Going to College Archives

Apr

2025

Why Is College So Expensive in the United States?

By Melissa Brock | Going to College, Student Loans, student_loan | Comments Off

In 2023-2024, the average cost of attendance for full-time undergraduate students living on campus at four-year institutions was as follows:

• Private nonprofit institutions: $60,420

• Public four-year, out-of-state institutions: $46,730

• Public four-year, in-state institutions: $28,840

Multiply that amount by at least four years, and you’re looking at a sizable investment in your future. But why is college so expensive, exactly?

Keep reading to learn five reasons why college is so expensive, what contributes to the rising cost of college, efforts to control costs, and more.

Factors Contributing to Rising College Costs

Several factors contribute to rising college costs, including faculty salaries and benefits, campus facility construction and maintenance, student services and amenities, administrative costs, and technology integration. We’ll dive into the details of each of these.

Increase in Faculty Salaries and Benefits

Faculty salaries increased an average of 4% between 2021-2022 and 2022-2023, which was a fairly substantial increase.

Faculty also receive benefits like employer contributions to retirement plans and health insurance, college tuition, Social Security contributions, disability income protection, unemployment insurance, group life insurance, workers’ compensation premiums, on-campus parking, and fringe benefits, like athletic event tickets. Non-salary benefits can amount to up to one-quarter of faculty member compensation.

Recommended: How to Pay for College

Construction and Maintenance of Campus Facilities

Studies have found that prospective students reach their decisions within the first ten minutes of walking on campus. Therefore, campuses must do more than just satisfy the basic needs of their students. They must convey emotion, create positive reactions, and offer “extras,” like aesthetics, all of which results in high construction costs to create a lasting positive environment for faculty, staff, and students, which can include:

• Code requirements, including stair towers, fire-rated corridors, fireproofing, fire alarm systems, sprinklers, and more.

• Legislative mandates related to the ADA, EPA, OSHA, and ASHRAE, which dictate accessibility, dust control, occupancy, ventilation, air filtration, and more.

• Institutional requirements, like minimal disruption to campus life, job site cleanliness, limiting noise, complex phasing-in schemes, and more.

• Short timelines that protect athletic event schedules, residence hall occupancy, and other conditions.

• State-of-the-art facilities, such as high-occupancy performance and athletic venues, technology-infused learning environments, and highly functional classrooms, labs, meeting rooms, offices, and other complex mechanical systems.

• Higher-quality finishes, including hardware, carpets, flooring, restroom fixtures, and more to maintain durability.

• Sustainability requirements, such as Leadership in Energy and Environmental Design (LEED) metrics based on campus sustainability commitments.

• Technological advances and other additions, such as hearing loops in public assembly spaces, gender-neutral restrooms, prayer rooms, locking systems, security cameras, motion sensors, and more.

Many smaller pieces go into creating a great environment for students now and into the future.

Student Services and Amenities

Student services programs create an additional expense. These programs support students in overcoming barriers, including underrepresented groups, first-generation or low-income students, those with limited English proficiency, and students with disabilities or learning differences. Services can include:

• On-campus events and workshops

• Guest speakers

• Tutoring services

• Academic resources, including those in the library

• Technology rentals

• Career services

• Academic advising

• Mental and physical health services

• Transportation

College costs may also go up due to various amenities on campuses, which can include extravagant campus gyms with lazy rivers, whirlpools, and saunas; fancy student unions and dining options; movie theaters, arcades, ski resorts, swanky condo-like residence halls, and more.

Recommended: Colleges That Offer Free Tuition

Administrative Costs and Staffing

Administrative costs and staffing are another reason why U.S. colleges are so expensive. Administrative costs refer to institutional support for those who operate the day-to-day functions of the institution, which could include the following:

• Executive management

• Legal department

• Fiscal operations

• Public relations

• Development office

The American Council of Trustees and Alumni survey found the following per-student administrative costs:

• Oklahoma: $1,970

• Hawaii: $2,230

• Tennessee: $2,450

• New Jersey: $4,982

• Alaska: $6,224

• Wyoming: $7,830

Colleges and universities must also cover auxiliary expenses (including parking facilities, housing, and food services).

Cost of Technology Integration

The pandemic increased the costs of student information systems after declining in previous decades. A large university with 20,000 or more full-time students might spend between $30 million and $100 million during the first five years of a new system.

Naturally, the cost of implementation depends on a few factors, including:

• School size

• Data processing

• Hiring requirements to manage the technology

• Data migration and implementation

• Customization preferences

• Third-party integrations

Role of State Funding Cuts

State funding cuts for higher education are a key factor in rising college costs. While state appropriations for colleges saw overall gains year over year, 28 states have in fact cut their support for higher education.

As states reduce financial support for public universities, institutions raise tuition to cover budget shortfalls. This shift places more of the financial burden on students, contributing significantly to the overall expense of college.

Additional Expenses for Students

Students also pay for additional expenses, such as the costs of living on campus, textbooks, course materials, and tuition increases. We’ll walk through each cost below.

Cost of Housing and Living

Housing and living costs vary depending on whether you choose to live on or off campus. Here are the differences between living off-campus versus on-campus:

• Off-campus: The median monthly cost of rent surpassed $2,000, and the average college-aged male spends an average $374.10 per month on food. Don’t forget to factor in transportation, utilities, internet, and furniture to get the full costs of living off campus.

• On-campus: The average cost of housing and food for full-time undergraduates at a public two-year in-district college was $9,970. On average, it also cost $12,770 for both public four-year in-state and out-of-state institutions and $14,650 for private, nonprofit four-year institutions.

Ultimately, you may pay far more for on-campus housing, but consider the tradeoff between living on campus vs living off campus. Living off campus can have its disadvantages, despite the cost savings.

Textbooks and Course Materials

Unfortunately, textbooks and course materials have gone up dramatically over the past two decades. Textbook costs have increased 162%. Students paid the most at public two-year colleges ($1,470) versus at public and private four-year colleges ($1,250).

Students might also avoid buying course materials due to these steep prices and might even choose different classes based on high textbook or supply costs.

Tuition and Fee Increases Year-Over-Year

Tuition and fees usually increase from year to year, and scholarships often don’t increase to match.

