How To Pay For Grad School: Best Tips For Smart Funding

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School can be expensive, especially graduate school. But this shouldn’t stop you from earning your higher education degree. If you’re looking for how to pay for grad school, we have many ideas in mind! From opting for untraditional choices like online college to loan forgiveness and debt-free options, paying for grad school should and can be achieved.



Female graduate smiling and looking up
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How To Get Through Grad School Debt-Free

There are a variety of ways to afford graduate school. We will dive deeper into the following options:

  • Loans and Grants
  • Employer Assistance
  • Scholarships
  • Work-Study
  • Military Benefits
  • Online Education


Where To Start: Consider Your Resources

Before applying for graduate school, it’s useful to conduct a personal budget analysis. In general, it helps to look at how much graduate school will cost overall. After you look at this, you’ll be able to better measure how much assistance you’ll need.


It’s likely that you’ve come away with a number and may feel overwhelmed. At this point, rather than freaking out, it’s helpful to make a plan. You don’t have to do this alone. There are a variety of people you can talk to in order to receive aid or advice.


These resources include:

  • Your desired college’s Financial Aid Office
  • Faculty
  • Fellow students
  • Family
  • Employers


Four Key Steps

There are some key steps to help you find the funding or receive the financial aid you need.



1. Get Organized


Receiving financial aid does take time, so it’s best to get all documents organized and ready for applications. Some things you may need include: letters of recommendation, personal essays, and transcripts.



2. Apply Early


For graduate school, applying early is beneficial, as the pool for funds is divided amongst all applicants — so applying early means there is more funds and it also shows intent.



3. Cost-Benefit Analysis


You may have already conducted a cost-benefit analysis of going to graduate school, but did you factor in your financial aid? To do this, you can:

  • Add all costs together (tuition, degree, transportation, etc.)
  • Subtract money from grants, loans, and scholarships
  • Research your expected future earnings


4. Analyze Financial Aid Packages


You may receive FAFSA (federal aid) or specific aid from your school or other third parties. Be sure to read over all your options. If your school offered you a package, you may even try to negotiate terms with them directly.



Different Types Of Loans

There are a variety of loans and financial aid to choose from. Here’s the different types and how they work. Try following and evaluating this 1-2-3 approach:



1. Personal Savings


First use money that you don’t have to pay back. If it’s an option, start with your savings or budget any money you can from your paycheck.



2. Federal Loans

  • Direct Unsubsidized Loans: For each year, graduate students can borrow up to $20,500 annually. The interest rates are determined and fixed.
  • Direct Graduate PLUS Loans: These loans can be taken out up to the amount you need for attendance. To be granted a loan, you have to first pass a credit check. Each loan disbursement also deducts a fee.
  • State Aid: State aid is also an option.


3. Private Graduate School Loan


Outside of state-funded loans and personal savings, you can consider private loans.



Deferring Undergraduate Student Loans

Paying back loans can feel like an overwhelming and constricting burden to hold. Often, students will have loans from their undergraduate education. For those who enter the workforce, paying back student loans will be expected in some cases right away.


But if you are going to attend graduate school, you may have more loans to take out. In this case, deferring your undergraduate loans is a good option. Deferring loans is basically postponing paying them back. Talk to your loan officer about your options if you enter graduate school with undergraduate loans.



1. Get “Free Money” With Grants


In a sense, grants are like “free money.” Unlike loans, grants don’t have to be paid back. The caveat is that grants are highly competitive and only awarded to some students. That said, it’s always worth a shot.



2. Employer To Pay


Before you start studying and earning your graduate school degree, it may be worthwhile to explore employment opportunities at a company that offers financial support for school. For the most part, companies that offer grad school tuition assistance require that the degree is somewhat related to the job role.



3. How To Borrow Responsibly


No matter what kind of financial support you elect to receive, it’s of utmost importance to borrow responsibly. While you don’t know your exact salary expectations upon graduation or even when you will start working, you do know how much you are borrowing and the repayment fees. Keep an eye on interest rates and explore your options before you sign any contracts.


Be sure to check out the federal student loan calculator to help you better understand your finances into the future.



4. Graduate Scholarships, Fellowships And Assistantships


If you’re a recent graduate or looking to gain real-world experience while finalizing your studies, you can apply for:

  • Scholarships: Like grants, scholarships are “free money” that doesn’t get paid back. Instead, they are merit-based and awarded to students based on achievements.
  • Fellowships: Fellowships are academic awards that are highly sought after. They offer funding to students to perform research. Some may even pay for students to travel as part of the project.
  • Assistantships: Students can pay back some of their tuition by participating in assistantships. Assistantships means students help teach or perform research in exchange for tuition assistance and sometimes even health benefits.


5. Available Credit / Credit Union


Instead of seeking private or bank loans, some students prefer to work with credit unions. This is because credit unions may offer lower interest rates and/or better service.



Piggy bank to save college money
Photo by Fabian Blank on Unsplash



Additional Benefits

Lifetime Learning Tax Credit


When you fill out your taxes, you may be able to claim up to $2,000 as expenses for your higher education. To qualify, your adjusted gross income can’t be more than $67,000.



Mistakes To Avoid

When paying for graduate school, keep in mind these common mistakes so that you can avoid them:

  • Waiting to pay back loans
  • Not working or saving while in school
  • Not applying for free aid like scholarships and grants
  • Not asking about interest rates and offers


Consider An Online Degree

Another surefire method to decrease student loan debt and afford graduate school is to think of alternative routes like online degrees.


The University of the People offers Masters programs in Business Administration and Education for a fraction of the cost of traditional on-campus programs. With a mission to provide affordable and accessible education to all students around the world, the University of the People is 100% online and tuition-free.



The Bottom Line

At the end of the day, money is not what should stop you from earning your degree. No matter what level degree you are looking to earn, there are a variety of options to help pay for school. The aforementioned tips are aimed to assist you on how to afford graduate school, but they can also be applied to undergraduate degrees.