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How to Pay for Grad School: 5 Strategies for Students
When paying for grad school, take advantage of money you don’t have to repay before turning to loans.
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Ryan Lane Assigning Editor | Small business, student loans
Ryan Lane is an editor on NerdWallet’s small-business team. He joined NerdWallet in 2019 as a student loans writer, serving as an authority on that topic after spending more than a decade at student loan guarantor American Student Assistance. In that role, Ryan co-authored the Student Loan Ranger blog in partnership with U.S. News & World Report, as well as wrote and edited content about education financing and financial literacy for multiple online properties, e-courses and more. Ryan also previously oversaw the production of life science journals as a managing editor for publisher Cell Press. Ryan is located in Rochester, New York.
Des Toups Lead Assigning Editor | Student loans, repaying college debt, paying for college
Des Toups was a lead assigning editor who supported the student loans and auto loans teams. He had decades of experience in personal finance journalism, exploring everything from car insurance to bankruptcy to couponing to side hustles.
Trea Branch Lead Writer | Student loan refinancing
Trea S. Branch is a former NerdWallet writer focused on student loan refinancing. She holds a degree in economics from the University of Michigan and a degree in business from the University of Notre Dame. Trea shared her own student loan payoff journey through a blog, which turned into a personal finance coaching business. Her goal has been to empower anyone overwhelmed by student debt.
If you're considering going back to school, you’re already a step ahead in understanding the cost and figuring out how to pay for graduate school.
The average cost of tuition and fees for grad students at public and private institutions is $12,394 and $26,621, respectively, according to data from the National Center for Education Statistics for the 2020-2021 academic year. But the cost of graduate school can vary by school and by the type of degree.
For example, a master’s of education at the University of Michigan will cost a resident $13,362 in tuition and fees each year. A master’s of business administration at Harvard Business School will cost a resident $81, 374 in tuition and fees each year.
Given the sheer cost of grad school, you may need to finance your education with graduate student loans. But before taking on debt, use these strategies to reduce how much you borrow.
NerdWallet ratingNerdWallet's ratings are determined by our editorial team. The scoring formula for student loan products takes into account more than 50 data points across multiple categories, including repayment options, customer service, lender transparency, loan eligibility and underwriting criteria.
Fixed APR
3.59-17.99%
College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community 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 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. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation. (2)As certified by your school and less any other financial aid you might receive. Minimum $1,000. (3)This informational repayment example uses typical loan terms for a freshman borrower who selects the Flat Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.78% fixed Annual Percentage Rate (“APR”): 54 monthly payments of $25 while in school, followed by 96 monthly payments of $176.21 while in the repayment period, for a total amount of payments of $18,266.38. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. Information advertised valid as of 11/1/2024. Variable interest rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of the Flat Repayment Option with the shortest available loan term.
Variable APR
5.34-17.99%
College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community 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 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. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation. (2)As certified by your school and less any other financial aid you might receive. Minimum $1,000. (3)This informational repayment example uses typical loan terms for a freshman borrower who selects the Flat Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.78% fixed Annual Percentage Rate (“APR”): 54 monthly payments of $25 while in school, followed by 96 monthly payments of $176.21 while in the repayment period, for a total amount of payments of $18,266.38. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. Information advertised valid as of 11/1/2024. Variable interest rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of the Flat Repayment Option with the shortest available loan term.
NerdWallet ratingNerdWallet's ratings are determined by our editorial team. The scoring formula for student loan products takes into account more than 50 data points across multiple categories, including repayment options, customer service, lender transparency, loan eligibility and underwriting criteria.
