Depending on your career goals, a master’s degree can open doors and accelerate your climb up the corporate ladder. It also can help you establish your professional reputation and earn more money.
However, graduate school is expensive. In fact, the average graduate of a Master of Arts program will walk away with a staggering $58,539 in student loan debt between undergraduate and graduate school.
Given the high cost of graduate school, it’s important to know that getting a master’s degree isn’t for everyone. Before you apply for college loans, consider whether graduate school is worth it and explore all your financial aid options before enrolling.
3 questions to ask before taking out college loans
Deciding whether to go to graduate school is a big decision with long-lasting consequences. Ask yourself these three questions before moving forward.
1. What is the cost of my degree?
Tuition at public graduate schools costs $30,000 per year on average, according to education resource Peterson’s, and tuition at private graduate schools costs $40,000 per year on average.
The actual cost of your graduate degree program depends on a range of factors, including your field of study, your location, and the school you choose.
Before enrolling, ask the admissions office how many people graduate on time. If most students need an additional semester or two, that could affect the overall cost of your degree.
2. How will a master’s degree affect my earning potential?
Although a master’s degree can boost your earning potential, a salary increase isn’t a guarantee. It’s wise to research salaries in your field and whether they increase with more education.
Sites such as PayScale and Glassdoor allow you to see what people in your region make and how much a graduate degree could affect your salary. By doing your homework, you might find out that a master’s degree doesn’t pay off enough to make your tuition bill worth it.
For example, a mechanical engineer with a bachelor’s degree working in New York City earns a median salary of $63,000. If that engineer gets a master’s degree, the salary jumps to $69,000.
By contrast, the median salary for a marketing manager who has a bachelor’s degree in New York City is $51,000. If that same person gets a master’s degree, the median salary increases to $54,000. That’s a difference of just $3,000, which might not be enough to cover the student loans you took out to pay for school.
3. What is the job outlook for my field?
Salary isn’t the only factor you should consider when evaluating your degree’s return on investment.
In some fields, it can be difficult to find a job at all, even with a master’s degree. The few positions that are open might pay well, but breaking into the industry and securing a job could be challenging. If it takes months to land a job, the time you spend unemployed might negate your degree’s value.
To find information on your chosen industry, check out the Federal Reserve Bank of New York’s report on the labor market for recent college grads. It outlines the unemployment rate, underemployment rate, median wage, and number of people with a graduate degree in every field.
5 types of financing available for grad students
If you’ve decided that graduate school is worth the investment but need help paying for it, make sure you explore all your options. There are five key sources of financing available.
Fellowships are merit-based grants that might cover the cost of tuition, room, board, and even textbooks. You can secure a fellowship from your school or a private organization. ProFellow is a database of fellowship opportunities nationwide. Use it to find opportunities relevant to you.
If you qualify for a federal work-study program, you’ll work with your school to find a part-time job with a participating employer. You can use the money you earn to pay for a portion of your tuition while building up your resume.
3. Grants and scholarships
Grants and scholarships are the best forms of financial aid you can receive because you don’t have to pay them back. You can find grants and scholarships for graduate school by using resources such as Fastweb and GoGrad.
4. Federal student loans
If you’ve exhausted your other financial aid options, student loans are a good next step. Federal loans are a smart starting point, as they tend to offer lower interest rates and more generous repayment terms than private loans.
As a graduate student, you’re eligible for Direct PLUS Loans, which have an interest rate of 7.00% as of 2018. You’re eligible for a loan if you’re enrolled in school at least half time and don’t have an adverse credit history.
5. Private student loans
If you need more money after turning to federal loans, private student loans are another option. Private loans usually have higher interest rates than federal loans, and they don’t offer federal benefits like income-driven repayment plans. However, they can be a helpful tool you can use to complete your degree.
Financing your education
As you decide whether to take out college loans for a graduate school program, consider how your degree will affect your student loan debt, your chances of getting a job, and your earning potential. By asking yourself the tough questions now, you can ensure you’re making a strong investment in your future.
Need a student loan?Here are our top student loan lenders of 2019!
|2 Important Disclosures for College Ave.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
(1)All rates shown include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
(2)This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7% variable Annual Percentage Rate (“APR”): 96 monthly payments of $179.28 while in the repayment period, for a total amount of payments of $17,211.20. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
(3)As certified by your school and less any other financial aid you might receive. Minimum $1,000.
Information advertised valid as of 5/22/2019. Variable interest rates may increase after consummation.
* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.
3 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
4 Important Disclosures for Discover.
5 Important Disclosures for SunTrust.
Before applying for a private student loan, SunTrust recommends comparing all financial aid alternatives including grants, scholarships, and both federal and private student loans. To view and compare the available features of SunTrust private student loans, visit https://www.suntrust.com/loans/student-loans/private.
Certain restrictions and limitations may apply. SunTrust Bank reserves the right to change or discontinue this loan program without notice. Availability of all loan programs is subject to approval under the SunTrust credit policy and other criteria and may not be available in certain jurisdictions.
©2019 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved.
6 Important Disclosures for LendKey.
7 Important Disclosures for CommonBond.
A government loan is made according to rules set by the U.S. Department of Education. Government loans have fixed interest rates, meaning that the interest rate on a government loan will never go up or down.
Government loans also permit borrowers in financial trouble to use certain options, such as income-based repayment, which may help some borrowers. Depending on the type of loan that you have, the government may discharge your loan if you die or become permanently disabled.
Depending on what type of government loan that you have, you may be eligible for loan forgiveness in exchange for performing certain types of public service. If you are an active-duty service member and you obtained your government loan before you were called to active duty, you are entitled to interest rate and repayment benefits for your loan.
A private student loan is not a government loan and is not regulated by the Department of Education. A private student loan is instead regulated like other consumer loans under both state and federal law and by the terms of the promissory note with your lender.
If your private student loan has a fixed interest rate, then that rate will never go up or down. If your private student loan has a variable interest rate, then that rate will vary depending on an index rate disclosed in your application. If the interest rate on the new private student loan is less than the interest rate on your government loans, your payments will be less if you refinance.
If you don’t pay a private student loan as agreed, the lender can refer your loan to a collection agency or sue you for the unpaid amount.
Remember also that like government loans, most private loans cannot be discharged if you file bankruptcy unless you can demonstrate that repayment of the loan would cause you an undue hardship. In most bankruptcy courts, proving undue hardship is very difficult for most borrowers.
8 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|3.99% – 11.32%2||Undergraduate, Graduate, and Parents|
|4.50% – 11.35%*,3||Undergraduate and Graduate|
|4.84% – 13.49%4||Undergraduate and Graduate|
|4.25% – 11.30%5||Undergraduate and Graduate|
|4.50% – 9.47%6||Undergraduate and Graduate|
|3.74% – 9.72%7||Undergraduate, Graduate, and Parents|
|4.45% – 12.32%8||Undergraduate, Graduate, and Parents|