How to Fund a Graduate Education

For many career paths, attending graduate school is a necessary next step. Doctors, lawyers, psychologists, librarians and teachers all require an advanced degree.  Additionally, many choose to re-enter the world of academia after some years in the working world in order to further their level of expertise. However, the demands of graduate school are high, entailing a great deal of time, discipline, and money. The number of students enrolled in a graduate level program continues to rise annually – and many of those students become overwhelmed with how to finance these programs.

After filling out the FAFSA and receiving the award letter from the school, graduate students should take out the maximum amount of Stafford Loan funds they have been awarded. Stafford Loans are the most commonly-known form of federal financial aid, providing graduate students up to $18,500 per academic year, based on need. There is no credit check, no collateral required and payments are not due until after graduation. However, $18,500 usually does not cover all the expenses associated with the entire cost of education.

The long-awaited Graduate PLUS loan became available on July 1, 2006 to all graduate students enrolled at least half-time in a program that participates in the federal loan program. Before the Graduate PLUS loan, there were very few financial aid options tailored to graduate students. After exhausting the maximum Stafford subsidized funds lent ($18,500), graduate students had to turn to high interest rate credit cards, home equity, or savings to get over that hurdle. The Graduate PLUS loan gives graduate students the option that they need – a low, fixed interest rate loan to fund up to the cost of education and no required payments while enrolled in school.

Sometimes, however, last minute or unplanned expenses come up – laptops break or lab supplies need to be purchased. Private student loans allow graduate students to also borrow up to the cost of education. Unlike a federal loan where the funds are sent directly to the school, many private loans cut the check directly to the student. Therefore, the student can use the funds at their discretion for any educational-related expense. While interest rates are typically based on credit, many find that the benefits of a private student loan outweigh the costs – repayment waits until graduation, the FAFSA isn't required, and students can fund up to the cost of education.

Every graduate student has a different need for student loans and there are many options available, so do your research before applying. Make a budget and subtract expenses from income (loans, salary, etc.) There are solutions to funding a graduate education but it starts with you.

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