Rich or poor, anyone who plans to attend graduate school should consider applying for funding. Some scholarships, grants and loans are based on need or high academic performance, but most are based on other factors, like intended major, social or volunteer work, extracurricular activities or military service.
Average Annual Funding Sources for Graduate School
Source: College Board 2014
Student Grants and Loans for Graduate School
The grant, loan, and scholarship process begins with the Free Application for Student Federal Aid, a form commonly called FAFSA. Even if the funding you seek comes from a college, university, state or private source, virtually all organizations use FAFSA as the starting point.
Federal Direct Loans
The U.S. Department of Education provides loans to help pay for education at a four-year college, university, community, career or trade/technical school. The largest such program is the William D. Ford Direct Loan Program. For graduate students, the Ford Program offers Direct Unsubsidized Loans, and Direct Plus Loans.
Direct loans pay for tuition, school fees, board and other school charges. They must be applied to education expenses. You need not demonstrate a financial need. The total loan amount is up to $20,500 per school year. Your school determines the amount you can borrow.
Like Direct loans, Perkins loans require a completed FAFSA application. The school must be a participant in the Perkins Loan program. This program is winding down, so unless you were already promised a Perkins Loan, do not expect to be offered this loan.
Federal Grants for Graduate Students
Federal grants provide funds for graduate school, but unlike loans, grants do not require a student to pay back the grant amount. Grants are typically need-based and may serve to promote specific vocational areas, like teaching or medical services; or provide support for populations that have been historically underserved, like certain ethnic groups or minority women. Active and honorably discharged U.S. military members may also be eligible for GI grants and loans. Finally, individual colleges and educational institutions may offer specific grants.
Review your options for the following grant programs:
Teacher Education Assistance for College and Higher Education (TEACH) Grant
Student Loan Discharge Programs
Discharge programs forgive all or a part of the remaining balances on your federal student loans. See the MoneyGeek.com Guide to Student Loan Forgiveness to learn more about the many federal and private loan programs available to discharge student loans.
Private Student Loans
Private student loans generally have higher interest rates than federal loans, making them more expensive. Consequently, they should be considered as a last resort. Private student loans are issued by banks, credit unions, colleges, schools and other institutions. Eligibility is based on the student’s or parents’ ability to repay the loan.
Private student loans have no loan amount cap.
The loan amount is based entirely on the borrower’s ability to repay.
Interest rates are generally higher than federal loans.
A co-signer is usually required and liable for the loan amount if you fail to pay for any reason, including disability or death.
Repayment terms generally do not allow for restructuring based on income. Ability to suspend payments for a period of time is very limited.
You don’t have to repay scholarships, grants or work-study program funds. So seek graduate school and career school money in this order:
Free money — scholarships & grants
Earned money — work-study
Borrowed money — fed student loans
Borrowed money — private student loans
Federal Work-Study Programs Pay You to Study
The Federal Work-Study (FWS) Program provides full- and part-time students with part-time jobs related to their field of study. The students, who generally are with financial need, work in approved jobs to earn money to help pay or repay education expenses.
Federal Work-Study Description
Work-Study Program funds must be used for education-related expenses. Eligibility is based on need so the student’s, parent’s or guardian’s financial statement is required. Each school participating in FWS has its own campus-based Work-Study Program. Most jobs are in a field related to a student’s course of study or in community service work.
Work-Study Programs pay at least the federal minimum wage, though programs set caps on earnings. Work-Study job positions are generally filled on a first-come, first-served basis. Students should check with the school to determine the start date for applications and apply as close to that date as possible.
Federal Work-Study Program Requirements
Each school has its own requirements for Work-Study eligibility as well as specific jobs and pay rates for participants. A completed FAFSA application is usually required.
Graduate School Funding Alternatives
Colleges, universities and career schools may offer alternative ways to pay for school, including teaching, research or resident assistantships. Some schools have programs that include a waiver of tuition and offer stipends to grad students.
Grad students and career school certificate seekers should contact their schools of choice, and the departments within the schools that sponsor their course of study, for position availability, application deadlines, list of benefits and details of how these programs work.
Other sources of funding may include federal programs such as AmeriCorps and Department of Health and Human Services scholarships; state government grants; college or career school scholarships; nonprofit or private organization scholarships or grants.
Graduate Assistantships are temporary employment offered by academic departments, professors and other campus offices.
Teaching Assistantship Description
Graduate Teaching Assistants, or “T.A.s,” help teach undergraduates. Duties may include grading exams and papers, tutoring and teaching classes.
