Depending on the location and length of your program, graduate school might not cost significantly more than your undergraduate degree.
For the 2017-2018 school year, the average grad student spent just $440 more on tuition than the typical undergrad, according to the College Board.
However, paying for college isn’t the same as paying for graduate school. Your experience can vary. Here’s how.
1. You’re now seen as financially independent
As an undergrad, you might remember fetching your parents’ financial information to complete the Free Application for Federal Student Aid (FAFSA). After all, you were a dependent on their tax return and in the eyes of the Department of Education.
Now that you have a degree under your belt, the Department of Education sees you as financially independent. This time around, you’ll supply your own tax return for the FAFSA. However, your parents could claim you as a dependent on their tax return. The Department of Education and the IRS look at dependency status differently.
The FAFSA will dictate how much financial aid you can receive. But if you have a lower income than your parents, being on your own in the eyes of the Department of Education could mean more need-based aid.
2. Fewer federal grant opportunities
Grad students aren’t eligible for every type of need-based aid from the federal government. You’ll find, for example, that the Department of Education usually reserves Pell Grants for undergraduates. The same can be said for Federal Supplemental Educational Opportunity Grants.
You could receive a Pell Grant, however, if you’re enrolled in a teacher certification program. Likewise, future teachers could be eligible for the government’s Teacher Education Assistance for College and Higher Education (TEACH) Grant. To receive a TEACH Grant, you must agree to work for at least four years serving students from low-income families.
Being a graduate student could pay dividends when you apply for state-based grants. Some states offer grants specifically for grad students. The Arkansas Health Education Grant, for example, offers thousands of dollars in aid to aspiring medical professionals.
3. Better positioning for scholarships
As a high school senior or undergraduate paying for college, you might’ve struggled to stand out on scholarship applications. Now that you have a more defined career path, you could have an easier time convincing scholarship committees that your education is a worthy investment.
Look to professional organizations in your field that might be awarding gift aid. If you’re seeking a master’s degree in journalism, for example, you might try your hand at the Society of Professional Journalists’ Terry Harper Memorial Scholarship. Highlighting the focus of your degree and how you plan to use it could go a long way.
4. More work opportunities on and off campus
One piece of federal student aid that doesn’t go away when you become a graduate student is the Federal Work-Study Program. If your FAFSA shows you have a proven financial need, you could find part-time on-campus work through the program.
But as a grad student, you might score higher-paying or more rewarding job opportunities. If you haven’t already chosen a school, search for those that offer tuition waivers to employees. You can do this by contacting financial aid offices.
Your job options during grad school include an assistantship, which typically involves working alongside a faculty member. You could find yourself conducting research for a professor or substitute teaching their class.
If you’ve already turned your bachelor’s degree into an off-campus job, you could ask your current employer if it’ll help pay for your grad school expenses. You can strengthen your case if the degree you’re seeking will make you a more valuable asset to your employer.
5. Bigger borrowing limits
If gift aid doesn’t fill the gap between your savings and your program’s cost of attendance, you have access to federal student loans.
In fact, you can borrow even more from the government. As an independent grad student, you could borrow up to $20,500 per year in Direct Unsubsidized Loans. Undergraduates paying for college are limited to between $9,500 and $12,500 annually in Direct Loans.
You now also have access to Direct PLUS Loans, which are for grad students and the parents of undergrads. You can borrow up to the amount of your program’s cost of attendance.
The maximum amount you can borrow during your academic career increases from $57,500 (for undergraduates) to $138,500 (graduate or professional students). The latter amount includes what you borrowed for college. So if you took out $50,000 in federal loans for college, you have $88,500 left at your disposal.
Despite the increased allotment, only borrow the amount you need. As you learned in college, taking out a student loan means eventually having to pay it back with interest.
6. Higher federal student loan interest rates
Federal loan allotments are higher for graduate students. But interest rates are too.
The interest rate for a PLUS Loan is 7.00% for loans paid out between July 2017 and July 2018.
The rate for Direct Unsubsidized Loans, meanwhile, is 4.45% for undergraduates but 6.00% for graduate or professional students. That increase makes for a larger monthly payment when you’re done with school.
If you have $35,000 in loans at a 4.45% interest rate, for example, your payment would be $362. But with a 6.00% rate, that payment would balloon to $389, according to our student loan payment calculator. Over the 10 years of the Standard Repayment Plan, you’d pay $3,202 in additional interest.
Grad students also lose access to Direct Subsidized Loans, which are interest free while you’re enrolled at least half time. So if you rely on PLUS and Direct Unsubsidized Loans in grad school, interest will start to accrue on them as soon as they’re disbursed.
The longer your graduate program, the more interest you’ll pay over time. That inspires a lot of grad students to seek out one-year programs.
7. Lesser need for a private student loan cosigner
You never needed a cosigner for a federal student loan when you were paying for college the first time around. And you won’t need one as a grad student unless you have an adverse credit history.
It’s possible to secure grad school loans with bad credit. For a PLUS Loan, for example, you’ll need an endorser who agrees to be responsible for repayment if you fall behind.
More likely, you’ve had time to improve your credit score now that you’re an older, wiser grad student. In that case, an endorser — or cosigner, for private student loans — might not be as necessary as it was when you were paying for college.
In fact, 92% of undergraduate private loans had a cosigner during the 2017-2018 school year, according to MeasureOne. But only 62% of graduate student loans had a cosigner.
Remember that you could apply with a cosigner even if you don’t need one. Riding the creditworthy coattails of a parent or someone else could help you score a lower interest rate.
Like paying for college, grad school won’t be a piece of cake
Your graduate program’s cost of attendance might not dwarf your undergraduate’s. But you’ll soon learn that paying for it will require just as much effort.
Now that you know exactly how it’ll be different, you’ll be better prepared to pay for college a second time.
Like the first time, secure as many grants and scholarships as possible. That’ll help you focus on your career and worry less about debt once you graduate.
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