graduate students. Another thing you’ll need to find out is the method of applying for financial aid. Some schools automatically consider all applicants for all aid when they consider their application. Others require a separate application for financial aid. Don’t be caught by surprise.

University based financial aid takes many forms. Probably the most desirable form of grad school aid is the fellowship. This is a cash award that doesn’t need to be repaid or worked for. It’s simply a gift. A fellowship is really just a fancy word for scholarship; both mean the same thing, and you may run across both terms in your reading. Most fellowships are awarded by the university for an excellent academic record, but some are also given to students because of financial need. Fellowships can be for one to three years, and they can go a very long way toward paying for graduate school. Some can be renewed, others are for one year only. You will need to make satisfactory progress and receive good grades in order to renew an eligible fellowship. Of course, the size of fellowships varies greatly. Some are for a few hundred dollars the first year, while others cover all costs for the entire course of graduate school, along with a stipend for living expenses. Most fall somewhere in between. (While we’re on the subject of fellowships, now’s a good time to mention that fellowships are also available from sources other than the school. Many professional groups, government departments, and non profit organizations offer fellowships, some of them quite generous. You’ve probably heard of some of these, such as the Truman Fellowship, named after former president Harry S. Truman. The competition for these national fellowships is quite fierce, and the odds of getting one are nowhere near as good as the chances of getting a university based fellowship, but if you think you’ve got a chance, by all means go for it.) And while a few university based fellowships are based on financial need, as we’ve said, most are not, and hinge upon a good GPA and test scores, essays, and recommendations, with the first two being the most important factors. If you’re still in college, it’s important that you do your very best at your studies if you’re contemplating attending grad school. In addition, you’ll want to prepare thoroughly and systematically before taking any tests required for applying to your schools. Doing these two things will enable you to get as much fellowship money as possible, and get through grad school with as little debt as possible.

Another form of university based financial aid for graduate school is the assistantship. The two most common are teaching assistants and research assistants. The great thing about assistantships is that they’re very generous, and don’t have to be paid back. You work for your financial aid by assisting the professors in the classroom, lab, or elsewhere. Teaching assistants often teach classes on their own, or assist a professor or professors as they teach, or both. Many TA’s have their own office, and have close contact and association with full faculty members. This sense of camaraderie with professors is one of the best things about being a TA, according to many who’ve done it. They also have the respect of the students they instruct, and receive invaluable experience in teaching. Research assistants, instead of assisting professors in the classroom, do their work on computers, or in labs, libraries, or other facilities. There are also assistantships in other departments, in the administration, in the library, etc., at many schools, so don’t forget to look into that possibility. In most grad schools, students who are awarded assistantships are granted tuition waivers, and are given a stipend to boot. Often, but by no means always, the combination will be enough to pay for grad school all by itself. Again, you’ll want to do as much research as possible in this area-look at online catalogs and other materials, talk to current and former grad students who’ve been to the school, and call someone in the department to find out how many assistantships are awarded, how much they pay, and what your chances of receiving one are. If you have an excellent academic record, your chances of receiving one should be very good. Grad schools, just like undergraduate colleges, want to attract the best possible students, and use financial aid as an incentive.

Read Next Article: Financing Grad School

Last Updated: 10/01/2013

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