The average 2023-2024 tuition and fees for college students increased by the following percentages for full-time students:

• Public four-year colleges for in-state students: 2.5%, for an average of $11,260

• Public four-year colleges for out-of-state students: 3%, for an average of $29,150

• Public two-year colleges (in district): 2.6%, for an average of $3,990

• Private nonprofit four-year colleges: 4%, for an average of $41,540

There’s nothing students can do to change the tuition increases, so you must learn other ways to compensate, including applying for more scholarships or having parents pay more.

Recommended: Paying for College: A Parent’s Guide

Efforts to Control College Costs

The government has attempted efforts to control college costs. The House Committee on Education and the Workforce passed the College Cost Reduction Act to change college costs for the better by adjusting the student loan and Pell Grant programs. The bill would save students at least $150 billion over a decade.

In addition, colleges themselves have tried to slow down the cost increases. However, many colleges say they can no longer afford to cut costs due to inflation (food, services, labor, and more). Therefore, many colleges use third-party consultants to identify where they can cut costs, including looking deep into their institutional operations.

The Long-Term Impact of High Costs

Many colleges have begun to see the long-term impact of high costs, including overall decreased enrollment. The U.S. has seen a waning public belief in the importance of college.

In an Edge Research survey of 1,700 high school juniors and seniors and more than 3,100 non-enrolled adults aged 18 to 30, the majority of respondents still see the benefits of college. However, compared to results from last year, the rate of perceived importance has gone down by as much as six percentage points. Adults not currently enrolled in college were less likely to believe in the benefits of college than high schoolers.

The Takeaway

Asking why colleges are so expensive opens up a whole Pandora’s box of reasons — it’s impossible to pinpoint just one. College administrative offices must work hard to balance and manage costs.

Unfortunately, families bear the brunt of the costs, but learning how to pay for college can go a long way in helping you understand what to do. Options for paying for college include cash savings, scholarships, grants, and federal and private student loans. Federal loans should be pursued first, as they come with federal benefits, protections, and income-driven repayment plans.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

FAQ

What is the most expensive part of going to college?

Tuition, the price you pay for teaching or instruction from a college or university, is the most expensive part of going to college. According to the Education Data Initiative, the average cost of tuition at a public, four-year institution is $9,750. At a four-year out-of-state institution, students spend an average of $28,386 on tuition, and at a four-year nonprofit private institution, that number averages $38,421.

Why do private colleges cost more than public?

Private colleges cost more than public universities because they rely on donations, an endowment, and tuition to keep them running. However, most private colleges offer generous financial aid awards for students to bring costs down. Public institutions, on the other hand, rely on state government funding, which can help alleviate the cost burden for families.

How can students reduce the cost of college?

Students can reduce college costs by applying for merit-based and institutional scholarships and by looking for other types of aid, such as grants. Scholarships and grants are free money that you don’t have to repay, unlike loans, which you do need to repay after you graduate.

Students can also look into jobs that pay for your degree, which offer a huge benefit because some jobs will completely take care of your tuition bill.

Are online degrees a cheaper alternative?

Online degrees can be a cheaper option, but it’s important to figure out what kind of college experience you’re looking for. Getting an online degree is a vastly different experience from attending college in person. Therefore, sometimes it’s worth paying extra to get the experience you desire, rather than just “getting through college.”

About the author

Melissa Brock

Melissa Brock is a higher education and personal finance expert with more than a decade of experience writing online content. She spent 12 years in college admission prior to switching to full-time freelance writing and editing. Read full bio.

Photo credit: iStock/Ibrahim Akcengiz

SoFi Private Student Loans
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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Apr

2025

Do Student Loans Have Simple or Compound Interest?

By Melissa Brock | Going to College, Student Loans, student_loan | Comments Off

All federal student loans and most private student loans have simple interest. With simple interest, borrowers pay interest only on the principal of the loan.

Loans with compound interest charge interest on the principal and on unpaid interest. This makes them more expensive than simple interest loans.

It’s important to understand how the interest on your student loans is calculated so that you know what you’re paying over the course of your loan term.

Understanding Simple and Compound Interest

The interest you pay on a student loan is the cost of borrowing the money. Here’s how simple vs. compound interest works.

Simple Interest Explained

Simple interest means you pay interest only on the principal balance. You do not accrue interest on any unpaid interest.

Simple interest is calculated using this formula: Principal x Interest Rate x Loan Term.

Compound Interest Defined

With compound interest, you pay more interest over time. The lender charges interest on your loan balance plus the unpaid interest that accrues.

How much compound interest you’ll pay depends on the number of compounding periods your loan has. The more compounding periods, the more the compound interest amount will be.

For example, if your loan compounds daily, the daily interest rate is applied to the principal along with any unpaid interest up until that point.

Over the life of the loan, compound interest will cost a borrower more.

Recommended: Student Loan Debt Guide

How Student Loan Interest Works

The way student loan interest works depends on the type of loan you have.

Federal Student Loan Interest

Federal student loans, which are backed by the U.S. Department of Education, have fixed interest rates, which means the interest rate never changes. While the interest on these loans begins accruing immediately, how the interest is handled depends on the type of loan you have.

With Federal Direct Subsidized loans, which are awarded based on financial need, borrowers do not pay interest while they are in school, during a six-month grace period after graduation, or during any deferment period. The government covers the interest payments during these times.

Direct Unsubsidized loans, which are not awarded based on financial need, work differently. Borrowers are responsible for paying the interest on these loans at all times. If they don’t pay the interest while they are in school, during the six-month grace period after graduation, or in times of student loan deferment, the interest will accrue and be added to the principal of the loan.

All Federal Direct loans are “daily interest” loans, which means interest adds up each day.

Private Student Loan Interest

Private student loans are offered by private lenders such as banks, credit unions, and online lenders. These loans may have either a fixed or variable interest rate.

The interest rates for private student loans are determined by the lender and are based largely on the borrower’s credit score and income.

Many private loans have simple interest, however, some use compound interest. Before taking out a loan, find what type of interest it has. This is one way to help manage student loan debt.

Check out our private student loan guide to learn more about how the interest works on these student loans.

💡 Recommended: Refinancing Private Student Loan

Capitalization of Interest

When interest capitalizes, the unpaid interest is added to the principal amount of the student loan. This increases your loan’s principal balance, and interest is charged on the new, larger balance.

