You may be used to applying for financial aid from your undergraduate college years, but applying for financial aid as a graduate student can be a little bit different. Even if you’re now comfortable filling out forms for loans, scholarships, grants, and other forms of financial aid, it’s important to know the differences in undergraduate and graduate funding.
So, when compared to undergraduate students, how much financial aid do graduate students get? It’s no secret that your tuition costs may increase as a grad student, and some grad students may even be frustrated to know that there are fewer funding options for them.
However, when you take into account the differences in lending limits, it becomes clearer that graduate students still have some advantages when it comes to receiving financial aid. Keep reading to find out all you need to know about financial aid for graduate students.
First of All, What is FAFSA?
Most people are familiar with FAFSA from filling out financial aid applications during their undergraduate degrees. FAFSA stands for Free Application for Federal Student Aid.
FAFSA is a program from the US government that helps students attend college by providing student aid. Any student who wants financial aid for college should fill out a FAFSA form.
You’ll need to fill out a FAFSA form before every academic year in order to qualify. Furthermore, there aren’t many eligibility restrictions in order to receive financial aid through this program, so it’s open to nearly everyone.
Graduate Students and FAFSA: What You Need to Know
There are some differences between applying for FAFSA as an undergraduate and as a graduate student. For example, there are more limited funding options as a grad student.
One of the biggest differences is that as a graduate student, you are more likely to be considered an independent student. In other words, you’re no longer dependent on your parents so you don’t need to provide information about them and their finances.
Another major difference when applying for FAFSA as a graduate student is that you will no longer be eligible for subsidized loans. As an undergraduate, you don’t pay interest on the loan you take from the federal government while you’re still in school. This changes when you’re a grad student — you’ll collect interest as soon as you take out a federal loan.
A Few Facts About Federal Student Aid
Learning more about available financial aid for a graduate degree is key to understanding where and how to apply for loans and grants. Here are a few things you should know:
- The Federal Student Aid Department, through the FAFSA program, provides over $120 billion yearly in financial student aid.
- You can complete the FAFSA form online for free at fafsa.gov.
- You might be eligible for a Pell Grant, which, unlike a loan, doesn’t have to be paid back. To be eligible, you need to be enrolled in a teacher certification program.
- There are other federal student aid programs, such as the TEACH grant, The William D. Ford Federal Direct Loan Program, and the Federal Work-Study Program. You can learn more about them here.
- Aside from applying for federal aid, you should also check financial aid offered by your state, employer, local foundations, or your school.
FAFSA Eligibility for Graduate School
In order to qualify for federal financial aid, you need to meet the minimum eligibility criteria. Though there is no income cap that would make you ineligible, there are still a few criteria you’ll have to meet, such as:
- Must be a U.S. citizen or an eligible non-citizen
- Must be accepted at an institution for a professional or graduate degree program
- Must have financial need
- Cannot have any record of drug-related offenses while receiving previous financial aid
If you meet these specific points, then you can apply for FAFSA. As mentioned earlier, since you’ll be applying as an independent student there is no need to submit your parents’ financial details, however, there are some exceptions. When applying for financial aid for certain degrees or programs, like medical or law school, you may be required to submit your parents’ income.
Financial Aid for Undergraduate Students vs. Graduate Students
It’s clear to see that undergraduate students typically have better options when it comes to financial aid. Grad students often find it more challenging to find adequate financial aid options without having to resort to taking out personal loans.
For example, the Pell Grants are awarded to between 7 to 9 million undergraduate students each year, with the maximum amount being $6,345. Unfortunately, the majority of Pell Grants aren’t available to graduate students, with the sole exception being grad students enrolled in a post-baccalaureate teacher certification program.
Additionally, interest rates are higher for graduate students. Undergraduates typically pay an average of 4.66% interest rates on their student loans, while graduate students pay around 6.22% on theirs.
That being said, graduate students are able to borrow more than undergraduates. Undergrad students are capped at around $12,500 in yearly federal loans compared to the $20,500 yearly federal loans that grad students are eligible for.
Other Sources of Financial Aid for Graduate Students
Aside from federal aid through FAFSA and private loans, there are some other places grad students can turn to for grants, scholarships, and loans.
Some grad students may opt to apply for an assistantship program through their schools, which allows them to become a teacher or research assistant. The positions usually include stipends, and some also offer other benefits like housing.
Fellowships and Scholarships
After being accepted into a grad program, reach out to the department head or student services to inquire if there are any relevant fellowships or scholarships you can apply for. Some schools may keep an updated list of different local or national organizations that provide financial assistance, so it’s a good idea to check with your school as well as searching online.
If you’re a veteran or former service member, you might be eligible for certain educational grants. Consult with the U.S Department of Veterans Affairs to see if you’re eligible for any aid through them.
Grad School Grants
There are programs that distribute grants to graduate students that you could be eligible for. Some of these programs include the TEACH grant for those studying to become teachers in a needed field. You’ll still need to complete a FAFSA form in order to apply for the TEACH or other relevant grand school grants.
Interest Rates & Borrowing Limits for Graduate Students
Depending on your school and financial need, the amount you receive for your loan can vary.
On average, graduate students might expect to receive around $10,000 in grants and an additional $20,000 in loans.
When applying for federal loans, there are two main types of financial aid you can receive: a direct unsubsidized loan, called the Federal Stafford Loan, and a Federal Grand Plus loan.
The Federal Stafford Loan is unsubsidized and has borrowing limits. On this type of loan, you’ll pay an interest rate of around 6%. Graduate students can take out a Stafford Loan up to $20,500, with a cap of $138,500 limit between both undergraduate and graduate loans.
However, for students in certain programs, like medicine, the lifetime cap for this type of loan goes up to $224,000.
For a Federal Grant Plus Loan, the interest rate is around 7% and gives you a much higher borrowing limit. With this loan, you can cover other expenses besides your tuition, such as the cost of transportation, living expenses, book, and more.
Still, it’s advisable to be cautious with this type of loan, since the more you want to cover with a loan, the more debt you’ll have to pay off after graduation.
Aside from these two federal loans, some students also opt to take out private loans from banks or lenders in order to help pay off the remaining cost of their graduate education. It’s important to keep in mind that these private loans often have higher interest rates and usually don’t offer as many repayment options.
Hopefully, this article gave you a better understanding of how much financial aid graduate students get. While it may seem stressful to apply for financial aid, there are options out there to take the burden of financing your education off your back.
At University of the People, we offer tuition-free online learning, so you don’t even need to worry about taking out thousands of dollars of loans. In addition to not charging tuition, we offer merit-based scholarships to cover the administrative fees for students in need.