Grad School Financial Aid
Finding financial aid for graduate school may be difficult in some cases. Financial aid may be available to those who qualify. The process may not be as confusing as you may think, though. Graduate students often turn to student loans to help pay for graduate school. Start by tasking your school. Inquire about available grad school financial aid from the counseling department. This may provide the first step, but it is not all that you may wish to do.
Before you seek out any grad student loans to cover the costs of grad school, use our financial aid flowchart. This chart helps to guide you through questions that may help to locate more opportunities.
Simply respond to each question with a “yes” or “no” to each question. Depending on your answer, the tool takes you to the next step. That includes pulling together your financial aid plan. Completing this short exercise may open your eyes to alternative ways to funding your college education.
The Basics of Financial Aid for Graduate School
Don’t overlook the benefits of grad school financial aid. Students pursuing a master’s degree may wish to take a closer look at available options. Even if you are unsure that you qualify, there may be financial aid opportunities for you. This may include private grad school loans or a graduate plus loan. You may qualify for a Direct Student Loan or your school may decide to provide work study based on financial need.
Filing for the Free Application for Federal Student Aid (FAFSA®) is essential. The FAFSA® application opens the door to available funds. It determines eligibility for Direct Student Loan programs as well as for many scholarship programs, private grants, and fellowships.
If you think you may apply for grad school financial aid, the FAFSA® serves as your application. This may offer access to federal student loans for graduate school. You must meet all eligibility and qualify for financial aid. Grad school financial may also include a fellowship or assistantship programs.
Be sure to contact both your school’s graduate admissions office and your program’s department to inquire about the availability of assistantships, tuition remission, and school-specific fellowships. You should also search for outside scholarships.
What Student Loans Could You Borrow for Graduate School?
According to the Federal Student Aid, a graduate student may be able to borrow as much as $20,500 (health professional students may borrow as much as $38,500) as of 2021. This is through the Federal Unsubsidized Direct Student Loan Program. This program provides student loans for graduate school.
Grad students may also borrow through the Federal Grad PLUS program. The Grad PLUS loan is based on credit. It takes into account your credit history. The repayment begins within 60 days after the second disbursement. The payment may be deferred while you are enrolled half-time or more.
Under the Federal Grad PLUS program, you may borrow as much as your Cost of Attendance (COA) minus other aid including other loans. The federal government determines the loan amount.
There are also private student loan options to help pay for costs not covered by the Direct Student Loans. If you are attending school enrolled part time or more, you may be able to apply to defer full repayment until after you graduate. Some private student loans require interest only payment or a small proactive payment while you are in school.
If you do have to borrow, borrow only what you need in grad school financial aid. Keep in mind your expected salary after graduation. Factor it into how much you may be able to afford to repay when the time comes. Borrowers do pay a higher interest rate on these loans. You want your loan amount to be affordable. Keep a close eye on this as you consider your degree program options.
Filing the FAFSA® for Graduate School
The quickest way to file the FAFSA® is by doing so online. You may sign your FAFSA® electronically with a PIN you typically get from the PIN Site. Make a note to complete the FAFSA® as soon as possible.
It may be easier to fill out the FAFSA® if you have these items handy:
- Your Social Security card
- ID such as a driver’s license
- Your W-2 Forms or other records of earned-income (and your spouse’s, if you are married)
- Federal income tax return
- Bank statements
- Records of other untaxed income you received, including welfare benefits, social security benefits, TANF, veteran’s benefits, and military or clergy allowances
- Your current bank statements and records of stocks, bonds, and other investments
- Your business or farm records, if applicable
- Your alien registration card (if you are not a U.S. citizen)
Other Applications You May Need to Complete
Enrollment in grad school is a big step. So is completing the applications for grad school financial aid. Here are some more applications you may need to complete as you enroll in graduate programs and seek aid for them.
Institutional Aid Applications
Some schools require you to complete a form they provide you. This is called an institutional aid application. On this form you tell the school about outside scholarships you expect to receive. It also offers insight into whether you’re interested in other types of aid such as work study.
Often you may also use this form to explain any special circumstances not taken into account on the FAFSA®. If your grad school program requires one of these applications, they typically mail it to you.
Eligibility for Grad School Financial Aid
Your eligibility for grad school financial aid is often determined by your school’s financial aid office. They review of your processed FAFSA® data. The FAFSA® calculates a number called Expected Family Contribution, or EFC.
The EFC, when subtracted from your college’s Cost of Attendance (COA) determines your financial need. Your college or university determines the COA. The amount typically includes tuition, room and board, fees and estimated living expenses including books and supplies.
COA – EFC = Financial Need
Financial need is an official term for how much need-based aid you’re eligible for per school year. Your financial need is calculated by subtracting the EFC from the COA. In order for you to receive need based aid, your COA must be greater than your EFC.
Your college or university may use the need-based resources they have available to try to meet your Financial Need. In most cases for graduate students, your financial need may not come into play. That’s because there are only non-need based federal programs for graduate students. If, however, you receive an outside scholarship that is only given to needy students, your financial need would be a factor.
If you receive a need based grant, your need comes into play when determining the maximum amount of need-based assistance you may receive.
For example, if your school has a COA of $20,000, you have an EFC of $10,000 and the outside scholarship is $12,000, you would only be able to receive $10,000 of the $12,000 award. The remainder would have to be returned to the provider.
The federal aid eligibility requirements set by the U.S. Department of Education include:
- Have a demonstrated financial need
- Be a US. Citizen or eligible non citizen
- Enroll in an eligible degree program
Grad students are considered independent students. That means their income and assets, and in some cases their spouse’s are considered. This may vary from program to program.
