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If you want to boost your income potential over the life of your career, earning a postgraduate degree can be a smart idea to get there faster. On average, individuals with master’s degrees earn nearly $13,000 more annually than their peers with bachelor’s degrees—a substantial return on investment.
However, graduate school can be expensive. According to the National Center for Education Statistics, the average cost of tuition and required fees to attend graduate school (both public and private) was $19,314. That number doesn’t include some significant expenses, such as room and board, so you should plan to spend even more to complete your degree.
If you’re researching how to pay for grad school, you have several options including gift aid, work-study programs and student loans.
5 Ways to Pay for Grad School Without Taking on Debt
There are many financial aid programs available to graduate and professional students. If you’re wondering how to pay for grad school without borrowing money, consider these options.
1. Start Looking for Free Money
As a graduate student, you can qualify for gift aid—financial aid that doesn’t have to be repaid. Graduate gift aid can come in the form of grants, scholarships or fellowships.
- Grants. Grants are usually awarded based on financial need. For example, Hispanic graduate students attending Florida universities can apply for the José Martí Scholarship Challenge Grant Fund program. Eligible students can receive up to $2,000 per year.
- Scholarships. Graduate scholarships are typically based on academic or professional achievements. One scholarship available to graduate students is the CyberCorps: Scholarship for Service. Graduate students pursuing a career in cybersecurity can receive up to $34,000 per year for as long as three years.
- Fellowships. Fellowship programs give funds to promising graduate school students so that they can focus on their studies without having to take on teaching or research responsibilities. They are awarded by schools, professional associations and nonprofit organizations. For instance, the National Science Foundation awards its Graduate Research Fellowship to outstanding students pursuing careers in science, technology, engineering and mathematics (STEM). Eligible students can qualify for up to $34,000 per year, as well as a $12,000 cost of education allowance for tuition and fees.
You can also search for graduate school gift aid programs via FastWeb, GoGrad and Big Future.
2. Apply for Assistantships
As a graduate student, you can offset your education and living expenses by taking on an assistantship. Assistantships are paid positions offered by some universities. In return for working a specific number of hours a week, you’ll usually get a tuition waiver and a monthly living expense stipend.
In an assistantship, you could help professors with grading or teaching, assist faculty with their research or handle administrative tasks.
If you’re interested in a university assistantship, contact your major’s department head to see if there are any open opportunities, or check your school’s job listings.
3. Utilize the Federal Work-Study Program
The federal work-study program is available to graduate students as well as undergraduate students with financial need. In a work-study program, you’ll get a job related to your field of study and use your wages to pay for a portion of your education costs. As a graduate student, you can be paid hourly or receive a salary, depending on the position and the hours required.
To take advantage of the federal work-study program, make sure you complete the Free Application for Federal Student Aid (FAFSA) and contact your university’s financial aid office to discuss your options.
4. Research State Programs
To help fill high-need areas, some states offer tuition assistance or reimbursem*nt programs for graduate students in certain fields. In return for help with your education expenses, the state will usually require you to fulfill a service obligation working within the state after you complete your master’s degree. Here are some examples of state programs:
- Ohio. Graduate students that are Ohio residents but completed their undergraduate degrees in other states can apply for the Choose Ohio First program. To qualify, students must be pursuing a career in STEM and attend a public Ohio university.
- South Carolina. South Carolina Teacher Loan Program is a loan/scholarship program. Graduate students that plan to teach after graduating can receive up to $5,000 per year to pay for their degrees. The loan can be forgiven if the student teaches certain subjects or in designated geographic areas.
- Tennessee. The Tennessee Graduate Nursing Loan Forgiveness Program encourages nurses to enter a faculty or administrative position in a nursing education program within the state and agree to work at an eligible institution for at least four years. The program will pay up to $7,000 per year toward the student’s tuition and fees. However, the award converts to a loan if the student doesn’t meet obligations.
To find out if you’re eligible for a tuition assistance program, contact your state education agency.
5. Talk to Your Employer About Tuition Reimbursem*nt
There are some jobs that pay for grad school to recruit and train top talent. For example:
- The Home Depot. Full-time hourly employees with The Home Depot can receive up to $3,000 per year in tuition reimbursem*nt benefits if they’re in graduate school.
- Verizon. Verizon partnered with Bellevue University to offer degree-granting programs to employees. Full-time workers can receive up to $13,250 in academic support.
