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What are your Options to Pay for Graduate School?

| Paying major expenses

An analysis conducted by the Bureau of Labor Statistics showed that higher educational attainment increases employment rates. In addition, the higher your education, the higher your salary in most cases. The report shows that those with a Master’s degree earn 18% more than those with a Bachelor’s, and the discrepancy increases for Doctoral (43%) and Professional (52%) degrees.

Deciding to return to graduate school can be a tough decision and process, especially if you have responsibilities such as a mortgage, car note, child care, etc. Luckily, there are options available.

What are my options to pay for a graduate degree?

Nearly every college or university has financial aid office advisors. This should be your first stop on your graduate school journey. Call directly and set up an appointment to discuss your options. Your school may offer merit-based and need-based aid. To provide the best analysis, it may be beneficial to complete a FAFSA application.

Scholarships, grants, loans and further options are also available through state-based aid. Each state has its specific set of requirements, but it is worth looking into aid for the state that you reside in, as well as the state you plan to attend school in, should they differ. For further information, read here.

Don’t rule out employer tuition reimbursement. Your current employer may pay for part or all of your graduate school. Talk with your company about such opportunities. Your employer may ask that you work for the company for a specified period of time upon graduation.

There are a host of loan options available should you still need additional financial support. Let’s take a look at a few common ones:

Federal Direct Stafford Loan (unsubsidized only)

  • 6% fixed interest rate for funds disbursed between 7/1/17-6/30/18
  • No requirement to display financial need
  • Borrow up to $20,500
  • Origination fee of 1.066% for funds disbursed between 10/1/17-9/30/18
  • Payments due 6 months after graduation
  • FAFSA application required

Federal Direct PLUS Loan

  • 7% fixed interest rate for funds disbursed between 7/1/17-6/30/18
  • Credit based loan. If you have adverse credit history, you can get an endorser on your behalf for the loan.
  • Borrow up to 100% of the school tuition less other financial aid
  • Origination fee of 4.264% for funds disbursed between 10/1/17-9/30/18
  • Payments due 6 months after graduation
  • FAFSA application required

Private loans

Private loan details vary by lender, but student loans from Discover offer the following:

  • Fixed rates from 6.24% – 12.99% APR, and variable rates from 3.87% – 11.12% APR, depending on credit.
  • Borrow up to 100% of the school tuition less other financial aid
  • $0 application fees, origination fees or late fees.
  • Payments due 9 months after graduation (option to pay $25 monthly while in school)
  • Rewards for good grades, which Federal loans don’t have

Home Equity Loans

If you are a homeowner, you have the option to take out home equity to finance your graduate education. Home equity loans vary by lender, but home equity loans from Discover offer the following:

  • Fixed rates from 4.99%-11.49% APR*
  • Borrow from $35,000 up to $150,000
  • $0 application, $0 origination, and $0 appraisal fees, and $0 cash is required at closing

*Your APR will be between 4.99% and 8.84% for a loan in first lien position and between 4.99% and 11.49% for a loan in second lien position. The APR is based on loan amount and a review of creditworthiness, including income and property information, at the time of application. The lowest APR is available to consumers with the best credit and other factors.

Is grad school worth it?

Truly, only you can provide the answer to this question. Weigh the pros and cons when deciding how you will pay for grad school. Here is a checklist of factors to weigh in:

  • Salary before entering grad program
  • Duration of grad program
  • Cost of tuition
  • Cost of living
  • Potential salary after graduation

You can also use a graduate school calculator to help give you an idea of whether it’s worth it.

Only you can decide if graduate school makes sense for you. If attending grad school leads to greater opportunities in a few years, then it just may be worth it. With a little creativity and organization, you can pay for grad school to help you reach your career goals.

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