For instance, capitalization may happen during periods of deferment if you have Direct Unsubsidized loans. In that case, the interest may be added to the principal amount of the loan. This might increase your monthly payment and the overall cost of the loan.

Calculating Interest Costs on Student Loans

To calculate interest costs on student loans, first find out what kind of interest the loan has. In most cases, it will be simple interest. As discussed, all federal student loans and many private student loans have simple interest.

To determine how much the monthly simple interest would be, you first need to find out what the daily interest on the loan is. To calculate that, divide the interest rate by 365 and multiply that number by the principal amount.

For a $10,000 loan with a 6.00% interest rate, the calculation would look like this:

0.06/365 x 10,000 = $1.64

You’re paying $1.64 in daily interest. If your billing cycle is 30 days, multiply 1.64 x 30 = 49. That means you’re paying $49 a month in simple interest.

If the student loan has compound interest, the calculation is more complicated. As mentioned, the amount of compound interest you’ll pay depends on the number of compounding periods your loan has. For example, if your loan compounds daily, the interest rate is applied each day to the principal along with any unpaid interest up until that point.

So if your loan is $10,000 and your daily interest amount is $1.64, the next day, that interest is added to the principal and you’re charged interest on the new, higher amount of $10,001.64. The interest charges will continue to increase this way each day.

A student loan with compound interest can end up costing you more and result in your living with student loan debt over the long term.

💡 Recommended: Average Interest Rate for Student Loan

Strategies to Minimize Student Loan Interest

Fortunately, there are ways to minimize student loan interest. Here are some steps that can help.

Making Interest-Only Payments

If you have Federal Direct Unsubsidized student loans or private student loans, making interest-only payments while you’re in school could save you money. These payments will help keep the interest from accruing and being added to your principal.

Refinancing for Lower Rates

When you refinance student loans, you take out a new private loan to cover the cost of your current loans. Refinancing may allow you to get a lower interest rate or better loan terms and help you simplify your loan payments. Using a student loan refinancing calculator can help you determine if you could benefit from refinancing.

It’s possible to refinance private and federal student loans. However, it’s important to note that if you refinance federal loans with a private lender you will no longer have access to federal programs and protections like income-driven repayment plans.

Paying Off High-Interest Loans First

Paying off your loans with the highest interest first could help you save you money over the long term because you’re paying off your costliest debt. To do it, make payments on all your loans when they’re due, but put any extra money you have toward the highest-interest loan.

After you pay off that loan, tackle the next-highest interest loan, and so on until your debt is paid off. This is commonly called the debt avalanche method of paying off debt.

Tax Implications of Student Loan Interest

It’s possible to get a tax deduction for the interest you pay on student loans. This is known as the student loan interest deduction and it allows you to potentially deduct up to $2,500, or the amount of interest you paid on your federal or private student loans — whichever amount is less — from your taxable income.

There are income phaseouts to this deduction based on your modified adjusted gross income (MAGI). Your MAGI must be below a certain limit, which typically changes each year, in order to claim the deduction.

The Takeaway

The interest on most student loans is simple interest and not compound interest. All federal student loans have simple interest and many private loans do as well.

Before you take out a student loan, make sure you understand what kind of interest it has and how the interest accrues. Depending on the type of loan it is, you may want to make interest payments while you’re in school to help manage your debt.

Refinancing your student loans may also be worth considering if you can qualify for a lower interest rate or better terms. You can shop around with different lenders for the best rates and terms for your situation.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.

FAQ

Do federal student loans have simple or compound interest?

Federal student loans typically have simple interest, which is interest calculated only on the amount of money you borrowed (the loan principal). Many private student loans use simple interest as well, but some private student loans do use compound interest, in which interest is charged on your loan balance and on the unpaid interest that accrues.

Which type of interest is more expensive for borrowers?

Compound interest is more expensive than simple interest is for borrowers. That’s because compound interest is calculated on the accumulated interest as well as on your original principal. With compound interest, you end up paying more over time.

Can interest be deferred on student loans?

When you defer Direct subsidized federal student loans, the interest is deferred. However, interest continues to accrue on unsubsidized federal student loans during a deferment, and the unpaid interest will be capitalized and added to your loan principal when the deferment ends.

About the author

Melissa Brock

Photo credit: iStock/Rockaa

SoFi Student Loan Refinance
Terms and conditions apply. SoFi Refinance Student Loans are private loans. When you refinance federal loans with a SoFi loan, YOU FORFEIT YOUR ELIGIBILITY FOR ALL FEDERAL LOAN BENEFITS, including all flexible federal repayment and forgiveness options that are or may become available to federal student loan borrowers including, but not limited to: Public Service Loan Forgiveness (PSLF), Income-Based Repayment, Income-Contingent Repayment, extended repayment plans, PAYE or SAVE. Lowest rates reserved for the most creditworthy borrowers. Learn more at SoFi.com/eligibility. SoFi Refinance Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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Apr

2025

Guide to Student Loans for Cosmetology School

By Melissa Brock | Going to College, Life & Career, personal_loan | Comments Off

Cosmetology school teaches learners about the application of ingredients and chemicals of beauty products as well as how to care for clients’ hair, nails, skin, and more. Cosmetologists can study a single beauty area or specialize in a range of areas. In general, cosmetology school takes less than two years to complete, but it depends on whether you choose to attend school full- or part-time, your state requirements, and the program and school you choose to attend.

Paying for cosmetology school may involve obtaining a mix of grants, scholarships, work-study, and cosmetology loans. You may also choose to pay for school with money you’ve saved.

Read on for more information on how to pay for cosmetology school. We’ll focus on aid that must be repaid (student loans) and will also touch on other types of aid that do not need to be repaid — grants, scholarships, and work-study.

What to Consider When Choosing a School for Cosmetology

It’s a good idea to visit community colleges or cosmetology school campuses prior to choosing the right cosmetology school for you. In general, it’s a good idea to interview an admissions representative or other professional about graduation rates, loan default rate, job placement rate, and school costs. The answer to these questions can give you a good indication of the quality of the school and whether the school might be a good fit for you.

