Financing Graduate School and the Different Options Your Should Consider
Considering graduate school means carefully considering how you will be paying for it. There are options for financing graduate school through loans or other mechanisms that can reduce or eliminate your education costs. Understanding these funding options are critical in making the best decisions when it comes to paying for graduate school.
The feeling you get when you walk to receive your undergraduate degree is a once in a lifetime experience. Whether you are a 1st generation graduate or extending the family tradition at an alma mater, every college graduate should feel successful.
One of the biggest decisions in a college graduate's life is deciding what to do next. Choices are very binary, either look for a job or stay in school. The choice to go to graduate school is driven by your chosen profession or a desire to advance your career options. Either way, the decision to apply for grad school is not an easy one. More years of adding to your student loan debt is not attractive to most. However, the burden is often acceptable since more education typically equates to better job opportunities. For example, those with a graduate degree obtain 15% higher weekly median earnings and have lower unemployment rates than those holding only a bachelor’s degree according to the U.S. Bureau of Labor Statistics.
That said, financing graduate school can be overwhelming with the mountain of debt you are already sitting on. With the average graduate's debt at $37,172 or $351 per month according to Student Loan Hero, many are left with thinking about how to pay for graduate school without going broke. There are loans for graduate school and also graduate school grants and scholarships as mechanisms for footing the bill. Understanding all these funding options can make the financial challenges of graduate school less burdensome.
Options for Paying for Graduate School Without Loans
Remember that FAFSA form (Free Application for Federal Student Aid)? The same form is important to you as you think about paying for graduate school. Universities use this form to assess your financial need based on the information you provide. Typically, university aid such as graduate school grants and scholarships do not have to be repaid. Financial aid can be categorized into three areas.
Federal Loans for Graduate School
Federal aid is the number one source of education financing. Financing graduate school is no different. Accepting a federal loan, however, means you will have to pay back the amount you borrow at defined terms. Specifically, three loan programs are available for paying for graduate school.
Private Loans for Financing Graduate School
Private loans are another option for paying for grad school. This option should explored after all other financial aid sources are explored. Private education loans for graduate school are often costlier, have higher fees and interest rates, than Federal loans. Exploring different lenders and choosing a loan term that fits your financial need and repayment options is key to using private loans for financing graduate school.
How to Get Graduate School Paid for Other Ways
The Teacher Education Assistance of College and Higher Education (TEACH) Grant is a program that awards up to $4,000 to students pursuing graduate degree programs in education. This program requires education related coursework and a plan for a future profession in an educational related field to remain eligible for the grant and keep it from turning into a loan.
Pell Grants are available to those in postbaccalaureate teacher certificate programs. This grant is available to students with a demonstrated financial need and like other types of grants does not have to be repaid. Awarding of Pell Grants is based on financial need, but the amounts available can be up to $5,815 if you qualify.
Additionally, there are many companies that pay for grad school. Employers will fit the bill for graduate school to increase the skills of there workforce and provide an extra benefit to their employees. This is a great option if you can't afford graduate school. Be careful and research the program requirements with your company's human resources office. Many of these programs include requirements for time of service or you may be on the hook to repay the cost of graduate school.
Tax Incentives for Going to Graduate School
Tax programs offer credits on your annual taxes for being a grad school student. The Lifetime Learning Credit, Student Loan Interest Deduction and the Tuition and Fees Deduction provide tax breaks at year end based on your qualified status as a student in grad school. Although these are not ways to leave grad school without debt, they do help reduce some of the costs. Visit the IRS or consult a financial adviser for more information on how to claim and deduct qualifying higher education expenses on your annual taxes.
Making the Right Decisions When it Comes to Financing Graduate School
Graduate education offers the potential for expanded career opportunities and earning potential, but the costs need to be considered before deciding to continue your education. Researching the career options after graduation (salary and job market) can help you decide if taking on additional education debt is a good decision. Once the decision is made to continue your education by going to grad school, consider these three keys to financing graduate school start to finish without going broke.
There is not one solutions when it comes to financing graduate school. Your best chance at leaving graduate school without debt, or with as little as possible, is exploring and understanding the various options available. Doing so will make those additional years in college less stressful and that much more rewarding.