A graduate degree can be expensive, but financial aid can help to make college more affordable. Before obtaining financing, it is important to establish a monthly budget or spending plan. It will show you how fast expenses can add up, as well as help you identify unnecessary or extravagant expenses.
There are two types of plans you should consider creating. First, create an in-school budget, incorporating all expenses you will be taking on while you are attending school. For some students this may help you in deciding whether full-time or part-time enrollment is the better option. Second, you can create a budget for post-graduation, incorporating future earning potential and loan repayment. Looking forward is very important when deciding how much loan burden you can manage. When borrowing education loans, it is important to borrow only what you need and to consider the amount you are borrowing with your expected income after completion of the degree.
Graduate students have the unique opportunity to look into more creative funding options including fellowships, assistantships, and work-study. Check with the Financial Aid Office and individual department at a graduate school to find out what opportunities for assistance may be available.
Fellowships – Typically offered by private and government organizations for specific areas of study, fellowships can substantially help offset the cost of graduate study, if not pay for the entire degree. They usually involve a research project that can be used to further the purpose of the organization offering the award while at the same time advancing the student’s skills in a particular field of study. Visit these websites for more information:
Assistantships – Usually provided to graduate students through part-time academic employment. Graduate assistants are paid a small stipend in exchange for working for the college or university, typically in research, teaching, or residential life.
Work-Study – This federal program (identical to the undergraduate program) allows a student to do work on behalf of the campus and earn money. Typically, work-study is made up of on-campus opportunities like working in the bookstore or an administrative office, but some schools offer off-campus service-related opportunities in the community.
Employer Tuition Reimbursement – Many employers offer to pay a portion of an employee’s tuition for course work in a field of study related to a job in the form of tuition reimbursement. Under IRS regulations, $5,250 of the yearly employer tuition reimbursement for graduate expenses may qualify for income tax exemption. Check to see if there are similar state tax exemptions.
Scholarships – There are limited scholarships available for graduate students and typically they are awarded for specific areas of study. Inquire with the graduate school financial aid office and visit these scholarship databases:
Departmental Grants – These grants are available through the department chair at a particular school. Often, the grants are linked to academic performance. Talk with the Department Chair or Dean at the graduate school to find out more.
Graduate students may be familiar with financial aid having been through the process as an undergraduate. As a student entering graduate school, many of the same financial aid basics apply. The biggest change in the process this time around is now the student is considered an independent student, and therefore, parental financial information is no longer required when filing the Free Application for Federal Student Aid (FAFSA).
When planning for graduate school, students may find it helpful to review the Net Price Calculator (NPC) on a school’s website. These calculators use institutional data to provide estimated net price information to students based on a student’s individual circumstances. Students are able to calculate an estimated net price of attendance at an institution. Net price is defined as cost, or price of attendance, minus grant and scholarship aid.
Students will file the FAFSA at fafsa.gov using their own income and asset information. The FAFSA needs to be filed after January 1 of the year the student plans to enroll. Students should check with each school they apply to for the required financial forms and deadlines. Some institutions may ask for the CSS Profile in addition to the FAFSA. The CSS Profile can be found at collegeboard.org.
After completing the FAFSA, the information is submitted to the U.S. Department of Education. Using a complex methodology, the Department calculates a student’s ability to pay for the Cost of Attendance (COA). The student’s ability to pay is referred to as the Expected Family Contribution (EFC). College financial aid offices subtract the student’s EFC from the college’s Cost of Attendance (COA). The remaining amount is considered a student’s demonstrated need at that particular school. The financial aid office then begins to try and meet that need by distributing aid from both federal government programs and campus resources in the form of grants, scholarships, subsidized and unsubsidized loans and work programs.
Each school that a student has been admitted to will send a financial aid award letter detailing the amount of aid the college is able to offer. At this point, a student should compare the offers and begin to think about how they will finance their portion of the cost. Click here to view an easy-to-read Graduate Federal Aid Programs handout.
Beyond filing the FAFSA, students should search locally for outside scholarships. Outside scholarship may lessen the amount a student needs to borrow therefore saving on interest in the long run. Students can search for local scholarship opportunities at www.nhcf.org. National scholarships may also be available found searching fastweb.com.
If a student is looking into private loans or wants to calculate what repayment would be on federal loans, they can find budget and repayment calculators at nhheaf.org under the Resources tab.
One of the biggest challenges for most prospective graduate students is managing undergraduate loans. Most loan programs have provisions allowing students to postpone current student loan payments during enrollment in a degree program. Loan servicer(s) for both federal and private student loans will provide details about available options.
While enrolled in a graduate program, payments on undergraduate loans through deferment or forbearance may be available. There are many types of deferment depending on your situation, and if deferment is not an option, a forbearance (a temporary postponement of payment of your principal and interest) may be available.
There are programs that will forgive all or some federal student loans based on career choice. Public Service Loan Forgiveness is a new program that will forgive any remaining student loan debt after 10 years for eligible people who work in qualifying public service positions. Other loan forgiveness programs are available for teachers, nurses, or AmeriCorps and PeaceCorps volunteers.
Visit studentaid.ed.gov for more information.