You may also want to consider whether or not you’d like to attend an accredited institution, since many good cosmetology schools choose not to become accredited. An accredited institution is one that meets specific academic and institutional requirements by an institution that offers accreditation. An accrediting body will typically take a look at facilities and staff as well as the curriculum of the school and admission requirements.

Graduation Rate

The graduation rate can tell you a lot about the satisfaction of current and past students at a particular cosmetology school.

The most recent data shows that, about 34% of full-time undergraduate students who began a certificate or associate’s degree at two-year institutions received their certificate or degree within 150% of the normal time required.

On the other hand, 14% of that same cohort had transferred to another institution within 150% of normal completion time. A total of 10% stayed enrolled in that same institution. The rest of the students in the cohort were no longer enrolled in the original institution nor were they recorded as a transfer at a different institution — a total of 42% of students.

Look for a school that offers a high retention rate, which measures the percentage of first-time students who return to the institution to continue their studies the following fall. One way to measure retention and graduation rates is to use College Navigator “>College Navigator, which offers this information about nearly 7,000 colleges and universities in the U.S.

Loan Default Rate

Consider asking about the student loan default rate for a particular institution. The loan default rate indicates whether students are successful in paying off their student loans. Specifically, the U.S. Department of Education publishes the cohort default rate (CDR) which shows how well prior students have done at repaying their student loans. You can check the Department’s cohort default rate database for specific institutions.

Why should you worry about loan default rate? It illustrates the relationship between the quality of the degree and the ability of graduates to obtain jobs that can help them pay off their loans. While a low default rate doesn’t automatically put a particular cosmetology school into the “good school” category, it’s a great metric to have at your disposal.

Job Placement Rate

Job placement rate might be one of the most important questions you can ask a particular college or university. The job placement rate is the percentage in which graduates of the program obtain job placement. Most schools survey students to obtain this data and will showcase it on their websites.

However, there’s no universal method that schools use to arrive at their numbers. That’s why it’s also a good idea to ask deeper questions when you tour cosmetology schools. Dig into whether students who graduate are employed by salons or other cosmetology-related businesses. Ask about how often they open up their own salons. Ask for admission professionals to give you examples of successful alumni and if possible, lists of where the most current graduating alumni currently work.

Also ask about exam rates, because states require students to take a licensing exam in order to be able to practice. How many students successfully pass and how many have passed in recent years?

School Costs

A cosmetology school program may cost between $5,000 to $20,000. Find out how much each school costs and learn the cost breakdown. You should be able to find this information on the school’s website, but it’s a good idea to make an appointment with the financial aid office at the institutions you’re considering to get an exact estimate of all costs as they pertain to your situation.

Furthermore, don’t forget to ask questions about how much tuition will increase over the time you’ll be at the cosmetology school and whether financial aid will match the increasing tuition.

Cosmetology Career Options

As mentioned before, cosmetology careers can encompass a wide range of career options. It’s important to study the types of programs a particular cosmetology school offers in order to make sure it matches up with your career goals. Many cosmetology programs offer full programs in hair styling, skin care, nail care, and makeup. However, many cosmetology programs also offer training in esthetics, nail technology, electrolysis, and teaching as well:

• Esthetics: Students in this area learn to apply makeup, wax, and perform facials. They also learn how to give clients massages and perform reflexology.

• Nail technology: Going a step beyond nail care, nail technology includes studying nail art, design, and how to implement tips, wraps, and gels.

• Electrolysis: Learners who study electrolysis learn the art of permanent facial and body hair removal methods.

• Teacher training: Students who want to prepare future cosmetologists may choose to enter into a teacher training program.

Cosmetology School Financing Options

The amount of financial aid you receive could be affected by whether a school chooses to become accredited or not. Schools often become accredited in order to offer Title IV government funding to cosmetology students through the U.S. Department of Education. If you attend a schools that is not accredited, you won’t be eligible for federal student aid like federal student loans.

The next sections will review information about scholarships and grants, payment plans, trade school loans, work-study programs, and federal and private student loans.

1. Scholarships and Grants

Scholarships and grants are two methods you can use to pay for college. Scholarships, which can be considered free money and don’t have to be repaid (unless there are caveats in the scholarship requirements — for example, you may be required to finish the program). They can come from a wide variety of agencies, institutions, and organizations. Know the scholarship requirements in depth before you apply. It’s also a good idea to look into a wide variety of scholarship opportunities. Opportunities can come from your cosmetology school or your community.

Grants can be awarded to students from the federal government, state government, or your cosmetology school. Most of the time, you won’t have to pay the money back. However, if you don’t finish your program or fail to fulfill some other requirement, you may have to repay all or a portion of your grant money. The U.S. Department of Education offers several federal grants, including Federal Pell Grant, Federal Supplemental Educational Opportunity Grant (FSEOG), and Iraq and Afghanistan Service Grants.

The American Association of Cosmetology Schools (AACS) partners with various sponsors in the beauty industry to offer scholarships and grants to help students pay for tuition at their chosen institutions.

2. Cosmetology School Payment Plans

Cosmetology schools may allow you to make incremental payments. This means that instead of paying the full tuition bill at the beginning of a new semester, you make small, likely interest-free payments as you complete each course. Students who want to pay for cosmetology school without loans may prefer this method of chopping up payments into smaller bits.

The financial aid offices at the schools on your list will have more information about how payment plans work.

3. Trade School Loans

Learners who attend trade schools can get both private and federal student loans. Federal student loans come from the federal government, while private student loans come from a bank, credit union, or other financial institution. Both types of loans must be repaid with interest, which will vary depending on the type of loan you receive.

Some private lenders offer specific loans for those attending trade schools. It’s important to look into the details before you apply for a trade school loan, such as interest rates, repayment plans, and more.

4. Work-Study Programs

The Federal Work-Study Program provides part-time jobs for students to help pay for expenses related to education. Work-study often gives students enough of a stipend to pay for small expenses such as books. As long as you are enrolled at least part-time, you may apply for a job as long as your school participates in the Federal Work-Study Program. Check with your school’s financial aid office to find out if your school participates.

Because work-study is part of a federally funded program, you must file the Free Application for Federal Student Aid (FAFSA®) in order to qualify.

