Top Ways to Fund Graduate School
With the push for everyone to take the college route from high school, there are more people with college degrees, leading some employers to expand work requirements. According to CareerBuilder, 38% of employers have increased the educational requirements for job postings. As a result, employees often find it advantageous to obtain an advanced degree.
In some cases, additional schooling can provide needed training for a different career or increase the opportunity for advancement in your field. Money is also a key motivator, as those with a graduate degree earn 30% more than employees holding a bachelor’s degree. Graduate school can also improve transferable skills such as analytical, interpersonal, organizational, and communication skills.
Although there are many benefits to continuing your education, the decision does come at a cost. Degree-seeking adults must often balance a career, families, and other obligations, making a mid-career return to school a bigger challenge. In addition to these factors, you must set aside enough time to complete a program and pay for the advanced degree. With the average cost of graduate school, ranging from $30,000 to $120,000, it is often necessary to find creative ways to fund your education.
Here are the top ways to fund graduate school, without relying solely on student loans:
File the FAFSA
- As with undergraduate school, the FAFSA (Free Application for Federal Student Aid) form, opens the door for government financial assistance. The federal government offers specific benefits earmarked for advanced degree programs.
- Unlike most undergraduate students, graduate degree applicants typically involve independent students, which does not take your parent’s income and assets into account. Qualifying for aid only includes your household income and assets.
School Financial Aid
- Universities offer graduate students with similar financial aid options as undergraduates but often focus more on loans than free aid. However, several options do not require repayment.
- Grants are not automatic and can have a high level of competition in popular fields such as law or medicine. You can find grants through websites such as Grants.gov or Petersons.com. Grants tend to target specific degrees or minority status.
- Scholarships can be either merit or income based. Each University offers a range of scholarships, as well as private companies, non-profits, and other organizations. The availability of scholarships will vary by school and the amount of effort you put into applying. The academic department of the graduate school often awards scholarships, in addition to those found through the financial aid department. Early applicants have an advantage because of the limited funds available.
- Fellowships are the most lucrative form of assistance and can completely pay for tuition, in some cases, they can also provide a monthly stipend. Private and public organizations can provide graduate school fellowships. Online databases and the University can help you locate these potential fellowships. The application process is typically very competitive and requires full-time attendance to qualify.
- In addition to fellowships, most universities provide a number of employment opportunities for graduate students, which can include teaching or research assistant positions to help you pay for the cost of attendance. You can receive tuition waivers or stipends to cover living costs, in exchange for employment. Typically, individual departments award assistantships.
- The graduate school admissions office can also help you find work by connecting you with a program or some professors in need of a teaching or research assistant. These programs are more available for doctorate programs than those seeking a master’s degree.
- Large employers will often provide an educational benefit, which will reimburse employees who take qualified courses. Companies want to increase the skills of existing employees and can accomplish this through tuition reimbursement programs. The benefit is the ability to work in your current job while attending school. The downside is that you usually must repay the reimbursement if you do not remain with your employer for a set time.
- The Society for Human Resource Management found that 60% of employers offer some form of tuition reimbursement. Your employer may require coursework to have a connection to your role with the company and will come with annual limits.
- Online Universities tend to have a lower cost than on-campus options and offer greater flexibility for students juggling work, family, and other obligations. In some cases, you can lower the cost of an advanced degree by fifty percent. Most online schools accept government aid and allow either part-time or full-time attendance.
Lifetime Learning Tax Credit
- While some of the tax credits offered, extend only to undergraduate students, the Lifetime Learning Tax Credit applies to all future educational pursuits. Qualifying individuals can reduce their tax bill by up to $2,000 each year. The credit applies to 20% of qualified college expenses, including tuition, textbooks, room and board, and classroom supplies, up to $10,000. It is available to individuals earning an AGI of $62,000 or less, or under $124,000 for married couples filing a joint return.
Loan Options for Graduate Students
- Most graduate students cannot completely fund the cost of a graduate degree through free sources of financial aid. Fortunately, there are several low-cost loan options that can help bridge financial gaps.
- The Perkins Loan is a low-interest loan offering up to $8,000 annually at a 5% interest rate. It applies to both undergraduate and graduate education.
- Stafford Loans offer up to $20,500 a year with a 1% fee and a rate set by Congress each year. The current rate is 6.8% for graduate students. Stafford Loans for graduate students are unsubsidized, meaning interest accrues during your time in school. –
- Advantages to federally sponsored loans include no repayment while in school, a 6-month grace period after school completion, and other federal loan benefits.
- Graduate PLUS Loans are another type of federal financial assistance available to students. They currently offer a 7.9% interest rate and a 4 % fee. You typically resort to Graduate PLUS loans after maxing out the Stafford Loan.
- Private loans from banks or other lenders can also be a source of funding. Interest rates range from 5.75% to 8.875% and can have lower fees than federal options. They do not come with the same benefits as Federal options, and typically require immediate repayment while enrolled in school.
Advanced degrees in a field of public interest, such as teaching, might offer additional benefits such as loan forgiveness or adjusted rates.
Obtaining an advanced degree can set you apart from other qualified candidates in the job market. Finding creative ways to keep loans to a minimum can save you thousands of dollars in interest over the life of a student loan.
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