Research Assistantship Description
Research Assistants, or “R.A.s,” work on academic research projects under the guidance of a professor. Ph.D. candidates are sometimes called predoctoral associates. Duties may include grading exams and papers, tutoring and teaching classes.
Resident Assistantship Description
Graduate Resident Assistants, or “G.R.A.s,” are responsible for general supervision of residence halls. Duties may include opening and closing the residence hall at the start and end of a school year; helping residents live together and build a sense of community; resolving conflicts; serving as a first responder in emergencies.
AmeriCorps is a federal program providing community services in education, public safety, health and the environment. Individuals who complete terms of national service are eligible for a Segal AmeriCorps Education Award.
U.S. Department of Health & Human Services
The U.S. Department of Health and Human Services has scholarships for undergraduate and graduate students pursuing a healthcare career. These include:
National Health Service Corps (NHSC LRP)
State Departments of Education Grants, Scholarships and Loans
Individual states, as well as U.S. commonwealths and territories, have Departments of Education that sponsor scholarships and grants for graduate schools and careers in education. Candidates should contact the Department of Education in their state, as well as state offices for technology, vocational-technical and vocational rehabilitation to review opportunities.
College or Career School Scholarships, Nonprofit or Private Organization Scholarships or Grants
Many colleges, career schools and nonprofit and private organizations offer grants and scholarships to help finance graduate or career school. Examples may include a college grant as the result of school alumnus or alumna benefactor, or a scholarship from a community-based or service-based organization to promote an area of study or vocation.
Graduate School Financial Aid Timeline
Every source of funding for grad school, whether federal, state, college or nonprofit, has specific start and end dates for applications. Some applications, such as those for Federal Work-Study Programs, are on a first-come, first-served basis. Bottom line: You must meet the deadlines to have an opportunity get funded.
Submit your application(s) for graduate school
Complete the application section indicating you are applying for financial aid
Research additional grant, loan and scholarship opportunities
Look into federal loans and grants
Check out work-study opportunities at the colleges where you are applying
Research assistantships in the college departments of your course of study
Look at resident assistantships at the colleges where you are applying
Consider Department of Health & Human Services scholarships, if applicable
Seek Department of Education grants and scholarships in your state
Look into nonprofit or private organizations grants and scholarships
Register for your Free Application for Federal Student Aid (FAFSA) ID from the U.S. Department of Education
Start saving for grad school, if you haven’t already, so you can cover expenses when school starts in the fall
FAFSA applications are available Jan. 1
Find the college school codes for each school to which you apply
Gather your documents and fill out the FAFSA application. Fill in up to 10 college codes. Before you get started, you may want to check the Internal Revenue Service website for a transcript of your most recent tax return because if your application is need-based, the government will want to verify income
On average, the application takes 17 minutes to complete
If you submitted your FAFSA application in January, you will receive a Department of Education notification, called a Student Air Report (SAR)
Review the SAR carefully to ensure the information is correct
If necessary, correct and resubmit your FAFSA
Submit your FAFSA to be considered for a federal Direct Unsubsidized Loan and the Graduate PLUS loan
Depending on the requirements of individual organizations, you may be submitting FAFSA for state, college, university, career school, nonprofit or private institution grants and scholarships
Once you’ve filed your federal income taxes, adjust any estimated financial information on your FAFSA application
If your SAR asks for a completed independent verification form, send that form to your prospective schools’ financial aid office
Resubmit your adjusted FAFSA application and school independent verification form(s) to the U.S. Department of Education
Additional documents deadline is May 21
Additional documents might include an adjusted FAFSA application, independent verification forms, tax return transcripts and any other documentation required as stated on your SAR
As you receive notices of acceptance from graduate schools, you will be notified of a Personal Access Code (PAC) number so you can access your financial aid status with each school
Set up an email address with your graduate schools so you can receive notifications from the schools’ financial aid office
Your school’s financial aid office will notify you if you are to receive graduate department financial aid; department aid precedes any other form of financial aid
Once your department has notified the financial aid office of any department awards, the financial aid office will determine your eligibility for federal Direct Unsubsidized and/or Graduate PLUS Loans
If you are to receive other financial support, including a Work-Study Program or other employment, notify the financial aid office
Review your financial aid and accept your awards
If you have accepted a federal Direct Unsubsidized and/or Graduate PLUS Loans, sign a promissory note for each program
Complete the required online loan-counseling course
Continue to pursue additional sources of funding, meeting the requirements and schedules for each loan, grant, scholarship or assistantship opportunity
Complete your enrollment and class selections for graduate school
Make sure you are scheduled to complete the minimum number of units each quarter to meet your graduate eligibility requirements and provisions of your loan, grant or scholarship
For convenience, enroll in direct deposit by the first week in September and notify the financial aid office of your account information. The school will deduct any applicable charges; the remaining funds will be deposited in your bank account
Study hard. A graduate degree will improve your career opportunities
Graduate School Financial Aid Quiz
Myths and misinformation abound. How well do you know your financial aid opportunities? Test your financial aid knowledge.
