Signing on for grad school is a big decision, but one more and more students are making each year. In 2017 alone, it is expected that universities throughout the United States will award more than 790,000 masters degrees .
The price of grad school, however, remains high. Students who graduate with a master’s degree carry an average debt of $57,000. Once you’ve decided on a master’s degree, you have to spend months meticulously assembling your applications and crossing your fingers for good news. But perhaps the biggest challenge in planning for grad school is figuring out how exactly you’re supposed to pay for it.
Luckily, there are numerous ways to finance your advanced degree, and investing in a graduate education has proven to be worth it; The right degree has the potential for a massive return on investment.
The complicated part is determining what options are available to you and figuring out how to hack your way through grad school with the smallest bill. If you’re considering going to grad school, we’ve laid out the most important financing options. Take a deep breath, remember that it is worth it, and read on to learn how to formulate a plan to pay for your graduate education.
Step 1: Fill Out Your FAFSA
If you received financial aid or federal student loans during undergrad, you’re probably familiar with the Free Application for Federal Student Aid, usually called by its friendlier name: the FAFSA. The FAFSA is an application to determine what types of federal financial assistance you might qualify for.
Many students who are applying for grad school are considered “independent,” for FAFSA purposes. This means that even if your mom is supplementing your monthly groceries with weekly homemade lasagnas and you’re still using your parents’ password to binge watch Game of Thrones, you won’t need to include their financial information on your FAFSA application.
Step 2: Assess Your Federal Options
Your FAFSA will determine whether you’re eligible for federal student loans, federal work-study, federal income-based repayment plans, and federal grants. In addition, your college may use your FAFSA application to determine if you’re eligible for aid from the school itself. Here’s a closer look at the three federal options.
1. Federal Student Loans
Federal student loans are the most common way students pay for grad school . Federal student loans allow you to borrow money from the federal government in order to finance your education.
Payments on these loans can be deferred until after graduation and sometimes qualify you for certain tax deductions. There are different types of federal loans, and each type has varying eligibility requirements and maximum borrowing amounts. Some federal loans are eligible for loan forgiveness after a certain number of payments.
2. Federal Grants
Unlike student loans, federal grants do not need to be repaid. Before you get too excited, it’s worth noting that federal grants are not as widely available for graduate school as they are for undergraduate programs. Despite this, it is still possible to receive some grant funding to help you pay for graduate school.
3. Federal Work-Study
Just like undergrad, you might be eligible for work-study jobs during grad school. Eligibility for work-study jobs is also based on your FAFSA. These jobs often pay you to work at your university for a set number of hours.
They can oftentimes be doubly beneficial because in addition to earning money, you can sometimes secure a work-study position that is relevant to your field of study. Remember, you usually have to go through an application process in order to secure a work-study job.
Step 3: Figure out What Your University Can Offer You
After narrowing down your federal options, make sure to consider what university-specific funding might be available. Many schools offer their own grants, scholarships, and fellowships. Your school’s financial aid office likely has a specific program or contact person for graduate students who are applying for institutional assistance.
Many schools will use the FAFSA to determine what, if anything, the school can offer you, but some schools use their own applications. Although another deadline is the last thing you need, seeking out and applying for school-specific aid can be one of the most successful ways to pay for grad school: Awards can range from a small grant to full tuition remission.
Step 4: Think Outside the Box
There are a variety of lesser-known ways to pay for grad school out there. They sometimes take extra research and effort to find, but any additional funds are worth it. Here are some of the ways to pay for grad school that you just might find hiding under a rock.
1. Employer Tuition Reimbursement
It might sound too good to be true, but some employers are happy to reimburse employees for a portion of their grad school costs. Employers that have tuition reimbursement plans set their own requirements and application process.
Make sure to consider any constraints your employer puts on their tuition reimbursement program, including things like staying at the company for a certain number of years after graduation or only funding certain types of degree programs.
If your employer doesn’t already have a program in place, don’t despair. It is almost always worth asking your company if they offer any benefits to employees pursuing a higher degree. Some employers might offer professional development funding that can be used to help you pay for school or let you keep a more flexible work schedule to accommodate your classes.
2. Private Scholarships
Do you remember all those random essay contests and company scholarship applications your classmates fired off senior year of high school? Well, grad school is no different. There are plenty of private scholarships out there, you just need to find them. Scholarship for the unusually tall? Check. Essay contest on automatic sprinkler systems? You betcha. In addition to the weird and wonderful one-off scholarships, there are tons of industry-specific scholarships that are intended to help students pursuing your specific field of study.
The easiest way to search for scholarships is through one of the many websites that gather and tag scholarships by criteria. Some of the most popular resources are FastWeb
and Peterson’s ; Both offer robust search engines that can match you with multiple scholarship opportunities. Keeping all your grad school and FAFSA application materials handy means that you’ll have easy access to the information you’ll need for scholarship applications.
3. Private Loans
If you’re not eligible for federal loans or grants, you can apply for a private loan to help cover the cost of grad school. Private graduate school loans vary depending on what loan provider you use, and some private loans have variable interest rates, which means they can fluctuate over time. In order to secure a private student loan, you usually need a strong credit score or a cosigner.
Make sure to consider several different types of private student loans before you make your decision. Private student loans are one area where it pays to be a savvy shopper; You’ll want to consider origination fees, payment schedules, and interest rates.
4. Loan Forgiveness Programs
Loan forgiveness programs either assist with monthly loan payments or discharge the remaining loan amount after a certain amount of qualifying payments. One such program is the Public Service Loan Forgiveness (or PSLF) program. The PSLF program allows graduates who work in public interest fields to discharge their loans after 120 monthly, income-based payments.
Additionally, some employers offer loan repayment assistance to help with high monthly payments. While loan forgiveness programs don’t help you with the upfront cost of paying for grad school, they may offer a meaningful solution to loan payback.
We get it: Going back to school, and possibly taking on more debt, is nerve-wracking. You’re making a big investment in your education, but the good news is there are numerous grants and scholarships that want to invest in you.
Taking the time to find the best combination of loans and funding is crucial. It might sound scary, but taking it one step at a time will allow you to assess all the options available and make the best financial decision for you.
SoFi is a leader is the student loan space—offering both private student loans to help pay your way through school, or refinancing options to help you pay off your loans faster.
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Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.
SoFi private student loans are subject to program terms and restrictions and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility for more information. View payment examples. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change. Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs.