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Grad School Financing Options

By Gabriel Jimenez-Ekman

Gabriel Jimenez-Ekman is a content editor and writer at Scholarships360. He has managed communications and written content for a diverse array of organizations, including a farmer’s market, a concert venue, a student farm, an environmental NGO, and a PR agency. Gabriel graduated from Kenyon College with a degree in sociology.

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Updated: June 8th, 2022
Grad School Financing Options

If you’re wondering whether grad students get financial aid, you’re not alone. After completing your undergraduate degree, you may be looking into graduate school financing options. Although some aspects remain the same, graduate school financial aid looks very different from undergraduate. It’s important to thoroughly research your financial aid options. Graduate students account for a disproportionate amount of student debt. 40% of federal student loans are for graduate programs even though only 15% of borrowers are enrolled in at a graduate level.

So, learning about your financial aid options is crucial to your financial stability after graduation. Let’s break down all your options to pay for your next degree. We’ll discuss federal aid, grants, institutional aid, loans, graduate assistantships, and more. Read on to learn about all your options to pay for graduate school.

Related: Top certificates to earn in 2021

Filling out the FAFSA

Your first step in the financial aid process should be to complete the FAFSA. You’ll complete the same form that you completed in undergraduate studies. Although you are no longer eligible for the Pell Grant or Stafford loans, the FAFSA still opens the door to many opportunities. For example, the FAFSA determines eligibility for institutional aid, federal loans, and state aid.

The process for filling out the FAFSA should be the same as when you filled it out for undergraduate. The only significant difference is that you will probably be filing as an independent. As a result, you won’t have to report your parents’ income and assets. This typically lowers your EFC, or Expected Family Contribution.

Related: How to complete the FAFSA for grad school

Federal aid opportunities

Students can take advantage of two types of federal loans to pay for graduate school. They are the direct unsubsidized loan and the federal grad PLUS loan. These loans have worse interest rates than federal undergraduate loans, but they are preferable to most private loans.

Direct unsubsidized loans have a lower interest rate than grad PLUS loans. However, students can only take out up to $20,500 per year in direct unsubsidized loans. Once you hit this limit, you are only eligible for grad PLUS loans.

The TEACH Grant is another federal aid opportunity for graduate students. Hopeful teachers can receive up to $4,000 per year through the program. However, recipients must fulfill a teaching requirement upon graduation. If they fail to do so, the grant turns into a loan and must be repaid.

See also: Everything you need to know about the TEACH Grant

State aid opportunities

Some states have programs to incentivize its residents to pursue specific careers. If a state is low on doctors or engineers, they may subsidize graduate degrees in the field. These grants may come with a stipulation that you accept a job in the state upon graduation. For example, the California University system offers need-based awards to California residents.

Get an employer to contribute

If you land a job in your desired field after graduation, your employer may agree to subsidize your graduate degree. They view these offers as an opportunity to train their workforce and boost employee retention. With your new degree, you should be able to move up in the company. Employers are more likely to agree to an arrangement if you have worked for them for a while. Some may also require that you continue working for them for a set amount of time after receiving your degree.

Related: Tuition reimbursement: What it is and who offers it

Graduate assistantships

Students can also drastically reduce their tuition cost by working for their school. Graduate schools that are part of a university system with an undergraduate program often offer teaching assistantships. In a teaching assistantship, you’ll partner with a professor to help teach an undergraduate course. 

In a research assistantship, you’ll work with a professor to assist in research that they are conducting. You may help retrieve documents, conduct interviews, write papers and proposals, and more. Graduate assistantships offer a myriad of benefits.  They build your resume and help you network with professionals in your field. This prepares you to get a job in the field upon graduation. However, they often have modest pay, and many graduate student workers have to work multiple jobs.

Also see: Everything you should know about graduate assistantships

Scholarships and fellowships

Students can also seek out scholarships and fellowships to pay for their graduate education. There are many scholarships available for graduate students. Many scholarships for undergraduates also allow graduate school applicants. 

Additionally, Scholarships360 has extensive lists of scholarships for graduate students. Check out our list of the Top Scholarships for Graduate Students to start. We may also have a list for your specific field of study. For example, law students will find our Top Law School Scholarships list helpful. For a general search tool to find any graduate level scholarships you may be eligible for, try our Scholarship Search Tool.

Fellowships are also an incredibly valuable resource to pay for grad school. Most graduate schools offer internal fellowships that often provide full funding for a program. These cover tuition and cost of living. If you secure a full funding fellowship, your search for financial aid will be over! External fellowships are often research-oriented and may only cover part of your costs. They may also only last for a year or two rather than the full period of your studies.

Private loans

If you have exhausted your other options but you still need financial assistance, private loans can come in handy. But remember that they are typically less flexible and have higher interest rates than federal loans. We recommend looking for private loans through a private student loan marketplace. Credible,, and SimpleTuition are all great options. For more information, check out: Search, Compare, and Apply for Private Student Loans.

Also read: How much student loan debt is too much?

Next steps

Now that you’ve learned how people pay for graduate school, do some research to find the right fit for you. Look into different programs that you’re interested in and see if they have employment opportunities. And if you are currently employed, reach out to your HR department to see whether they contribute towards graduate education. Also, remember it is never too early or late to start saving. You can open a 529 Plan to receive tax benefits on your graduate school tuition payments. You can make a plan today to help plan out your graduate school financing. Good luck!

Frequently asked questions

Can you use a 529 plan for grad school?

You can use 529 plan funds to pay for grad school just the same as you’d use them for undergraduate education! If you plan on going to grad school in the future, opening a 529 plan is a great idea to get maximum tax benefits towards your educational expenses.

Do grad school students get FAFSA money?

Grad school students must fill out the FAFSA to qualify for federal loans such as direct unsubsidized and PLUS loans. However, they will not qualify for other FAFSA grants such as the Pell Grant. Regardless, it’s always a good idea to fill out the FAFSA to keep all of your options open. Many scholarships will also require FAFSA information to determine your financial need.

Can you get federal financial aid for grad school?

Yes, you can get federal financial aid, but it will not be the same aid that you received in undergrad. You can take out federal direct unsubsidized and PLUS loans, but you will not be able to receive Pell Grant funds like you did in undergrad.

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