Paying for Graduate School

Paying for graduate school can be a challenge for many students. Different factors play a role in how much graduate school costs. A master's degree program can be finished in one to two years in most cases, and the average yearly tuition can cost $30,000 to $40,000,  according to Peterson's. Therefore, paying for graduate studies is a challenge that clearly merits a closer look for many students. In this article, we'll discuss some of the factors that impact your tuition costs, and how to handle them.

The type of program, whether you're in or out of state, and how much of your program you complete online, can all weigh heavily into the calculation of how much graduate school costs.

Additionally, individual programs can cost more or less than the averages. For example,  the average cost of an MBA  is about $80,000 for a two-year program; but to  attend a school like Harvard  and receive an MBA could cost more than $140,000.

Along with the costs of the tuition itself, there are living expenses to consider when you're going to graduate school. With all that in mind, let's take a look at how to pay for graduate school.

There are a variety of ways you can pay for graduate school. The best option is to begin looking at sources of funding that don't have to be paid back.

For example, personal savings are a good place to start. It's also a good idea to look for sources of "free money" that don't have to be paid back. These can include graduate school fellowships and assistantships, as well as scholarships.

Once you're sure you've explored and exhausted these options that won't lead to you being in debt, you can then consider loans. There are both federal and private loans available to help people pay for the costs of graduate school. We'll say right now, federal loans should be where you look first. This is because they tend to have better interest rates, borrower protections, and repayment options (such as  income-driven repayment plans) than private loans.

• Grants, Fellowships, and Scholarships
• Working for the University
• Federal Loans
• Private Loans
• Tuition Reimbursement

There are also sources of money that don't have to be paid back, and it's important for graduate students to explore these financial aid options before looking into graduate school student loans. You can consult with your financial aid office to help you with your grant, fellowship, and scholarship search.

One example of "free money" is a grant. Grants are similar to scholarship programs. The biggest difference between a grant and a scholarship is the fact that grants are often need-based—”at least when they're awarded by the federal government.

Graduate scholarships and grants may be awarded to students from certain backgrounds or who are associated with specific groups. While grants are more likely to be need-based, scholarships are more likely to be merit-based.

Graduate fellowships are another financial aid option to fund an advanced degree. Fellowships are usually merit-based and are often awarded to doctoral students. There are fellowships offered internally by schools, so the student has to study at that specific institution, but there are also external fellowships that offer more flexibility to the student.

Working for the university you're going to attend is an option to help paying for graduate school. Often this type of work comes in the form of teaching or working in a research assistantship program. When students participate in these programs, they may receive a waiver for their tuition, either fully or partially. They may also receive a stipend.

Many grad students who work for the university as a teaching assistant will teach a class of their own, and it can be something like a lab or lecture.

There are also administrative graduate assistantships available, where students can work in a wide array of positions on campus.

There are many federal loan programs available to students planning to go to graduate school. Federal loan programs from the U.S. Department of Education that graduate students might use include the following:

Stafford Loans are fixed-rate Direct Unsubsidized Loans. For graduate school, students can borrow $20,500 per year, and the aggregate limit is $138,500. This aggregate limit does also include any Stafford Loans one has used as an undergraduate.

The interest rate for Direct Unsubsidized Loans disbursed between July 1, 2018, to June 30, 2019, and used for graduate or professional school borrowers is 6.6% APR.

There is an origination fee of just over one percent when a student borrows under the Stafford Loan program. Repayment for the Stafford Loan begins six months after someone graduates or is enrolled less than half-time.

Eligibility requires that participants be enrolled at least half-time in a participating school. Only the Direct Unsubsidized version of this loan is available to graduate students, while the Direct Subsidized Loan can also be used to obtain a bachelor's degree. To receive the Direct Unsubsidized Loan, showing financial need is not necessary.

To apply for this loan or any federal financial aid, students should complete the Free Application for Federal Student Aid (FAFSA).

Graduate PLUS Loans  are available as a way of paying for graduate school for eligible borrowers. There is a fixed 7.6% interest rate, and the loan limits are flexible, but credit history is relevant to eligibility.

To be eligible, you do have to file the FAFSA and pass a credit check, but you don't have to show financial need.