Fixed APR
3.49-15.49%
Lowest rates shown include the auto debit. Advertised APRs for undergraduate students assume a $10,000 loan to a student who attends school for 4 years and has no prior Sallie Mae-serviced loans. Interest rates for variable rate loans may increase or decrease over the life of the loan based on changes to the 30-day Average Secured Overnight Financing Rate (SOFR) rounded up to the nearest one-eighth of one percent. Advertised variable rates are the starting range of rates and may vary outside of that range over the life of the loan. Interest is charged starting when funds are sent to the school. With the Fixed and Deferred Repayment Options, the interest rate is higher than with the Interest Repayment Option and Unpaid Interest is added to the loan’s Current Principal at the end of the grace/separation period. To receive a 0.25 percentage point interest rate discount, the borrower or cosigner must enroll in auto debit through Sallie Mae. The discount applies only during active repayment for as long as the Current Amount Due or Designated Amount is successfully withdrawn from the authorized bank account each month. It may be suspended during forbearance or deferment. Advertised APRs are valid as of 10/25/2024. Loan amounts: For applications submitted directly to Sallie Mae, loan amount cannot exceed the cost of attendance less financial aid received, as certified by the school. Applications submitted to Sallie Mae through a partner website will be subject to a lower maximum loan request amount. Miscellaneous personal expenses (such as a laptop) may be included in the cost of attendance for students enrolled at least half-time. Examples of typical costs for a $10,000 Smart Option Student Loan with the most common fixed rate, fixed repayment option, 6-month separation period, and two disbursements: For a borrower with no prior loans and a 4-year in-school period, it works out to a 10.28% fixed APR, 51 payments of $25.00, 119 payments of $182.67 and one payment of $121.71, for a Total Loan Cost of $23,134.44. For a borrower with $20,000 in prior loans and a 2-year in-school period, it works out to a 10.78% fixed APR, 27 payments of $25.00, 179 payments of $132.53 and one payment of $40.35 for a total loan cost of $24,438.22. Loans that are subject to a $50 minimum principal and interest payment amount may receive a loan term that is less than 10 years. A variable APR may increase over the life of the loan. A fixed APR will not.
Variable APR
5.04-15.21%
Lowest rates shown include the auto debit. Advertised APRs for undergraduate students assume a $10,000 loan to a student who attends school for 4 years and has no prior Sallie Mae-serviced loans. Interest rates for variable rate loans may increase or decrease over the life of the loan based on changes to the 30-day Average Secured Overnight Financing Rate (SOFR) rounded up to the nearest one-eighth of one percent. Advertised variable rates are the starting range of rates and may vary outside of that range over the life of the loan. Interest is charged starting when funds are sent to the school. With the Fixed and Deferred Repayment Options, the interest rate is higher than with the Interest Repayment Option and Unpaid Interest is added to the loan’s Current Principal at the end of the grace/separation period. To receive a 0.25 percentage point interest rate discount, the borrower or cosigner must enroll in auto debit through Sallie Mae. The discount applies only during active repayment for as long as the Current Amount Due or Designated Amount is successfully withdrawn from the authorized bank account each month. It may be suspended during forbearance or deferment. Advertised APRs are valid as of 10/25/2024. Loan amounts: For applications submitted directly to Sallie Mae, loan amount cannot exceed the cost of attendance less financial aid received, as certified by the school. Applications submitted to Sallie Mae through a partner website will be subject to a lower maximum loan request amount. Miscellaneous personal expenses (such as a laptop) may be included in the cost of attendance for students enrolled at least half-time. Examples of typical costs for a $10,000 Smart Option Student Loan with the most common fixed rate, fixed repayment option, 6-month separation period, and two disbursements: For a borrower with no prior loans and a 4-year in-school period, it works out to a 10.28% fixed APR, 51 payments of $25.00, 119 payments of $182.67 and one payment of $121.71, for a Total Loan Cost of $23,134.44. For a borrower with $20,000 in prior loans and a 2-year in-school period, it works out to a 10.78% fixed APR, 27 payments of $25.00, 179 payments of $132.53 and one payment of $40.35 for a total loan cost of $24,438.22. Loans that are subject to a $50 minimum principal and interest payment amount may receive a loan term that is less than 10 years. A variable APR may increase over the life of the loan. A fixed APR will not.
Credible lets you check with multiple student loan lenders to get rates with no impact to your credit score. Visit their website to take the next steps.
1. Apply for scholarships, fellowships and other grants
Many schools and mission-based organizations offer scholarships and fellowships that cover a portion of graduate education costs. This is money you typically don’t have to pay back, so it should be top of your list when figuring out how to pay for grad school.
Scholarships are usually awarded based on merit or achievement. For example:
Southern Illinois University offers a graduate scholarship program that waives one-third of tuition for admitted students who show outstanding academic achievement.
