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Going to graduate school can help you secure a better paying job in the future, but attending isn’t cheap. You might wonder how to pay for grad school — and if you’ll need to take on hefty student loan debt to cover the cost. Grad students leave school with $84,300 in average student loan debt. But luckily, there are ways to lower your education costs.
Here’s how to pay for grad school without ending up with six figures of student loan debt:
- Apply for gift aid
- Research fellowship options
- Take advantage of assistantship opportunities
- Ask your employer for help
- Participate in a work-study program
- Apply for federal student loans
- Compare private student loans
- Claim applicable tax credits
1. Apply for gift aid
When paying for grad school, it’s a good idea to start with gift aid (money you don’t have to pay back later). This includes scholarships and grants.
- Grants are usually awarded based on your financial need rather than your academic merit. Schools, professional associations, and private organizations often offer grants directly to grad students.
- Scholarships tend to be given based on merit. If you have a high GPA and good test scores, you might qualify for scholarships. Your school might offer you a scholarship, too, but you can also find and apply for awards on your own. Resources like Scholarships.com and GoGrad can help you find scholarships to apply for.
2. Research fellowship options
Some graduate students are offered a fellowship, another type of financial support. With a fellowship, you’re expected to teach or perform research in return for a stipend. You might also get partial or full coverage of tuition. Fellowships are usually awarded based on academic merit.
3. Take advantage of assistantship opportunities
If you’re willing to step in as a teaching assistant or to help professors with their research, you might qualify for either a teaching- or research-based assistantship. You’ll get a stipend to cover the cost of tuition in return for your work.
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4. Ask your employer for help
If you’re currently employed, ask your employer’s human resources department if there’s a tuition reimbursement program for graduate degrees. Many companies will pay for some or all of your program.
Some employers require you to make a service commitment to the company to qualify for their program. If you leave before the commitment term ends, you might have to repay all of the tuition they paid for — so make sure you know their rules before signing an agreement.
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5. Participate in a work-study program
A commonly overlooked way to pay for grad school is using the federal work-study program, which is available to both professional and graduate degree students. If you qualify for work-study, you’ll get a part-time job to help pay for your education and living expenses.
The job will likely relate to your field of study. You’ll typically work for your school, a local non-profit organization, or a public agency. Plus, you’ll earn at least minimum wage (though some fields pay a lot more). This can be a great way to pay for school while gaining experience and bolstering your resume.
Learn More: 8 Part-Time Job Ideas for Students
6. Apply for federal student loans
If you have to borrow money, federal student loans are a good place to start. There are two federal options for graduate student loans:
- Direct Unsubsidized Loans: Graduate students can borrow up to $20,500 per year in unsubsidized loans. Loans disbursed after July 1, 2019, but before July 1, 2020, have an interest rate of 6.08%.
- Grad PLUS Loans: With a Grad PLUS Loan, you can borrow up to the total cost of attendance. But keep in mind that this isn’t always a good idea since Grad PLUS Loans have high interest rates and disbursement fees. Loans disbursed after July 1, 2019, but before July 1, 2020, have an interest rate of 7.08% and a 4.236% disbursement fee.
If you’re considering Grad PLUS Loans, you might also want to look at taking out private student loans. If you have good credit, you could possibly qualify for a lower interest rate. Here’s how Grad PLUS Loans compare to private student loans:
| Grad PLUS Loan | Private student loan | |
|---|---|---|
| Who is the borrower? | Student | Student or parent |
| Do you need a cosigner? | Depends on the student's credit history (if adverse, yes) | Depends on who is taking out the loan and their credit history (but typically the student would need a cosigner) |
| Who is the lender? | Federal government | Various private institutions |
| What’s the interest rate type? | Fixed and set by Congress | Fixed or variable and depends on your credit |
| Do you need to fill out the FAFSA? | Yes | No |
| How much can you borrow? | Depends on the cost of attendance minus other financial aid and the student’s year in school | Some have caps, others limit by cost of attendance minus other financial aid |
| How long does it take to repay the loan? | Typically 10 to 25 years (depends on loan) | Typically 5 to 25 years (depends on loan) |
| Is interest tax-deductible? | Yes | Yes |
7. Compare private student loans
In some cases, you might need to take out private student loans. Here are a couple of situations where this could apply:
- You’ve exhausted your federal aid options.
- You qualify for a lower interest rate through a private lender.
Federal student loans have fixed interest rates regardless of the applicant’s credit history, but private loans work differently. Loan terms and rates vary from lender to lender. If you have good credit and a steady income, you might qualify for a lower rate, helping you save money over the life of the loan.
If you decide to take out a private student loan to pay for graduate school, make sure you consider multiple lenders to make sure you find the right loan for you. There are also private student loans specifically designed for certain degrees (like law school or medical school) that might be a good fit, too.
Whatever you choose, Credible makes it easy to compare multiple lenders — and you can see your rates in just three minutes, all without affecting your credit score.
| Lender | Fixed rates from (APR) | Variable rates from (APR) |
|---|---|---|
 | 3.82%+ | 2.71%+ |
 | 4.29%+1 | 1.29%+1 |
 | 4.39%+2,3 | 1.49%+2,3 |
 | 4.84% - 12.39%6 | 1.84% - 11.99%6 |
 | 4.09%+8 | 2.06%+8 |
 | 3.83%+ | 2.52%+ |
 | 3.95%+ | N/A |
 | 4.74% - 11.85%9 | 1.25% - 9.44%9 |
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Lowest APRs reflect autopay, loyalty, and interest-only repayment discounts where available | 1Citizens Bank Disclosures | 2,3College Ave Disclosures | 6Discover Disclosures | 8EDvestinU Disclosures | 9Sallie Mae Disclosures |
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Citizens Bank Student Loan Rate Disclosure Variable rate, based on the one-month London Interbank Offered Rate ("LIBOR") published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of June 1, 2020, the one-month LIBOR rate is 0.17%. Variable interest rates range from 1.29%-11.43% (1.29%-11.00% APR) and will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a co-signer. Fixed interest rates range from 4.29%-11.95% (4.29% - 11.49% APR) based on applicable terms, level of degree earned and presence of a co-signer. Lowest rates shown requires application with a co- signer, are for eligible applicants, require a 5-year repayment term, borrower making scheduled payments while in school and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of the loan. |
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8. Claim applicable tax credits
As a graduate student, you can take advantage of valuable tax credits on your tax return — like the lifetime learning credit (LLC). With the LLC, you can claim up to $2,000 that you spent on eligible education expenses. And there’s no limit on how many years you can claim the credit.
The amount of the LLC is gradually reduced if your modified adjusted gross income (MAGI) is between $58,000 and $68,000 ($116,000 and $136,000 if you’re married and file a joint return). If your MAGI is higher than $68,000 (or $136,000 if married and filing a joint return), you can’t claim the LLC.
Paying for graduate school
A graduate degree can be a great investment in your future. But when it comes to paying for grad school, it’s important to be careful about how much debt you take on. Think about your degree’s return on investment and how much more you can expect to earn after you graduate before you take on student loan debt, and make sure you have a plan in place to repay your debt.
If you’re thinking of ways to pay for grad school, consider picking up a side-hustle or part-time job. You can use your earnings to off-set your education costs, reducing how much you need to borrow in student loans.
Learn More: 6 Tools to Gauge the Return on Your Degree
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