With this loan, you may be eligible to borrow up to the full yearly cost of attendance, minus other aid you might receive such as scholarships and federal student loans. There isn't an aggregate loan limit with Graduate PLUS Loans.

There are multiple repayment plans, a cosigner isn't required, and you can defer payments while you're still in school.

Private loans are also an option for students who are going to graduate or professional school. However, they shouldn't be the first option.

First, if you're planning to attend graduate school, you should complete the FAFSA and see what's available to you in terms of not only federal loans but also grant and work-study options. You should also make sure you max out what's available in federal student loans before considering private graduate student loans, and you will either need good credit or a willing cosigner.

The following are a few private lenders that offer student loans for graduate school, to give an overview of what to expect regarding terms and rates.

Citizens One offers the Citizens One Student Loan, which can be used for graduate or professional school. Features of this loan include:

• Rates may be as low as 4.26% (variable), but only for certain borrowers and repayment terms
• For graduate students, there are benefits including increased loan limits depending on degree and extended deferment, which also depends on the specific degree program
• Loan limits range from $1,000 up to $295,000
• Loan term lengths can be five, 10, or 15 years

The company SunTrust  offers graduate student loans. In fact, SunTrust offers rate reductions for automatic loan payments and auto-pay.

• The Custom Choice Student Loan is available to undergraduate and graduate students. The variable APR ranges from 4.126% to 13.125% and the fixed APR ranges from 5.351% to 14.050% APR
• The Union Federal Private Student Loan is available to undergraduate and graduate students, and the variable APR range is the same as the range with the Custom Choice Student Loan
• SunTrust also offers the Graduate Business School Loan; the variable APR ranges from 4.126% to 9.115% and the fixed APR ranges from 5.351% to 9.882%
• Loan limits for the Custom Choice and Union Federal loans range from $1,001 to $65,000, and for the Graduate Business School Loan, limits go up to $95,000

Sallie Mae offers up to 100 percent coverage for students who are working toward their master's or doctoral degree.

• Variable interest rates for Sallie Mae graduate school loans are currently 4.37% to 9.40%
• Fixed interest rates range from 6.25% to 9.16%
• Sallie Mae graduate loans have deferred repayment options and a six-month grace period
• This loan has no origination fee

Tuition reimbursement is something that's a bit different than the methods of paying for graduate school listed above. In this situation, a graduate student may already be working for a company, and that company will pay for them to participate in a graduate program as a benefit for their employees.

The benefit for the company is that when you complete your graduate program, they're going to have a more skilled worker, and this strategy helps with retention as well. Some companies may pay for all of the cost of certain employees to receive a graduate degree, while other companies may pay for a portion of an employees' graduate studies.

Some of the large companies that offer these types of programs include:

• Procter & Gamble's tuition assistance benefit will reimburse employees up to 80 percent of their tuition and fees (capped at $40,000) for studies that support their current or potential next position
• Boeing often invests in their employees in the form of annual tuition assistance, and they don't require that the course of study be related to the employee's current job at the company

If you are considering graduate school, you probably already know the costs are significant. The cost of graduate and professional programs is often more than even an undergraduate degree. So, how do you decide whether or not it's a worthwhile investment?

In some instances, graduate school can greatly impact one's career prospects and earning potential over a lifetime. And pursuing this level of higher education might even be necessary if you plan to eventually earn a Ph.D. However, for some people, it may have little to no effect on their earnings or career advancement options, and they're still left with huge amounts of student loan debt.

A few considerations that can help if you're weighing whether or not grad school is a good investment include:

• What are the starting salaries for the program you're considering?
• Once people go into the field you're considering studying in, what do they actually end up earning?
• How easy will it be for you to find a job after you complete a graduate or professional program? Even if the earning potential is high with a certain program, if the demand isn't there, then grad school might not be worth it. What might the demand look like in the future?

Weigh the costs of graduate school and compare that to your earning potential and you'll be able to calculate a pretty specific ROI. Also, remember to first explore any and all options for paying for graduate school that don't have to be paid back before you move on to funding from private and federal loans.

Want to learn more about paying for graduate school? Looking to gain admission to your best-fit college? Schedule a brief call with Empowerly to learn how you can triple your admissions chances.