Grants are free money and I’ll never have to pay them back.
The answer is almost true: If you complete your course of study in the allotted time and maintain a good grade point average, your grant is free and will never have to be repaid. However, if you drop out, your grant automatically becomes an unsubsidized Direct Loan and you’ll have to pay it back, including interest charges dating back to the time of your initial grant disbursement.
False is the correct answer. Read the fine print in your grant. With some federal grants under some circumstances, dropping out will cause the grant to become an unsubsidized Direct Loan.
Filling out a FAFSA application can be relatively easy.
Correct! On average, a prospective grad student can fill out a FAFSA application in 10 to 20 minutes.
We’re calling false incorrect. The most difficult part about filling out the FAFSA is gathering your financial information in one place. Completing the FAFSA may be an ordeal for grad students who are disorganized and don’t keep their tax records in one place. Paying a commercial financial aid service will cost as much as $1,000 and you will still need to gather all your information and send it to the service provider.
Scholarships are need-based; grants are merit-based.
The right answer is just the opposite: Grants are often need-based, while scholarships are generally merit-based.
Correct. Generally, grants are need-based and scholarships are merit-based, but there are exceptions.
There are thousands of scholarships available for graduate school.
In addition to college, university and career school scholarships, there are literally thousands of scholarships from community organizations, churches, nonprofits, employers and other sources. If you’re smart enough to get into grad school, you’re smart enough to do research and find scholarship opportunities, both national and local.
Oh come on, you couldn’t even guess the correct answer? See the top of this page for sampling of graduate school scholarships.
Private graduate school loans are easy to get.
Banks, credit unions and other financial organizations will lend you money and they will make good money doing it, since student loans generally have a much higher interest rate than federal loans. However, you will need good credit to qualify, and your parent or guardian will need to cosign and agree to be responsible to pay off the loan if you go into default.
Nope, not the correct answer. Private lenders are eager to lend students money because they make great money doing it.
All federal work-study jobs are drudge jobs.
Generally, the work is in the student’s field of study so the student should find it interesting and will get much needed experience.
Although some work-study jobs may not be as stimulating, many involve working in your area of study or providing valuable services to your community.
My chances of a successful FAFSA application improve if my parents are poor.
This answer is true for some school-based aid packages. However, applicants with family wealth are not disqualified from obtaining student loans.
Graduate and professional degree students are considered independent adults. In most cases, FAFSA applications do not require parent/guardian financial information. However, some schools may require you to disclose your parents’ income.
Federal grad school loans have more forgiving repayment options than commercial loans.
Federal loans like the Unsubsidized Direct Loan and Direct PLUS generally do not require payments while you are in grad school and for a grace period of six months after you graduate, and may allow adjusted repayment levels based on low post-grad employment or extenuating circumstances. Banks, on the other hand, generally require repayment starting soon after loan funds are disbursed and continue until the loan is paid off in full, with few opportunities to adjust the loan payment terms.
Incorrect. When it comes to repayment plans, private lenders are inflexible. For this reason alone, and because they’re more expensive, consider private student loans as a last resort.
Federal grad school loans are offered at low rates so I should borrow as much as possible.
Not so. Most loan interest rates are between 5.8 percent and 6.8 percent.
Although subsidized federal loans have a lower interest rate than private loans from a bank, credit union or other financial institution, you should borrow as little as possible. Find other sources of income like work-study programs. Research shows that students who graduate with large loan liabilities often have significant problems maintaining payments in the early stages of their career and can fall into default, which wrecks their credit rating for years.
Grad school is worth the money, generally.
Grad school graduates have a lower jobless rate (3.4 percent) and tend to make more money than those with only a bachelor’s degree (an average of $69,100 for those with a master’s degree, compared with $57,600 for those with a bachelor’s).
Incorrect. Research involving national income averages indicates people with advanced degrees earn more and have a lower jobless rate than people without advanced degrees. However, the one caveat is accumulated debt. Students who borrow relatively modest amounts and pay off their loans quickly have greater net worth than those who borrow large amounts and continue to carry debt.
GI Bill is a registered trademark of the U.S. Department of Veterans Affairs. More information about education benefits offered by VA is available at the official U.S. government Web site.