If you really want to supercharge your career, gain a higher salary, and make an impact in your chosen field, you may want to consider pursuing a master’s degree.
A master’s degree is an advanced postgraduate qualification that demonstrates your mastery of a specific field of study or professional practice. And the only place you’re going to earn a master’s degree is at grad school.
Unfortunately, there’s no such thing as a free lunch. Grad school has the power to drastically enhance your career opportunities. But as you might imagine, grad school tuition tends not to be cheap, either.
This guide will explain why grad school is a smart investment and exactly how to pay for grad school.
Is grad school a good investment?
Paying for college isn’t always easy — but if you’re considering going back to school in order to earn your master’s degree, you already know that.
However, if you’d like to boost your chances of employment and increase your salary potential, the numbers say that pursuing a postgraduate degree at grad school is a wise place to start.
According to a research by the Bureau of Labor Statistics, the average median weekly earnings for a person with a master’s degree is $1,545. Meanwhile, the average weekly salary for somebody with only a bachelor’s degree comes in at just $1,305. Workers with only a high school diploma are looking at a salary of just $781 per week.
Surveys also suggest that grad school drastically reduces your risk of unemployment.
If you’ve got a master’s degree, you’re almost 20% more likely to gain employment than people with a normal undergraduate degree alone.
Why does grad school increase your chances of employment?
Above all else, achieving a master’s degree demonstrates to prospective employers how dedicated you are and how much time and energy you’re willing to devote to developing new skills and honing your craft. Likewise, grad school programs empower you with specialist, research-driven knowledge that separates you from the pack where hiring pools are concerned.
All in all: grad school is a good investment, statistically speaking. But as we’ve already pointed out, it’s not the cheapest, either.
A master’s program at Brown University in 2021/22 will set you back $60,944 per academic year. A postgraduate program at Duke costs $28,950 per semester. Even a school like the University of Kansas will come in at around $24,430 per year for a typical grad school program.
Most of us haven’t got that much cash lying around. Fortunately, there are plenty of funding options you may be eligible for that can be used to pay for grad school.
How to pay for graduate school
When it comes to paying for grad school, there’s no right way or wrong way. No two students are alike, and so the way you ultimately fund your postgraduate studies will be different from the person sitting next to you in class.
Each grad school funding option comes with its own set of pros and cons. To help you get started, we’ll break down a few of the most common ways to pay for grad school.
Tuition assistance from your employer
If you’d like to earn your master’s while continuing to work full-time or part-time, you may find that your employer is willing to offer tuition assistance.
Many workplaces now offer employer-sponsored tuition reimbursement programs in which an employer will offer to repay you for some or all of the cost of your grad school tuition. It’s important to note that this employee benefit does typically go hand-in-hand with a few conditions.
In a lot of cases, employer tuition reimbursement programs will require you to work toward achieving a postgraduate qualification that has something to do with your current profession and job.
That said, this isn’t always the case. Tuition fee reimbursement packages vary dramatically from one employer to the next — and so the best way to find out whether your employer is able to offer support is simply by asking your human resources (HR) department.
Scholarships and fellowships
One of the best ways to put a dent in your grad school tuition is by earning one or more scholarships or fellowships.
The major benefit of funding your postgraduate studies using scholarships is that scholarships don’t need to be repaid.
Scholarships are one-off or annual awards given to grad school students for a number of reasons. Some scholarships are awarded based on financial need; others are awarded based on your previous academic performance. Some are given based on applications, others as prizes in competitions or essay contests, and everything in between.
A fellowship is a little bit more specific. A grad school fellowship is essentially a scholarship designed for students who are already in the process of completing a grad school program. However, these grad students are keen to pursue additional specialized training that goes beyond the traditional.
These are typically offered internally at colleges or universities, and they’re often both merit-based as well as highly competitive.
There are plenty of private or industry-specific grad school scholarships available, so it’s worth doing research online to find out what options are out there. Likewise, most grad schools offer various institutional scholarships that you might be eligible to apply for.
Just like scholarships, grants are sums of money that generally don’t need to be paid back. There are loads of different funding bodies and institutions that award grants specifically designed to fund postgraduate courses.
The most common types of grants you’ll run across include:
- Federal grants
- State grants
- School grants
- Organizational or corporate grants
Most federal and state grants are needs-based. That being said, some federal grants are awarded based on discipline or the course that’s being studied. For example, TEACH Grants are awarded to graduate students working to become teachers, while Fulbright Grants are designed for U.S. students studying for a master’s at an overseas university.
School grants are awarded for a variety of reasons. Some may be awarded to promote study in specific fields, increase student diversity, or more.
Finally, organizational or corporate grants are typically awarded to help postgrad students working toward a degree that aligns with the body’s interests.
If you have the means and you’re working with a long enough timeline, one of the best ways to fund your grad school program is by saving. By saving money for your tuition, you won’t have to take out a long-term loan, bother applying for scholarships, or ask your employer for help.
But for most of us, saving cash is a lot easier said than done. That’s where investment vehicles like 529 plans come in.
A 529 plan is a tax-advantaged investment account that allows individuals to save for future college expenses.
Parents typically set up a 529 account for a child when they’re relatively young and make regular contributions over several years. By the time that child is out of secondary school and ready for college, the 529 account should then be big enough to put a pretty big dent in that child’s college tuition.
Although 529s are most commonly used for undergraduate studies, they can be used to save for grad school, too.
One of the major advantages of saving with a 529 is that all the withdrawals you make for higher education expenses or tuition are not subject to federal income tax. That being said, there are rigid rules around what constitutes a qualified education expense.
These rules vary from state to state — so before starting a 529 for yourself or your child, you should do your homework to make sure you understand how you can use it.