5. Federal Student Loans for Cosmetology School

The federal student loan program can offer loans for cosmetology school that come from the U.S. Department of Education through the William D. Ford Federal Direct Loan (Direct Loan) Program. You may be able to tap into Direct Loans, including the Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans:

• Direct Subsidized loans: Cosmetology school students who have financial need may be awarded the Direct Subsidized Loan to help pay for career school. The federal government will pay the interest while you’re in school.

• Direct Unsubsidized loans: After filing the FAFSA, cosmetology students may want to take advantage of Direct Unsubsidized loans. This federal student loan is not based on financial need and the government does not take care of the interest while you’re in school.

• Direct PLUS loans: Parents of undergraduate students can help pay for cosmetology students’ education with a Direct PLUS loan. Parents will have to undergo a credit check. An adverse credit history may require an additional credit check.

The interest rates of federal student loans are typically lower than that of private student loans and they offer income-driven repayment plans and other perks such as public service loan forgiveness. Keep in mind that, as mentioned, one of the federal student loan requirements is attending an accredited institution.

6. Private Student Loans for Cosmetology School

You can also obtain private student loans for cosmetology school. Private student loans for cosmetology school are different from federal student loans because they come from different organizations. However, they also diverge further from there. Private student loans may require you to make payments while you are still in school. They may have variable or fixed interest rates. Federal interest rates, on the other hand, are always fixed.

Private cosmetology school loans are not subsidized, which means that your lender doesn’t pay the interest on your loans while you’re in school. You’re usually completely responsible for paying the interest on your loans.

In addition, you must also have to have a positive credit history or a cosigner to get a private loan. You cannot consolidate your loans (turn them into one loan) like you can with a federal Direct Consolidation Loan or take advantage of loan forgiveness programs with a private student loan. Because private student loans lack the benefits offered with federal student loans, they are often considered a last-resort option.

Are student loans worth it? It’s important to remember that private student loans can fill in the gaps between scholarships, grants, your own cash, and cosmetology loans for school. Check on the student loan requirements among private student loans as well as when to apply for student loans.

Explore Private Student Loan Options With SoFi

If you decide to take advantage of your federal student loan options but still need more loans to cover your tuition bill, private student loans with SoFi may help. SoFi private student loans may be an option for certain eligible certificate programs.

SoFi offers competitive rates for qualifying borrowers as well as flexible repayment options. You also won’t pay any extra fees to get a private loan with SoFi.

Explore your cosmetology student loan options with SoFi.

FAQ

Are there student loans for cosmetology school?

Yes, you can take advantage of both federal student loans and private student loans for cosmetology school. You may also want to consider tapping into trade school loans as well. It’s worth meeting with the financial aid office at your cosmetology school in order to make the right decision about the type of loans for your particular situation.

How do you get money for cosmetology school?

In order to get money for cosmetology school, you’ll want to file the Free Application for Federal Student Aid (FAFSA). The FAFSA determines your eligibility for federal and institutional financial aid, including institutional scholarships, federal student loans, and grants. If you want to apply for outside scholarships, you may have to seek out and apply for independent scholarships.

How do I go to cosmetology school for free?

You may be able to get free training while still in high school. Many high schools have agreements with technical or vocational schools or community colleges that allow you to attend at no cost. Some community colleges also offer free tuition to certain students as long as they meet certain requirements.

About the author

Melissa Brock

Photo credit: iStock/Natalia Rusanova

Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., Puerto Rico, U.S. Virgin Islands, or American Samoa, and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 4/22/2025 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SOPS0622010

Apr

2025

Guide to Student Loans for Certificate Programs

By Melissa Brock | Going to College, Student Loans, student_loan | Comments Off

When you’re thinking about earning more money in the quickest way possible, you might consider targeting a certificate program. Certificate programs have a major added benefit in that once you have your credentials in hand, they can help you boost your financial situation, sometimes significantly.

Graduates of all levels can take advantage of certificate programs, whether you’re a high school graduate or whether you have completed graduate school. (You may have come across information about paying for graduate certificates in your graduate school program.)

Keep reading to learn the definition of certificate programs, whether you’re eligible for student loans with a certificate program, funding options for certificate programs, the pros and cons of taking out a student loan for certificate programs, and more.

Key Points

• Certificate programs provide specialized career training without requiring general education courses, often leading to increased salary potential.

• The average cost of a certificate program is around $5,000, significantly lower than traditional degree programs.

• Eligible certificate programs may qualify for federal student aid, including grants and loans, but not all programs are covered.

• Funding options for certificate programs include private student loans, federal grants, federal student loans, personal loans, and employer tuition assistance.

• Pros of taking out loans for certificate programs include career advancement and lower costs compared to a traditional degree, while cons include accumulating debt with interest and the complexity of choosing the right financing option.

What Are Certificate Programs?

Certificate programs can help you specialize in a specific trade or update your professional skills. These programs teach practical skills and training related to a specific career field — you don’t take general courses toward a degree.

Why might you want to tap into a certificate program? In addition to increasing your salary potential, you may want to get updated career training or learn about technological advancements or updates in your field.

Students who have a high school diploma or general educational development (GED) can use undergraduate certificate programs to go straight into the workforce with an entry-level position within a specific field.

Students who have already earned bachelor’s or graduate degrees may be interested in enrolling in certificate programs related to their field and level. Certificates could also give those who have already earned a bachelor’s degree an option to advance their career while avoiding graduate school altogether. (However, it’s important to distinguish the difference between a certification and a certificate. A certification usually means a stepping-stone credential that you must have for certain career paths. This article primarily discusses certificate programs, but some careers may require a certificate, even after getting a bachelor’s or graduate degree.)

Cost of Certificate Programs

The earning potential relative to the low cost of a certificate program can pay off. For example, consider that in the 2023-2024 academic year, students at private nonprofit four-year institutions paid $41,540 on average for tuition and fees.

Students can spend far less on a certificate program — around $5,000 per program (or more or less, depending on the type of program you choose to complete). The variations in cost depend on the college, program, and credit requirements. For example, an online program at a community college will most likely cost less than through an in-person state or private college certificate program.

Let’s take a look at a few types of certificate programs and potential earnings:

• Surgical technologists: Earn a median income of $60,370 per year as of 2023 and will see 5% job growth through 2032, according to the Bureau of Labor Statistics (BLS).