- Teach for America. While Teach for America doesn’t cover graduate school costs itself, participants in the program can qualify for substantial discounts at certain universities. For example, Teach for America members and alumni can receive 29% off their tuition at American University.
It’s not just big companies that offer tuition reimbursem*nt; many small businesses do as well. Talk to your human resources representative or direct manager to see if tuition reimbursem*nt is part of your employee benefits package.
How to Pay for Grad School With Student Loans
Unfortunately, gift aid and other financial assistance programs may not cover the full cost of graduate school. If that’s the case, you can use student loans to pay the remaining amount. Graduate student loans can be either federal or private.
Federal Loans for Graduate School
If you’re in graduate school, there are two federal loan options:
- Direct unsubsidized loans. If you need to borrow money, start with Direct unsubsidized loans. They have lower interest rates and fees than PLUS Loans, so they will cost less over the length of your repayment term. They don’t require a credit check, but there is an annual and aggregate borrowing limit.
- Grad PLUS loans. Unlike unsubsidized loans, PLUS loans don’t have restrictions on how much you can borrow. You can apply for your university’s total cost of attendance.
However, PLUS Loans can be expensive. They have the highest interest rate of all federal loans, and they charge a disbursem*nt fee. PLUS Loans also require a credit check. If you have a low score, you’ll need an endorser to apply for a loan with you.
| Direct unsubsidized loans | Grad PLUS loans | Private student loans | |
|---|---|---|---|
Interest rate | 6.54% | 7.54% | Fixed: 2.99% to 12.94% Variable: 0.99% to 13.19% |
Disbursem*nt fee | 1.057% | 4.228% | None |
Credit check requirement | No | Yes | Yes |
Maximum loan amount | $20,500 per year;$138,500 aggregate limit | Up to total cost of attendance | Up to the total cost of attendance |
Private Loans for Graduate School
Private graduate school loans are issued by private banks, credit unions and online lenders. Unlike federal loans, they typically don’t have limits on how much you can borrow, and you can choose a loan term as long as 20 years to get a smaller payment.
However, private student loans have some drawbacks. Your interest rate is dependent on your credit score, and if your credit isn’t good or excellent, you may not qualify for a loan. Private loans also have fewer repayment options and benefits than federal loans, and they may have higher interest rates.
Despite their disadvantages, private loans can play an important role if you’re not eligible for additional federal aid. If you decide to apply for a loan, keep in mind that rates can vary by lender. It’s a good idea to compare rates from multiple private student loan companies before submitting your application.
Compare Student Loan Rates In Minutes
Compare rates from participating lenders via Credible.com
Steps to Take Before Applying to Graduate School
Before thinking about how to pay for grad school or where to apply, complete these steps first:
1. Research Potential Earnings by Degree
While a master’s degree can be helpful in some fields, that’s not always the case every time. Before spending tons of money on a degree, research what typical salaries are in your industry for people holding postgraduate degrees. You can find out what professionals with your education level earn with PayScale.
2. Complete the FAFSA
The FAFSA isn’t just how you apply for federal loans. It’s also what the government and universities use to decide if you’re eligible for grants, federal work-study programs or institutional aid. Pay attention to federal, state and school FAFSA deadlines to ensure you get all the financial aid you can.
3. Explore Financing Options
Besides student loans or school-issued aid, you can use many other financial aid options to reduce your education expenses. Spend some time researching third-party grants, scholarships and fellowships to limit how much you need to rely on debt to pay for graduate school.
Frequently Asked Questions (FAQs)
Can graduate students use the FAFSA?
Graduate and professional students can complete the FAFSA just like while they were n undergraduate students. You’re still eligible for financial aid, including scholarships, grants and federal student loans. Completing the FAFSA might also make you eligible for other types of aid, like private scholarships and grants.
How much money does FAFSA give for graduate school?
In addition to receiving grants and other forms of free money (if you’re eligible), you can also borrow up to $138,500 in unsubsidized loans. Graduate PLUS loans will cover up to the cost of attendance that other forms of aid don’t cover.
How can I pay for grad school without loans?
The best way to pay for school without taking out loans is to exhaust all your free money options first. This includes scholarships, grants or other aid that doesn’t need to be repaid. You can also work while you’re in school to help pay for it, like fellowships, internships, assistantships and the federal work-study program. All of these options can reduce how much you’ll borrow in student loans.
