Thinking about attending graduate school? Getting an advanced degree can be a great career move, but it's not a cheap one. In addition to the cost of tuition, going to graduate school may also involve the opportunity cost of a year or more of missed paychecks (if you go full-time). That doesn't mean it's not worth getting an advanced degree, but it does mean you need to pay even closer attention to the price of the school and your plan for covering those expenses. Here are some ways to pay for graduate school and keep your out-of-pocket costs as low as possible.
Before You Apply To Graduate School:
If you're sure you're going back to school, it can be a smart move to start putting money aside now in a 529 account. The money will grow tax-free, and you'll be able to withdraw it tax free for qualified educational expenses. Keep in mind, however, that if you change your mind and decide not to go to school, you may incur a tax penalty to access those funds for purposes other than education. (You can, however, redirect the money into an account for a relative to use for education, penalty-free.) We recommend you consult a financial planner or tax advisor when comparing savings accounts.
See If Your Employer Will Pay For It
Many employers will offer tuition reimbursement for all or some of employees' continuing education as part of their benefit package. Talk to your HR department to find out whether your company will contribute to the costs, and whether there are any strings attached. Many employers, for example, will require that you remain with the company for a year or two after receiving reimbursement, or require you to return the funds if you leave earlier than the designated time.
Research the Net Price Of School
The sticker price for graduate schools can be intimidating, but many students pay far less than the published figure, thanks to scholarships and financial aid. Talk to the school's admissions department to get a more realistic sense of what graduate school will cost you.
Figure Out How Much You Can Afford To Borrow
The amount that you should borrow for graduate school will depend on your expected income after graduation as well as what type of other debt or expenses you'll have when you leave school. Once you get a financial aid offer from your school, you'll have a better sense of the size (if any) of the shortfall you'll need to cover with loans.
After You Apply To Graduate School:
Look For Free Money
Since they don't need to be paid back, grants and scholarships are the best way to pay for graduate school. In addition to seeing if you qualify for merit scholarships or other grants from your school, see whether there are any scholarships available from industry trade groups or organizations in your local community.
Consider a Teaching/Research Position Or a Fellowship
Many schools offer a stipend and reduced or free tuition to graduate students who help teach undergrad classes or work on research projects for the school. Some schools and external organizations also offer fellowships to graduate students that will cover the cost of their education in a particular field.
Fill Out the FAFSA®
Even if you don't think you'll qualify for federal aid, or if you plan on using private student loans, filling out the Federal Application for Student Aid may be necessary for some scholarships or grants. Plus, you may be surprised to learn that you qualify for federal loans.
Understand Your Loan Options
Once you have figured out how much you need to borrow, shop around to determine the best lender for you. Be sure to consider and understand both your federal and private loan options. In addition to comparing the interest rates on loans, you'll want to know whether that interest rate could change in the future, and whether there's any flexibility in repayment. Speaking with a financial advisor can help you weigh the alternatives and set up a plan to pay off your debt as soon as possible after graduation.
FAFSA is a registered service mark of the U.S. Department of Education.