• Construction and building inspectors: Earn a median income of $67,700 per year as of 2023, according to the BLS, though it is anticipated the industry will see a 2% decline through 2032.

• Plumbers, pipefitters, and steamfitters: Earn a median income of $61,550 per year as of 2023, according to the BLS. This job is expected to experience a 2% increase in growth through 2032.

• Court reporters: Earn a $63,940 median income per year as of 2023, according to the BLS. The industry will see a 3% increase in job growth through 2032.

• Sheet metal workers: Earn a $58,780 median income per year as of 2023, according to the BLS. The industry is expected to see no increase in job growth through the year 2032.

Are Certificate Programs Eligible for Student Loans?

Yes, you can get a student loan to help you pay for a qualifying certificate program. As long as you attend an eligible school, you may qualify for a federal or private student loan to pay for a certificate program.

However, certain certificate programs may not qualify for federal student aid, depending on the nature of the certificate program. For example, if you need to take a class to boost your credentials as a criminalist in the DNA section of your state’s crime lab, you may not be able to borrow student loans to cover that class. In some cases, your employer may cover the fees for your course.

We’ll dive into the exact funding options for certificate programs below.

Funding Options for Certificate Programs

Before embarking on a certificate program, you need to figure out how you’re going to pay for it. Talk to the financial aid office at the college, university, or career school you plan to attend. Options for paying for certificate programs include:

Private Student Loans

Can you get student loans for certificate programs, or more specifically, private student loans for certificate programs? Answer: Yes!

A private student loan refers to money you borrow for educational expenses and pay back over time, with interest. You can get a private student loan to cover the cost of a certificate program. Private student loans can come from a bank, credit union, or another financial institution.

Interest rates are usually slightly higher for private student loans compared to federal student loans. Federal loans also come with borrower protections and forgiveness options. In general, it’s best to exhaust your federal student loan options prior to tapping into private student loans, if you’re eligible. The amount you can borrow depends on the cost of your degree and personal financial factors like your credit score and income.

Check out the private student loan guide for more information about student loans.

Federal Grants

You may qualify for federal grants to cover the costs of a certificate program. Federal grants are typically free money, assuming you meet the obligations.

In order to qualify for a federal grant, you must file the Free Application for Federal Student Aid (FAFSA®). The FAFSA will also verify whether your certificate program qualifies for federal student aid under the U.S. Department of Education.

You may qualify for a Pell Grant , the largest program under the Department of Education. Pell Grants are awarded to students with financial need and no prior degree. You may also be able to tap into Federal Supplemental Educational Opportunity Grants (FSEOG).

Federal Student Loans

Just like federal grants, you must file the FAFSA in order to qualify for federal student loans. The difference between federal grants and federal student loans is that you must repay the money you borrow for loans. You must also meet some basic eligibility criteria to qualify for federal student loans.

Undergraduate certificate students who show evidence of financial need may qualify for a Direct Subsidized Loan. Undergraduate, graduate, and professional students can qualify for a Direct Unsubsidized Loan, but eligibility is non-need-based. It’s important to discuss both of these options as well as Direct PLUS Loans for graduate or professional students with financial aid offices to determine whether you can get any one of these loans to cover the costs of your certificate program.

You must go through entrance counseling to make sure you understand your loan repayment obligations to get a federal graduate student loan or undergraduate loan, as well as sign a Master Promissory Note. The Master Promissory Note states that you agree to the terms of the loan.

Recommended: Types of Federal Student Loans

Personal Loans

It may also be possible to borrow money from a bank, credit union, or online lender in the form of a personal loan. You’ll pay back a personal loan in fixed monthly payments or installments, usually over the course of two to seven years.

Just like a student loan, a personal loan is an unsecured debt. This means that it isn’t backed by collateral. If you stop making payments, none of your assets will be seized by the lender.

Interest rates may be higher for personal loans compared to private student loans and federal student loans, however. Do your homework before selecting one option over the other.

Employer Funds

If you’re currently employed and a certification relates to your current job description, your employer may pay for a portion or all of the cost of your certificate program. Companies like Starbucks, Google, and Target all have tuition assistance programs. Many companies will offer tuition assistance for college courses and some may even cover professional certifications.

Explore your options with your human resources office or ask your supervisor for more information.

Pros and Cons of Taking Out Loans for Certificate Programs

What are the pros and cons of taking out loans for certificate programs? Let’s walk through a few.

Pros of Taking Out Loans for Certificate Programs

• Offers career change opportunities: You may want to branch out or change your career completely, and getting a loan for a certificate program may allow you to do so.

• Costs less than a traditional degree: A certification usually costs less than pursuing a four-year or even a two-year degree. You may quickly pay off a loan, particularly because it may take you only a few months to attain a certificate.

Cons of Taking Out Loans for Certificate Programs

• You owe money with interest: The obvious downside to taking out a loan is that you’ll owe money at the end of your program — with interest. Because a certificate program can generally be completed in a relatively short time frame, though, you may be able to repay your loan (and minimize the interest rate impact) in a short period of time.

• Choosing the right option can be complicated: You may feel as if you’re in a maze with so many different options at your disposal. It’s a good idea to reach out to a financial aid professional at the school you’ve chosen to go over all your financing options. They can also guide you through the scholarships and grant opportunities that you can obtain.

Explore Private Student Loans With SoFi

It’s almost impossible to ignore the allure of a quick certification that can result in a lifetime of job satisfaction. Options for paying for certification include cash savings, grants, scholarships, federal student loans, and private student loans.

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

FAQ

Can federal student loans be used for certificate programs?

Yes, in certain cases, you can get federal student loans to cover the cost of certificate programs. However, your school and program must qualify under the Department of Education rules. Talk to the financial aid office at your college or career center for more information about your eligibility for federal student loans.

Can grants and scholarships be used for certificate programs?

Yes, you can obtain grants and scholarships to cover the cost of certificate programs. Talk to the financial aid office at your college or career center for more information. Your school may offer specific scholarships, but don’t forget to check into professional organizations or local chapters for the certificate program of which you plan to enroll.

Do some companies pay for employee certifications?

Yes, many employers pay for employee certifications to help boost employee retention and put employees at the top of their field. These may differ from certificate programs, however, so make sure you understand how your career-based certification may differ from a certificate. Ask your human resources office for information about continuing education or certification training.

