Paying for Graduate School

Paying for Graduate School

Are you considering going back to graduate school? Money is an issue, isn’t it? Most returning students have to factor both the upfront costs and the long-term payoff when determining whether to commit the time and effort to a graduate program.

One issue facing individuals seeking post-graduate education is determining the real net costs of graduate education. To determine the real net costs, students should apply to their desired programs, apply for scholarships, fellowships, and assistantships from each institution, and finally apply for student loans to assist with the remaining costs. It is at this point they can determine the true financial sacrifice they will have to make.

Start Early and File Your FAFSA
Don Griggs is the Director of Financial Assistance and Veterans Affairs at the College of Charleston. He suggests you start the process as early as possible by identifying the schools to which you plan to apply and then file the FAFSA form (Free Application for Federal Student Aid) for the year in which you plan to attend. For the fiscal year 2018-19, the FAFSA will be available on October 1st. The FAFSA is the starting point for federal student loans. The FAFSA is also used to demonstrate financial need for those fellowships/scholarships that include need as one of the eligibility criteria.

Griggs suggests applicants inquire about grants – whether fellowships and scholarships that are awarded without strings attached, or assistantships that require work – for example as teaching assistants — through the program of study at each individual school. Every school has its own process for handling such requests: some use a centralized system for all graduate programs, but most leave the allocation of funds up to each individual program department.

Most grant programs require enrollment on a full-time basis and all student loan programs require that students enroll on at least a half-time basis to be eligible for funding. The number of credit hours necessary for full/half-time status varies by level of graduate program and institutional policy. Students who know up front that they can only enroll part-time should inquire up front about the rules associated with their program of study and the available aid programs. This step is especially important for working professionals.

Negotiate the Best Deal
Once all the paperwork is completed, potential students are well-advised to negotiate aid packages respectfully with the programs to which they are accepted, Griggs says. It’s important to understand the criteria for each kind of aid. For example, it would be futile to claim financial hardship for a merit-based scholarship, or tout academic excellence when requesting income-based aid. “Ask pertinent questions,” he says. “Ask for the school’s employability or placement rate. By law, they have to be able to supply that upon request.”

There are numerous other financial aid resources available across the nation, some of them dependent on the field of study. The SmartStudent Guide to Financial Aid is one of many websites that offer guidance about where to find scholarships and other aid, and how best to apply for them. Fastweb also provides a scholarship search.

Myriad Loan Options – But You Have to Pay Them Back
Then there are a vast array of loans available to graduate students, from federal government loans, state-sponsored loans such as the S. C. Teacher Loan Program, to alternative loans. No matter what kind of loan a student accepts, they are deferring, not offsetting, payment for school. Anyone considering graduate school should do a financial costs-benefit analysis before taking on debt, including a plan for how to repay the loan obligation.

Federal student loans should be considered first over private or alternative loans because usually the interest rates are more favorable, there are more benefits, and loan repayment options are much more flexible.

There are also private loan programs at financial institutions. These are generally the last resort for graduate students because their interest rates are often higher and the terms and benefits less flexible. In addition, there are a variety of tax offsets for graduate students. The interest on most student loans, though means-tested, is tax deductible. The state of South Carolina offers a tax credit for tuition as well.

Ask Your Employer About Tuition Assistance
Many companies that are looking to increase their collective knowledge and skill sets in order to remain competitive will sponsor all or part of an employee’s graduate education through a tuition assistance program. While some employers cover the cost of tuition upfront, most provide reimbursement after the course ends. Ask your employer if they offer a tuition assistance program and determine the terms of this benefit before completing your financial plan for graduate school.

Although the potential cost of a graduate degree can be daunting, you should not let this discourage you from reaching your career goals. Once you have found the right path for financing your education, research shows that you will be well positioned for long-term success. According to the United States Census Bureau, workers in South Carolina with a master’s degree or higher earn a median annual salary of $53,814, versus those with just a bachelor’s degree whose median annual salary is $43,712. With the opportunity to increase your income by 20 percent or more, the cost of a graduate degree can easily be seen as a valuable investment in your future.