Figuring out how to save money for graduate school can be overwhelming, especially if you are still paying off loans for your undergrad degree. But finding the money to pay for school doesn’t always mean you have to pick up a side hustle or take on more debt. It is possible to save for graduate school if you plan ahead and adjust your current budget. Here are some ways to help save up.
Splitting Up Your Paycheck
If you are currently working and get regular paychecks, one of the simplest ways to start saving more is to automate the process as much as possible. If your workplace has direct deposit, you could contact HR and see if you are able to add another bank account, and designate a certain amount from every paycheck to go into your savings account.
It can be as much or as little as you’d like, but putting the money directly into savings makes it harder to spend right away. By transferring the money by default into your savings account, you don’t have to force yourself to part with it every time you get paid. The process of dividing your paycheck will help make sure you don’t have to worry about initiating any sort of transfer in order to start saving more.
If your company doesn’t offer the option to split up your deposit, you can contact your bank directly or check online to see if they offer a recurring transfer. Banks are typically able to set up transfers for you automatically on your payday.
Again, this solves the problem of you having to think about how much to save after the money is already in your account. You just have to decide what amount you are comfortable putting away into savings, so just make sure you come up with a monthly budget or savings goal before you start.
Opening a Separate Savings Account
While you shouldn’t necessarily open a new account for every savings goal in your life, as that could get messy fast, setting up a new, separate savings account with your bank for grad school is another way to potentially maximize your money before heading off to school.
If you feel like you’ve got your finances mostly organized, opening a new account with the goal to save for grad school can help you keep better track of your money—and make your progress tangible. Having a separate account specifically for school can also help you manage and keep track of spending on books and other school-related costs.
These first two ideas can work together to get you progressing on your savings goal. It can be intimidating to commit to allocating some of your budget for savings, but if you make the process regular and automatic, you may be surprised to find how little you miss that extra cash.
Don’t Forget Financial Aid
The Free Application for Federal Student Aid is not just for student loans—you could also receive work-study and grants by filling out the FAFSA®. Just like undergraduate applications for federal financial aid, you must demonstrate need, must be a U.S. citizen or eligible noncitizen, and be enrolled or accepted as a regular student pursuing a degree beyond a bachelor’s (here’s the eligibility criteria right from the Department of Education ).
However, when graduate students fill out the FAFSA, you may be considered independent, meaning your parents’ income is no longer taken into consideration. (Again, full eligibility criteria is provided by the Department of Education .)
For some people, this might actually mean you are eligible for more financial aid as an independent individual. How much you’re awarded—if anything—will be based on your income and financial assets. You cannot be in default on a prior student loan to be eligible for additional aid.
Regardless of your dependency status, you be eligible for PLUS Loans for graduate students . These unsubsidized loans can be taken out in amounts up to the cost of attendance, but be aware you can’t have an adverse credit history to qualify.
There’s also the option of other financial aid you don’t typically have to pay back, in the form of scholarships or other grants, or scholarships from your state based on field of study, interest, or school type. File your
FAFSA as soon as possible after October 1, the year before each enrollment period. Since there are limited funds, the sooner you file, the better chance you may have of getting the most aid possible.
Checking with Your Current Employer
Even if you are not in a career where your employer is expected to pay for a graduate degree, a lot of companies will offer some contribution to ongoing education if you can show it will be relevant to your job.
Tuition reimbursement varies depending on your company and industry, but some may offer tuition assistance to their employees. While it might not cover your entire graduate school cost, a tuition reimbursement benefit from your company could significantly lower the amount you need for school, which in turn could lower your dependence on loans.
If you already have some student loan debt from your undergraduate education, you can check to see if your company offers employees a match (up to a certain amount yearly) on payments made toward student loan debt every year. In this way, employers can make a regular contribution to help with your student loan balance, while you make your regular payments, too.
Considering Schools Abroad
Schools in Europe, South America, and Africa may be significantly less expensive than universities in the United States. The Wall Street Journal reported that in 2015, more than 47,000 U.S. students were pursuing advanced degrees overseas. And with the reduced cost, no wonder. In fact, in certain countries such as Germany, tuition for American students at many German universities is free.
But, before enrolling in graduate school abroad, make sure you understand how your industry will accept and transfer over any foreign degrees. You’ll want to make sure that your grad school degree is a decent ROI.
While the cost of living might be higher in some other countries, international graduate programs can also save you time; many programs are only one or two years in length, as opposed to three or four.
Refinancing Current Student Loans
If you are currently paying off undergraduate student loans, the idea juggling paying for grad school and paying off undergrad loans may seem daunting. It’s obviously helpful to get your current debt situation under control before saving for graduate school. If you want to save more money monthly, you could look into refinancing your current loans.
Refinancing your student loans could potentially give you lower interest rates, which would mean lower monthly payments (depending on your loan term), potentially freeing up room in your monthly budget.
If you want to start saving for graduate school, refinancing your current loans and putting any difference in what you paid before toward savings is a great way to start. It doesn’t take anything away from your current budget, since it’s money you were putting toward your loans already.
Private lenders like SoFi may be able to help you refinance your student loans. How does refinancing work? A private lender will look at your current loans, and combine them into one new loan, with an interest rate based on your current financial situation and credit score.
It’s important to know that loan refinancing means you’re no longer eligible for federal student loan forgiveness, deferment, and income-driven repayment.
A lower overall interest rate can help you with your goal of saving money to pay for graduate school, helping to make your savings goals more manageable as you embark on this exciting next step in your career.
Going to graduate school and want to learn about how loan refinancing could help you? At SoFi, pre-qualifying for student loan refinancing is easy and convenient—you’ll get your rates in a matter of minutes.
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