Work for the graduate school
Another great way to help you pay for grad school is to work for the institution itself.
Most colleges offer teaching and research assistantships that provide funding to master’s students when they spend time working for the grad school in a research or teaching capacity.
These assistantships are also often called studentships.
Funding for grad school studentships will often be generated from a particular departmental or supervisor’s budget — but external funding bodies also often form partnerships with grad schools to fund studentships.
While studentships don’t need to be repaid, it’s important to bear in mind that you’ve got to work for the funding. You’ll be expected to carry out specific teaching responsibilities or activities, which are normally specified in a contract.
That being said, studentships are also a fantastic way to develop new skills.
Federal student loans
Although grants and studentships are fairly common, a large number of graduate students tend to rely on federal student loans to pay for their master’s tuition.
If you’re studying toward a postgraduate degree, you can borrow up to $20,500 per year in Direct Unsubsidized loans. Unlike a subsidized loan, an unsubsidized federal loan requires you to pay back the interest on the tuition fees you borrow.
That being said, if your grad school expenses exceed the institutional cap on your Direct Unsubsidized loan, you’ll normally be able to pay for the remainder of your costs using a Direct PLUS loan.
The amount of money you can borrow using a Direct PLUS loan will depend on the cost of attendance at your particular school. The amount of financial aid you receive will then be subtracted from that cost of attendance to establish a loan cap.
You can apply for a federal grad school loan online through the William D. Ford Federal Direct Loan Program.
Private student loans
If for some reason, you’re unable to secure a federal student loan, you can always apply for a private student loan. There are a range of mainstream banks and lenders that offer graduate student loans.
But there are a couple of important points you’ve got to bear in mind where private student loans are concerned.
Unlike subsidized federal loans, most private student loans will require you to start paying interest on the amount you borrow from the second that money touches your bank account.
Likewise, many federal student loan programs include loan forgiveness clauses that effectively write off the remainder of your student debt after a certain number of years.
That being said, private student loans do tend to offer master’s students a direct and effective pathway to funding their studies.
If you’ve served in the military or are currently serving, you can also use military benefits to pay for grad school.
There are a range of benefit options available, but one of the most popular options is via the Post-9/11 Veterans Educational Assistance Act of 2008.
Through the Post-9/11 GI Bill, the United States Department of Veterans Affairs (VA) will pay for 36 months, or the full cost of in-state grad school tuition and fees — assuming you qualify for 100% benefits.
The payment you receive from the VA for grad school will depend on information from your college or university that lets the VA know how much “training time” you’re carrying out.
Tips for paying for graduate school
At the end of the day, there’s plenty of grad school funding opportunities available, depending on your eligibility. But if you’re trying to maximize your chances of receiving financial aid and paying for grad school, there are a few tips worth considering.
Like it or not, a large proportion of grad school funding is awarded on a first-come, first-served basis. That means if you want to be considered for a particular scholarship, studentship, or grant, you’ve got to apply as soon as possible.
Similarly, most scholarship programs and federal student loans include strict application deadlines that you can’t afford to miss.
Talk to your school’s financial aid office
You know what they say about “those who don’t ask,” right? Well, the same rule applies to grad school funding.
Your college or university will likely have a number of funding options available to you that you may be unaware of. The best way to find out about those opportunities is to get in touch with your school’s financial aid office and ask what options you may be eligible for.
Shop around for the best price
If you’re considering a private student loan, shopping around is absolutely critical. Each lender will likely be offering you a different interest rate or loan terms. Some of those terms might sound great at first glance — but if you really crunch the numbers and consider your finances, you may end up seeing things a little bit differently.
You should discuss grad school loan products with a number of lenders, ask questions, and compare each loan against other contenders before you sign anything. This will ensure you get the best possible deal.
Choose an accelerated program
Another way to save money on grad school is by pursuing an accelerated master’s program.
An accelerated program allows undergraduates to earn their bachelor’s degree and master’s degree at the same time. This saves students both time and money. If you’ve got a clear vision for your long-term academic plans, it could be worth considering working toward both degrees at once.
Figure out your grad school ROI
Before you start working to pay for grad school, it’s always worthwhile to figure out your grad school return on investment (ROI).
There are loads of online grad school ROI calculators worth checking out, but the process of working this out is relatively simple.
First, calculate the cost of the postgraduate program you’re considering. Then you’ve got to develop a conservative estimate of your first year’s salary after finishing grad school. Finally, subtract that salary from the sum of any outstanding debt for your undergraduate studies and projected grad school debt.
If your post grad school salary is higher than your projected debts, you can argue that the master’s program you’re looking at offers a positive ROI. If you’re going to end up owing more in debt than you’re making, it could be worth reconsidering your options.
Consider student loan forgiveness
One of the most useful aspects of taking out a federal student loan to pay for grad school is loan forgiveness.
The government’s Public Service Loan Forgiveness (PSLF) Program writes off the remaining balance of your federal student loan after you’ve made 120 monthly payments under a repayment plan. To be eligible for loan forgiveness, you’ll normally need to be working full-time for a qualifying employer.
You can learn more about your eligibility for loan forgiveness online using the PSLF Help Tool.
At the end of the day, going to grad school increases your chances of landing a job and getting a higher salary — but postgraduate tuition doesn’t come cheap.
Fortunately, there are plenty of available options you can use to pay for grad school. Funding sources range from tuition assistance and scholarships to 529 plans, grants, loans, and more. But the funding option that you ultimately choose has got to depend on the course you choose, your time horizon, financial means, and long-term career goals.
That’s why you’ve got to do your homework and take your time considering your grad school funding options.
Want to learn more about how to pay for grad school? You’ve come to the right place. Check out TheGradCafe.com for more information about funding your master’s, including tips, tricks, and more.