How to pay for grad school

Congratulations — you got into grad school! You’re taking a big step toward launching a career that you really care about. Now that the excitement’s over, reality sets in and you may be wondering, how am I going to pay for grad school when I already am paying undergraduate student loan debt? Let’s dive in and explore a few options.

Grants and scholarships are similar in that they both take a little work and advance planning. Essentially, they can offer you other ways to help pay for college. The difference? Grants are usually based on financial need, where scholarships can be need or merit-based (such as a winning essay or good grades).

Consider a fellowship if you really want to immerse yourself in your field of study around the clock. A fellowship can be teaching or researched-based. They usually come with tuition remission or a stipend to help with room and board, but often that money only covers residency off campus. Ways to find out more about these programs are exploring the department website, checking in with the head of your degree program or speaking with a career counselor at your school.

You’ll remember from your time as an undergrad that work study is popular and it’s also an available option for most grad students. Be sure to indicate in the check box on the FAFSA that you are interested in finding out if you are eligible for federal work study. If you qualify, it will be part of your financial aid package. After filling it out to determine if you are eligible, students usually take it upon themselves to begin searching for a work study job that fits their educational interests. Not all schools have a federally funded work-study program, so it’s worth checking with the financial aid office.

You may be wondering, where will I be working? Don’t worry, you probably won’t have to go far. Most work study gigs are right near your other classes, either in research labs or in on-campus buildings. Most majors help their students obtain work study jobs with part-time hours that don’t conflict with classes. As for amount earned, you’re guaranteed minimum wage, which varies by State and may be expected to rise.

Companies often offer tuition reimbursement programs for employees working either part or full time. It is more common that you would receive tuition reimbursement as a full-time employee. Keep in mind sometimes the graduate degree you seek needs to be in a similar field to your job, such as a business degree while working in finance. However, other companies might not insist on this rule. A good way to find out more information is to speak with your human resources department. Some companies want you to wait until you’ve been an employee for a specific amount of time such as two years before qualifying for tuition assistance.

This is the best grad school financing out there for one simple reason — you don’t have to repay it! There are no interest rates, monthly payments, or any of that. This funding can come in a few different forms, including gifts from relatives, or contests and grants in your hometown such as from a Rotary Club. One caveat to this: Using personal savings to pay for grad school isn’t free in the same way a scholarship, or gift aid, is. That’s your money that, if used on grad school, won’t be available anymore. It just means there’s no cost of borrowing, which, when it comes to the price of grad school, is a welcome relief.

Grad school involves paying for more than tuition. There are living expenses like food, rent, utilities, and other everyday expenses that are facts of life. The more you can use these savings or gift aid, the less you’ll have to take out in loans that you’ll repay for years to come.

Now that you’ve accounted for the free funding mentioned above, see what your remaining balance is. That’s the amount you’re bound to take out in federal or private loans.

Let’s start with your federal loan options when paying for grad school: the Direct Unsubsidized Loan and Direct PLUS Loan. Here are some key takeaways about each:

All federal student loans — including the unsubsidized and PLUS loans — have benefits like income-based repayment. That could be appealing if you don’t expect to make a high enough salary upon graduation when you have to start making full monthly payments.

Additionally, all federal loans — which are disbursed by the U.S. Department of Education — carry a fee, which is a percentage of the balance, and is taken out of the loan amount. To see if you qualify for federal aid, make sure to fill out the FAFSA (Free Application for Federal Student Aid).

For some, private student loans are a better option for grad students. That’s mainly because unlike loans from the federal government that can have higher rates, private loan rates can be lower, based on creditworthiness; a good credit score could mean a lower interest rate than your federal loan alternatives. Plus, you can choose between a fixed interest rate and a variable one.

Private Loans are distributed by banks, credit unions, and other financial institutions, instead of the Federal government. Depending on the lender, you could have access to multiple repayment terms. Upon graduation, you usually have a six-month deferment period before you have to start paying back your loan, but some private lenders ask for small, fixed payments while you’re enrolled. Many will offer different payment options, like deferred repayment, interest-only, or repayment of principal and interest. However, income-based repayment is not offered on private student loans. Research multiple lenders to see which offers the interest rate and repayment term that will best fund your grad school program.

Now that you know all of your options as a grad student, paying for tuition may be more within reach than you thought. Before seeking out lending options, see what cost-free funding options are available. Research scholarships and apply for everything (within reason, of course). See if your employer offers tuition reimbursement. Then, when all those funds are tapped, dive into whether federal or private loans are your best bet.

Need help funding your graduate school adventure? We can help guide you as you navigate through the financial process. Learn more about the Citizens Graduate Student Loan with Multi-Year Approval^† – apply once and it’s good until graduation.