Could Part Time Graduate Students Receive Financial Aid?
It may be possible for part time graduate students to receive financial aid. This includes student loans for graduate school. Many times, they receive less aid than a full time student. As with any other process, start by completing the FAFSA® application. This may provide insight into what type of aid may be available to you. Part time students may qualify for:
- Direct subsidized loans
- Direct unsubsidized loans
- Direct PLUS loans
In addition to this, part time students in grad school may wish to apply for state grants. This may help to reduce costs further.
Different Types of Grad School Financial Aid
Student loans are the primary source of financial aid for graduate students. Other sources include fellowships, grants from the institution itself, scholarships, and work programs. Learn more about the types of grad school financial aid.
Federal Direct Student Loans
- Unsubsidized Student Loans: Interest on federal direct loans accrue on a daily basis. You pay the interest or defer interest until you graduate or are no longer enrolled or not in deferment. However, you are not required to pay the interest until the loan enters repayment. Any unpaid interest is typically added to the principal amount of the loan when the loan enters repayment.
- Fixed interest rate of 5.28% for 2021
- Up to 25 years to repay depending on total borrowed as of 2021
- Maximum of $73,500 unsubsidized only. Graduate Health Professional loan limit is as much as $38,500
- Payment begins 6 months after you graduate or are enrolled on less than a half time basis as of 2021
Federal Grad PLUS Loan
- Available to graduate students
- Fixed interest rate of 7.08% with a 4.236% fee (before October 2020)
- Must meet federal credit requirements
- May borrow up to the Cost of Attendance minus other financial aid including other loans
- Payment begins within 60 days after the second disbursement of the loan as of 2021, but may be deferred while attending school half-time or more. However, interest is accruing daily and any unpaid interest may be added to the principal amount once the loan enters repayment
- Up to 25 years to repay if total borrowed amount exceeds $30,000. Ten years is the standard repayment term as of 2021
Private Student Loans
Financing for graduate school is available through banks and other lenders. We provide an easy-to-use private student loan comparison to evaluate your needs and find a loan program that’s perfect for you. Be sure to do this well ahead of the start of the academic year. You may need your personal financial information to complete this.
Work Study Programs
- Generally offered to very few graduate students
- Available to students with need
- Net Federal Work Study earnings may not exceed financial need
- Award is paid directly to the student in the form of a paycheck
Your college or university, also known as your institution, may provide different types of institutional aid for students. Common forms of aid include:
- Tuition Remission
- Graduate Assistantships
Be sure to check with your school to see what may be available to you.
Fellowships may be available to graduate students. They are typically not available to undergraduate students. This may be an opportunity to reduce some costs associated with your education. Various organizations offer fellowship opportunities. Institutional fellowships are provided by a university. The student is expected to conduct his or her research with the school.
A portable graduate fellowship is another form. The program is applied to the institution of higher learning the student attends. The program itself is not a part of the school’s program. This type of program has more freedom. Students may be able to apply for them through a number of methods.
Fellowships come form independent organizations. They may come from universities. In this way, they may be federally funded. Students need to follow fellowship application guidelines. This may differ from one to the next. External fellowships (another term for portable fellowships) are awarded in the year prior to the student’s attendance. The funds from the fellowship may help cover the cost of tuition or other needs.
Here are a few examples of fellowships:
- U.S. Department of Energy – Computational Sciences Graduate Fellowships
- U.S. Department of Education – Jacob K. Javits Fellowship
- U.S. Department of Defense National Defense Science and Engineering Graduate Fellowship
Scholarships for Graduate School Students
Thousands of scholarships based on need, achievement, affiliation and/or a myriad of other criteria are awarded to students each year. One source to search and apply for scholarships is Unigo.com. After completing a profile about your education, background and interests, you may be matched with relevant awards. Scholarships may be available for students at all levels of education — even graduate students.
Tuition Reimbursement for Graduate Students
If you’re working part time or full time with a company or organization, you may be eligible for tuition reimbursement if the courses you’re enrolled in are aligned with your job description or career. Take the time to check with your employer about tuition reimbursement for employees pursuing advanced degrees or loan forgiveness programs.
These programs are usually managed by your HR department and descriptions of what is offered should be in your benefits package. Even if these benefits are not offered, check with your supervisor to see if your company is willing to contribute to your education, especially if your education may directly benefit your employer or it may lead to your long term retention.
Follow up Grad School Financial Aid Forms
Once the college has received your processed FAFSA® data, they still might need more information to finalize your award. If the school needs anything to complete your package, they typically notify students right away. Feel free to follow up with them.
Things that are typically requested include federal income tax returns/transcripts, W-2 wage earnings statements, 1099′s and/or whether you plan to be receiving an outside scholarship.
Be sure to respond to the school promptly because they won’t be able to finish processing your aid until their requests are satisfied.
If you wish to borrow Stafford or Direct PLUS loans (if offered), you may need to sign promissory notes. This is a legal document where you promise to repay your loan. You also promise to repay any accrued interest and fees. This is an agreement between you and the U.S. Department of Education. This document explains all of the terms and conditions for your loans.
It is possible to receive more than one loan under a master promissory note. This may be done for up to 10 years. It may help to cover educational costs. The school you plan to attend needs to authorize use of this promissory note. They are likely to communicate eligibility with you in your student aid award letter or other communication.
If something trips you up, you have questions or don’t understand something, call the financial office and ask for help. This office may be able to help with any concerns you may have.