About the author

Melissa Brock

Photo credit: iStock/PeopleImages

SOISL-Q324-048

Apr

2025

FAFSA for Grad School and How It Differs from Undergrad

Guide to FAFSA for Graduate Students

By Melissa Brock | Going to College, Student Loans, student_loan | Comments Off

Graduate school can help you pursue your academic and professional interests, expand your connections, improve your marketability, and increase your earnings. But it often comes with a high price tag.

If you’re thinking about investing in your future by attending graduate school, you may be wondering, does FAFSA cover graduate school?

In short, yes. Just like undergrads, graduate students can fill out the Free Application for Federal Student Aid (FAFSA) every year in order to qualify for federal grants, work-study, and federal student loans.

Read on to learn more about getting financial aid — and other types of funding — to help pay for graduate school.

Key Points

• Graduate students can apply for federal financial aid using the FAFSA, which may include grants, work-study, and loans.

• Unlike undergraduates, graduate students are considered independent on the FAFSA, so parental financial information isn’t required.

• For the 2026-27 academic year, the FAFSA form will be rolled out in stages. The form will be available to select students on October 1, 2025, with the remainder getting access on or before December 1, 2025.

• Graduate students are eligible for Direct Unsubsidized Loans and Grad PLUS Loans, with fixed interest rates set annually.

• Financial aid for graduate school may also include institutional grants, fellowships, and assistantships offered by the school.

Do You Have to Fill Out FAFSA for Graduate School?

While filling out the FAFSA is not required to attend graduate school, students who are interested in receiving federal student aid as graduate students will need to fill out and submit the form.

You may be familiar with the FAFSA from your years as an undergraduate student. The process of getting financial aid for graduate school is basically the same, with eligibility largely determined by financial need.

However, there is one notable difference: Graduate students are considered independent students for FAFSA purposes, so you aren’t required to provide any information about your parents’ finances. Another difference: For the 2025–26 FAFSA form, if you’re married, you’ll need to provide your spouse’s information.

💡 Quick Tip: You can fund your education with a low-rate, no-fee private student loan that covers all school-certified costs.

Grad School Financial Aid Eligibility

To be eligible for financial aid in graduate school you must meet basic FAFSA requirements. These include being a U.S. citizen (or qualifying noncitizen) enrolled or accepted in an eligible degree or certificate program. If you have any criminal convictions, have previously defaulted on a student loan, or owe a Pell Grant overpayment, that could affect your eligibility for federal aid.

FAFSA doesn’t have a maximum income cutoff, so it’s worth applying even if you have a steady income. There is also no age cutoff for financial aid, so you can complete and submit the form whether you graduated college recently or many years ago.

Some financial aid is awarded on a first-come, first-served basis, so it’s generally a good idea to fill out the FAFSA as soon as possible after its release. Due to an overhaul of the form, the FAFSA for the 2025-26 academic year will be released in stages: The first group of students will get access on October 1, 2024, with the remaining applicants receiving access on or before December 1, 2024. Be sure to submit your FAFSA form by the earliest financial aid deadline of the schools to which you are applying, which is typically early February.

Here’s a look at what type of financial aid you may be eligible for as a graduate student.

Grants

Your financial aid package for graduate school may include federal and state grants based on your field of study, interest, or type of school.

For example, if you’re studying education, you might be eligible for the Teacher Education Assistance for College and Higher Education, or TEACH Grant. The TEACH grant provides up to $4,000 a year to education students who will teach in a low-income school or high-needs field after graduation.

Graduate students can also qualify for federal Fulbright Grants and Iraq and Afghanistan Service Grants. However, grad students are generally not eligible for the Pell Grant or Federal Supplemental Educational Opportunity Grant (FSEOG) Grant, which are largely reserved for undergraduates.

You can learn about state-based grant opportunities by contacting the department of education for your state, as well as the state where the graduate school is located.

Many graduate schools also offer grants based on financial need or academic excellence. These grants generally don’t need to be repaid, although there may be specific stipulations, such as maintaining a certain GPA.

Work-Study

You may be familiar with work-study programs from your time as an undergraduate student. Graduate students are also eligible for the Federal Work-Study Program, which provides part-time jobs to students who demonstrate financial need.

Work-study is available to both full- and part-time students, though your graduate school must participate in the Federal Work-Study Program. Your school’s financial aid office can give you more details about the work-study program and the types of jobs available to you. Your program may also offer assistantships or teaching roles to help you pay for school (more on that below).

Federal Student Loans

The federal student loans you can access in graduate school are slightly different from those you can take out in undergraduate school. For example, you cannot take advantage of Direct Subsidized Loans, which are loans in which the government pays the interest while you are in college and during the six month grace period after you graduate. Direct Subsidized Loans are only available to undergraduate students with demonstrated need.

Here’s a look at the two types of federal loans available to grad students.

Direct Unsubsidized Loans

Federal Direct Unsubsidized Loans are loans made to eligible undergraduate, graduate, and professional students, but eligibility is not based on financial need. And, unlike a Direct Subsidized Loan (which is need-based), the government does not pay the interest while you’re in school or for six months after graduation. Interest will accrue while you are attending grad school and get added to your loan balance.

The interest rate is higher on Direct Unsubsidized student loans for graduate students than it is for undergraduate students.

If you are a graduate or professional student, you can borrow up to $20,500 each year in Direct Unsubsidized Loans. The interest rate is fixed at 8.08% for loans first disbursed between July 1, 2024, and July 1, 2025.

Grad PLUS Loans

If you need to borrow more than the annual limit for Direct Unsubsidized Loans to pay for grad school, you can also access a Federal Grad PLUS loan, which is also called a Direct PLUS Loan.

These federal loans are exclusively for graduate/professional students and parents of dependent undergraduate/professional students. Eligibility is not based on financial need, but a credit check is required. Borrowers who have an adverse credit history must meet additional requirements to qualify.

Grad Plus Loans are the most costly type of federal loan. For loans disbursed between July 1, 2024, and July 1, 2025, the interest rate is a fixed 9.08%. You’ll also pay a one-time disbursement fee of 4.228%.

Grad Plus Loans come with higher borrowing limits than other types of federal loans. You can borrow up to the cost of attendance of your graduate school program minus other financial assistance you get.