Prospanica, an association of Hispanic MBAs and business professionals, provides graduate scholarships for members with entrepreneurial prowess and a desire to uplift the Hispanic community.
Fellowships are similar to scholarships in that money is awarded to applicants with exemplary achievements. Unlike scholarships, fellowships can require research in return for the reward. For example, the Cosmos Club Foundation, an organization aiming to advance science, literature and the arts and humanities, offers up to $5,000 to cover research expenses for graduate students at Washington D.C.-area universities.
There are also need-based grants offered to students demonstrating financial hardship or pursuing careers in designated high-need fields. The federal government offers the TEACH grant, for example, awarding up to $4,000 for applicants who agree to teach low-income students or in a high-need subject area for at least four years after graduating, among other requirements.
To apply for scholarships, fellowships and need-based grants, start with the Free Application for Federal Student Aid, or FAFSA. You can also check a school’s website to see what they offer. Don’t forget to explore the websites of mission-based organizations that serve your community or align with your values.
Graduate assistantships and the federal work-study program offer two opportunities to work part-time while you obtain your grad degree. Though there is the added challenge of balancing work with your academic responsibilities, these programs are a debt-free way to offset grad school costs.
Assistantships are typically on-campus and involve some level of teaching or research. A work-study can be on- or off-campus, involving work related to your degree, when possible. You’ll be paid a salary or a stipend. The median annual wage of a teaching assistant in 2021 was $38,040, according to the U.S. Bureau of Labor Statistics.
Similarly, you can elect to enroll in a part-time or online graduate program while you work full-time. It will take longer to complete your degree, but you will have consistent income that can cover some of your education expenses.
If you’re open to working while you earn your degree, see if your employer offers tuition assistance.
Employers can provide up to $5,250 tax-free annually to help with college costs. Some may opt to pay more, but without the tax benefits. For example, global consulting firm Deloitte offers full tuition reimbursement to help some employees pay for business school if they spend at least two years working for the firm after graduation.
Though it is less likely to find a company that will completely cover your graduate education, 47% of employers offer some kind of undergraduate or graduate tuition assistance, according to a 2020 survey by the Society for Human Resource Management.
Before you take advantage of employer education benefits, be sure to ask your HR department about any stipulations that come with the funding.
4. Delay enrollment and save
After considering the cost of grad school, you may decide that now is not the time to enroll, and that’s okay. Giving yourself time to save beforehand can significantly reduce the amount that’s covered by student loans.
If you plan to save before you go back to school, try not to put this goal before other priorities like an emergency fund and retirement savings.
Here’s where spending guides can help. Following a common rule of thumb like the 50/30/20 rule can serve as the foundation for your budget. Looking at your take-home pay, see what it looks like to designate 50% to needs, 30% to wants and 20% to savings or debt goals.
For example, an individual living in Columbus, Ohio earning $65,000/year, would have roughly $3,665/month after taxes.This could look like $1,832 for monthly necessities, $1,099 for monthly wants and $733 for monthly savings or debt goals.
View these numbers more as a starting point than a hard and fast rule. Do you need to increase the budget for necessities? Decrease the budget for wants? The idea is to arrive at a plan that you can follow consistently.
It may not be realistic for you to save up your entire grad school tuition beforehand, but depending on how much you’re able to put away and how many years you save, you can really make a dent in your education expenses.
Taking out student loans for grad school is best when used as a last resort. If after exploring the options above, you still need to cover costs, turn to federal student loans first. These loans offer benefits like income-driven repayment plans and loan forgiveness programs that private loans lack.
You can take out up to $20,500 annually in unsubsidized federal loans; subsidized loans for graduate school aren’t available. If that’s not enough to cover your remaining grad school costs, you can take out up to your cost of attendance (minus other aid received) in federal graduate PLUS loans or private loans.
Private loans may make sense if you won’t use federal benefits and have excellent credit — or a co-signer who does. Compare the interest rate you’d qualify for to what PLUS loans offer. Keep in mind that PLUS loans also come with an origination fee that most private lenders don’t charge.You typically don't have to pay student loans during graduate school if you're enrolled at least half-time. But interest will accrue on all graduate student loans, increasing the amount you owe.
