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What is the Average Amount of Graduate School Debt?

Congratulations! Perhaps you landed here because you’ve started thinking about going to graduate school! You probably have a lot of questions, including how to avoid graduate school debt.

Graduate students account for nearly 50% of all student loan debt, despite being such a small percentage of the borrowers. Remember to keep in mind that loans aren’t the only solution! This guide can help you cut some or all of the cost of attending graduate school.

First, what is the state of graduate school debt?

According to the National Center for Educational Statistics, as of 2015-2016, the average master’s degree loan balance was over $60,000, while the average doctorate loan balance was between $108,000 and $186,000. In total, the average debt from graduate school (including both master’s and doctorate degrees) is $78,118 per person who borrowed. While avoiding all student loan debt may not be possible, the goal should be to borrow as little money as possible. Keep on reading to learn how!

Choose your graduate program

There are funding options available that don’t include taking out a loan or taking minimal loans. The amount of funding you need and ultimately decide to sign off on (if you do take loans) might be influenced by the graduate degree type, the ranking of your chosen  program, and what your future earnings look like once you graduate. 

Type of graduate school

Before you consider how much graduate school might cost, it’s important to figure out what type of graduate program you want to get into. You could choose between a doctorate or a master’s degree, and each has their own pros and cons. Once you make that decision, there are multiple different fields that you could choose from. 

Strive for top programs 

After you choose your desired field, look up schools with high ranking programs in that subject. If the school is well-known for science or business or any other program, a degree from that institution would be worthwhile in your field. Always check the university’s website for the requirements for your graduate program to make sure you qualify. 

Future earning potential

Another factor to consider when picking your field of study is future earning potential. Figuring that out is important to make sure you get a positive return on your investment (known as the “ROI”) into graduate school. It can also help you decide what profession or job position is ideal for the lifestyle you want to achieve. For future earning potential and job growth, the US Department of Labor’s Occupational Handbook is an excellent place to start. 

Related: Top 20 highest paying careers

Funding options

Institutional financial aid

The first part of cutting down the price of graduate school is filling out your FAFSA application. While it will be similar to filling out FAFSA as an undergraduate, there are some key differences. For example, you probably won’t be able to use your parent or guardian’s financial information, so you’ll have to fill out your own. Based on your information, FAFSA should give you an idea of the financial aid you qualify for as well as any loans if you decide to go that route. 

Supplementing your financial aid

You can supplement any financial aid you receive with scholarships, grants, or fellowships. There are tons of scholarships and grants available to graduate students, and some undergraduate scholarships accept graduate applications. Scholarships360 even provides you with a personalized list and additional resources like our list of the top scholarships for graduate students

There is also the option of applying to fellowships and grants. Grants usually have requirements to qualify while fellowships usually require a specific field of study or a project to receive funding. However, fellowships are more exclusive to graduate students and offer a great opportunity to grow as a professional.

Also see: Grants to pay off student loans

Tips to reduce debt during graduate school

1. Get an on-campus job or internship

Having a job on campus is both convenient and beneficial to reducing debt. Some graduate positions even offer free housing or discounted tuition. Either way, on-campus jobs or internships are a great way to earn money around your class schedule.

Ideally, you should choose a graduate assistantship or internship that relates to the field you want to enter after college. This will give you an opportunity to build up your resume as well as get real-world experience. There might also be opportunities to network and gain insight from professionals in your career.

2. Get a job offering tuition reimbursement

If you don’t have the opportunity to get an on-campus position, don’t worry, you still have more options! There are a number of jobs that offer tuition reimbursement programs to cut some or all of the cost to attend university. Some businesses will even allow you to study the field of your choice while employed there.

It’s important to note that full-time employees usually receive the most money in tuition reimbursement, and there might be a required period you have to work before you can qualify. The best part is, even if you receive reimbursement, you can still qualify for financial aid at your university!

Here’s some of the companies that offer tuition reimbursement:

Businesses will probably require you to remain employed during or for a period after you graduate in order for your tuition and fees to be completely covered. So, try to pick a job that you enjoy that won’t be an added stressor on top of attending school. 

Fortunately, graduate degree programs can be more flexible to accommodate people’s lifestyles, with a number of programs offered completely online.

3. Figure out a budget

Making a budget can help save a lot of money while in college. Start by making a list of essential expenses you have for the month, like your phone bill, rent, or utilities. Then, assign a set amount to each expense from your income. The money that’s left over should ideally be split into spending money and your savings. 

By setting specific amounts to certain expenses, it should cut down how much money you regularly spend. It also helps you stay on top of your bills. Budgets can function as a resource for repayment plans if you decide to take out any student loans. 

Related: How to create a budget as a college student

4. Start paying back your loan(s) early

If you find yourself needing to take out a loan for college, it’s a great idea to start making payments before you graduate. Some student loans are deferred until you graduate, but that just means you have a certain period of time before it’s expected for you to pay it back. It doesn’t mean that the loan stops accruing interest. 

Therefore, it’s ideal to pay down your loan early on if you can. The years spent in college are a long time for interest to stack up. Starting payments  early can help with becoming overwhelmed and stressed about your loan balance.

Set up a repayment plan for yourself to get an idea of when you can start paying back your loan, as well as how much you can afford to put toward it. Each payment you make should at least cover the amount of interest each month, and you should try to plan to gradually increase your payments over time.

Also see: Grad school financing options

Final takeaways

No matter your financial situation, there are plenty of options for you to avoid graduate school debt. Even if you’ve already secured a full-ride to the university of your choice, getting an on-campus job or setting up a budget could help curb everyday expenses. Whether you decide to apply for grants and fellowships or build a repayment plan for your loans, a price tag shouldn’t stop you from continuing your education.

Also see: Top grad school scholarships

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