To apply for a Grad PLUS Loan, you need to fill out the Direct PLUS Loan Application.

Tips on Filling Out FAFSA as a Grad Student

Filling out the FAFSA as a graduate student is similar to filling out the form as an undergrad. However, your dependency status will differ because you’re no longer considered a dependent student. As a result, you typically do not need to input your parents’ information onto the FAFSA. You’ll only need to supply information about your (and if, you’re married, your spouse’s) income and assets, the graduate schools you want to receive your FAFSA information, and then sign and submit your form.

When Will You Hear Back?

It typically takes the education department three to five days to process the FAFSA if you submitted electronically; seven to 10 days if you mailed in a paper form.

If you provided a valid email address, you’ll receive an email notification that includes a link to your electronic Student Aid Report (SAR) at fafsa.gov. You’ll get a paper SAR through postal mail if you didn’t provide a valid email address. You’ll want to review your SAR carefully to make sure it’s complete and accurate and correct/update information if necessary.

The graduate schools you apply to will then review your FAFSA information and other documents and send you a financial aid award letter that details the scholarships, grants, and federal student loans you are eligible to receive. You may receive your financial aid award not long after you receive your acceptance letter to the graduate school. However, every school is different, so it’s a good idea to ask the admission or financial aid office of your school for more information.

Average Disbursed Amount

The average graduate student loan debt balance (from graduate school alone) is $78,118, according to the Education Data Initiative.

The maximum amount you can borrow under the Federal Direct Unsubsidized Loan program for graduate school is $20,500 a year, with a maximum lifetime limit of $138,500 (including undergraduate loans).

In comparison, a Grad PLUS Loan allows you to borrow up to the cost of attendance, minus any other financial aid received.

FAFSA for Grad School vs Undergrad

Graduate school financial aid is similar to undergraduate financial aid, but there are a few key differences. Here’s a look at how the two compare.

	Graduate Student Financial Aid	Undergraduate Student Financial
FAFSA Status	Independent	Dependent (typically)
Use financial information for	Student (and, if applicable, spouse)	Student and parents
Federal loans eligible for	Unsubsidized Direct Loans and Grad Plus Loans	Unsubsidized and Subsidized Direct Loans
Interest rate for Federal Direct Unsubsidized loans	8.08%	6.53%
Eligible for work-study?	Yes	Yes
Pell and FSEOG grant eligible?	No	Yes

Alternatives to Federal Aid

Federal aid isn’t the only way to pay for graduate school. Here’s a look at some other sources of funding.

Private Student Loans

Private student loans are offered by banks, credit unions, and online lenders. Unike federal student loans for graduate students (which come with fixed interest rates), private student loans may have fixed or variable rates.

Interest rates are set by the lender, so it can pay to shop around to find the best deal on a private student loan for grad school. Generally borrowers with excellent credit qualify for the lowest rates.

Similar to Grad Plus loans, you can usually borrow up to the full cost of attendance from a private lender. However, Grad Plus Loans come with a disbursement fee, while private lenders generally don’t charge this fee. If you have excellent credit (or can recruit a cosigner who does), you could potentially pay less with a private graduate student loan than a Grad Plus Loan. Keep in mind, though, that private student loans don’t offer the same protections (like access to forgiveness programs and income-based repayment plans) that come with federal student loans.

💡 Quick Tip: Master’s degree or graduate certificate? Private or federal student loans can smooth the path to either goal.

Grants and Scholarships

You’ll be eligible for federal, state, and institutional grants by filling out the FAFSA. However, there are also funding opportunities available outside this system. Many private organizations have created grants and scholarships to help graduates pursue an education in the fields they support.

Look for scholarships and grants from professional associations in your field. Your graduate school department or career department can often help you find scholarships based on your qualifications. There are also several scholarship websites to help you find money for graduate school, including Fastweb and Scholarships.com.

Fellowships and Assistantships

Graduate fellowships and assistantships can both help you pay for graduate school but they work in different ways.

A fellowship is like a scholarship that you can use for any costs you incur as a student. These programs are often available from professional organizations relating to your major. With a fellowship, you may perform research activities on campus or outside of your school.

An assistantship, on the other hand, is typically school-based and more likely to directly provide full or partial tuition waivers. Some assistantships also come with living stipends. An assistantship typically involves doing work on campus, usually related to your major. You might get a research job, which often entails assisting a tenured professor on an upcoming study, or you could secure a teaching job, which gives you the chance to serve as an assistant or professor at the school.

Employer Tuition Assistance

If you work for an employer that offers tuition assistance, your company may cover some or all of the costs of your graduate or professional education as long as you meet the program’s eligibility requirements.

You may even be able to access tuition assistance through a part-time job. Your human resources office will have details about tuition assistance, qualifications, and reimbursement procedures.

The Takeaway

Just like undergrads, grad students can qualify for financial aid to pay for school. Your grad school aid package might include grants, work-study, and federal loans.

As a grad student, you can take out more in federal loans than you could as an undergrad, which may make it easier to attend a more expensive school. It’s generally a good idea to tap lower-cost Direct Unsubsidized Loans before considering PLUS Loans.

Other sources of funding for grad school include: private grants, scholarships, fellowships, assistantships, and private student loans.

Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.

FAQ

How much can FAFSA disburse for graduate school?

As a graduate student, you can borrow up to $20,500 in unsubsidized federal loans each year. Grad PLUS Loans are also an option, and allow students to borrow up to the cost of attendance for graduate school.

Graduate students may also qualify for grants (which don’t need to be repaid) and work-study by filling out the FAFSA.

Is it harder to qualify for financial aid as a graduate student?

Not necessarily. While there are fewer need-based aid options for graduate students, your university or graduate program might provide merit- or research-based assistance. In addition, many private and nonprofit organizations offer scholarships and grants for graduate students.

Do you need to make a new FAFSA account for graduate school?

No, you do not need to make a new FAFSA account for graduate school. If you created an FSA ID as an undergraduate, you can use the same ID to apply for financial aid for graduate school.

About the author

Melissa Brock

Photo credit: iStock/sturti

Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., Puerto Rico, U.S. Virgin Islands, or American Samoa, and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. This information is current as of 4/22/2025 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

SOIS1023010