Paying for Graduate School

Paying for graduate school is similar to paying for an undergraduate program — and can be quite different. Financial aid for graduate students comes from government, private, and institutional resources, but much of it is in the form of loans. Financing graduate school requires research and diligence.

Similarities between grad and undergrad program financing

As with undergraduate programs, if a student is admitted to a graduate program, the school has to help work out the financing arrangements.

A great deal of financial aid is available and sources vary: federal and state governments, private foundations, research organizations, lenders, and the institutions themselves.

Financial aid is awarded based both on need and merit:

  • Need is determined by the institution itself, using an agreed-upon formula or its own need analysis. The need calculated is based on the cost of attendance minus your expected family contribution.

  • Merit-based aid is awarded based on student scholarship. Sometimes the amount awarded is based on a combination of merit and need.

You apply for financial aid using the same form as you do for undergraduate programs, the FAFSA form. Here, you specify the schools to which you want the information sent. You may also be required to fill out a second form, for example, the PROFILE or an institutional form.

Financial aid is available to part-time students, as well. Amounts may be less, especially grant monies, but attending part time may allow you to work and earn a significant amount that you can contribute to your schooling.

While attending school at least half time (including graduate school), you're not required to pay off your student loans (you qualify for an in-school deferment). For federal subsidized loans, that means no interest accrues; for federal unsubsidized and private loans, the interest accrues and is added to the principal.

Institutions themselves do the awarding so after you have been accepted for admission and have applied for financial aid, all funding decisions are made by the school.

Differences between grad and undergrad program financing

A graduate student automatically is considered independent of the parents and won't need to provide parental financial information. Some programs, however, will continue to ask for parental information (medical school, for example) and may build in an expected contribution from parents for all federal financial aid.

Unfortunately, most need-based financial aid for graduate students takes the form of loans. There's very little grant money available, especially from the federal and state governments.

The maximum loan amounts are significantly higher for graduate students than for undergraduates, so it's possible to finance all the costs (which can include summer programs, added expenses for children, higher rents, and so on) by borrowing more.

There's a great deal of research money awarded to schools that, in turn, award you funds to attend. Usually it's because you'll be working with specific professors on their research, and the funds require that you do the work. Sometimes there are stipends that don't require work, only requiring that you successfully continue in the program and maintain satisfactory academic progress.