Graduate School

    The steps needed to pay for graduate school are not a whole lot different than the ones taken to get a bachelor’s degree – fill out the FAFSA form, investigate graduate school scholarship opportunities, fill in gaps with student loans – but there is one significant difference.

    Costs double in grad school … often, in half the time.

    Most graduate school degree programs run for two years as opposed to the four years undergraduate degrees are supposed to take.

    Beyond that, it is difficult to find attractive financial resources like law school scholarships or medical school scholarships, to help pay the bill because grant money is tight at the graduate level and costs are soaring.

    The average tuition charge for a two-year graduate degree program at public universities is $30,000 a year. Tuition for undergraduate degrees is about $8,500 a year. The gap at private schools isn’t as wide — $40,000 per year for grad school tuition vs. $30,000 for undergrads – but it’s two years vs. four years.

    The costs and time requirements for a professional degree in law or medicine are even higher. Law schools require three years with the rate at a Top 25 institution more than $50,000 a year. Med school means four years at somewhere between $35,000 and $55,000 per year, depending on the college.

    The bottom line is that any advanced degree is going to be expensive.

    FAFSA First

    Regardless of what type of financial aid you hope to receive, the first step hasn’t changed since high school: You must fill out the Free Application for Federal Student Aid or FAFSA, as it is universally known.

    FAFSA is a questionnaire that measures your eligibility for financial aid. It must be filled out each year to qualify for any federal assistance. Most colleges and universities now require it before they award any grants, loans or other financial assistance.

    The difference for graduate school students is that you don’t have to include your parent’s financial information anymore.

    Financial Aid for Grad Students vs. Undergraduates

    Graduate school students, by and large, get the short end of the stick on financial aid when compared to what is available to undergraduates.

    For example, 9.2 million undergraduates received Pell Grants in 2014 to help pay expenses. Pell Grants are a federally-funded program that supplied $33.7 billion in “free money” to undergrads.

    Pell Grants aren’t available to graduate school students.

    Loans are available for grad students, but at higher interest rates than undergrads pay. The interest rate on Direct Unsubsidized Loan for graduate school students is 6.21 percent in the 2014-2015 school year, but only 4.66 percent for undergraduates.

    Subsidized Loans – the ones the government pays the interest on while you’re in school – are not available to graduate students.

    Types Of Loans Available

    There are three types of federal loans available for graduate school: Direct Unsubsidized Loan; Direct PLUS Loan; and Federal Perkins Loan Program. Conditions are attached to each one so be sure you understand the differences before accepting one.

    The Direct Unsubsidized Loan is available to all graduate students. The maximum loan amount is $20,500 per year and you do not have to demonstrate need.

    The Direct PLUS Loan requires a credit check, has an interest rate of 7.41 percent for 2014-2015 and also carries a loan fee of 4.292 percent. The maximum amount for Direct PLUS Loans is determined by taking the cost of attendance (as determined by the college) and subtracting the amount of financial aid you receive from other sources.

    For example, if the school determines the cost of attendance to be $50,000 for one school year and you receive a Direct Unsubsidized Loan for $20,500 and a scholarship worth $5,000, the maximum Direct PLUS Loan you could receive would be $24,500 (50,000 minus 20,500 minus 5,000 = 24,500).

    Perkins Loans are available to graduate students with an exceptional financial need, but not every college participates. The maximum available to graduate students is $8,000 a year and a total of $60,000, which includes any amounts borrowed as an undergraduate.

    Private loans also are available from certain banks, credit unions and lending institutions, but typically come at a higher interest rate and with fewer repayment options.

    Grants And Scholarships

    As mentioned, grants and scholarships – “free money” – exists, but it is highly competitive and the awards usually cover just a small portion of the cost of graduate school.

    The College Board Trends in Student Aid says that colleges awarded $10.2 billion in grants to grad students in 2013-2014 and employers added another $5.2 billion.

    Pell Grants are not available to graduate school students. In fact, federal funding for graduate school grants was only $1.8 billion and most of that was disbursed to veterans using the Post-9/11 GI Bill.

    Law Schools

    The American Bar Association is one of several law-related organizations that offer scholarships to law school students. The ABA hands out 20 scholarships a year, worth $5,000 at ABA approved schools. There are hundreds of organizations that offer ethnic and gender specific grants, most of which will cover a small portion of the cost, somewhere in the $1,000 to $5,000 range. Even the Miss America pageant has a scholarship available for a girl who participates in a local, state or national competition.

    Most scholarship money, however, is awarded by the law school itself, using information from the FAFSA form or from its own family income questionnaire. If you have been accepted at a law school, the best advice is to contact their financial aid office to find out how much help you qualify to receive.

    Medical Schools

    In 2013–2014, annual tuition and fees at public medical schools averaged approximately $31,783 for state residents and $55,294 for non-residents. At private schools, tuition and fees averaged $52,093 for residents and $50,476 for non-resident students. Those figures are for tuition and fees. They do not include housing, food or other living expenses.

    Grants and scholarships are available for specific areas, especially general practice and those willing to practice in small, remote areas of the country. There also are plenty of scholarship opportunities for minority students, with awards usually ranging from $1,000 to $10,000 per year.

    Veterinary Schools

    There are only 30 colleges of Veterinary Medicine in the United States that graduate about 2,900 students per year. The average tuition is $18,000 for in-state students and $38,000 for out-of-state students. The average debt for those graduating from Vet School is $151,000.

    Most of the scholarships available are offered by companies with pet-related products or services and organizations with interests in specific breeds of animals. The American Kennel Club, the American Veterinary Medical Association and the Thoroughbred Scholarship are typical of the groups that award scholarships. The awards vary, but most are in the $1,000 to $10,000 range.

    Dental School

    The National Health Service Corps has a very generous scholarship offer that includes tuition, fees, other educational costs and a living stipend in return for working two years at an approved facility in a medically underserved area.  The Army, Air Force and Navy offer a similar scholarship in return for one year of active duty for each year participating in the program.

    Several states offer scholarship and/or loan forgiveness programs with sizeable awards – $10,000 to over $100,000 – for those willing to serve in outlying areas. There are 65 dental schools and cost will range from $85,000 to as much as $125,000.

    MBA

    Students pursuing an MBA make up 16 percent of the 1.7 million people enrolled in graduate schools, the second largest segment behind Education (19 percent), according to the Council of Graduate Schools.  Funding the two years of tuition, fees, housing, food, etc., could cost as much as $150,000, but the website Poets and Quants, claims that if you attend one of the Top 25 business schools, there is $232.7 million a year in scholarship money available.

    If you’re not planning on going to a Top 25 school, it could still pay to consult the financial aid office. Most colleges have scholarship money available for MBA candidates, but the amounts seldom make much of a dent in the overall cost. The best way to pay for an MBA is to have a job and convince your employer to pick up the tab

    PhD

    Doctoral candidates represent the most exclusive group of post-graduate students and the one with the most trouble finding grant money to help with expenses. The 52,760 people awarded doctorates in 2013 was a one-year record and nearly all the grant money available for their programs is supplied by businesses, organizations and colleges to expand research in very specific areas that will most benefit those groups.

    For example, the Department of Veterans Affairs offers grants to study psychology, women’s health, rehabilitation and social work with vets. The American College of Sports Medicine has grants for research to find practical applications for exercise science and sports medicine.

    Bill Fay

    Bill Fay is a journalism veteran with a nearly four-decade career in reporting and writing for daily newspapers, magazines and public officials. His focus at Debt.org is on frugal living, veterans' finances, retirement and tax advice. Bill can be reached at bfay@debt.org.

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