Financial Aid

How Financial Aid Works in Grad School

Federal Loans

Federal student loans brokered by the U.S. Department of Education come with lower interest rates and more forgiving repayment schedules than those offered by private commercial lenders. Graduate students are eligible for three major types of loans from the U.S. Department of Education — unsubsidized Stafford loans, PLUS loans, and Perkins loans. Grad students cannot qualify for subsidized loans or Pell grants — these funds are exclusively reserved for undergraduate students enrolled in a four year university, community college, career or technical school.

Federal Loans Master’s Students Can Apply For

Unsubsidized Stafford

  • Interest and Fees: Interest rates are fixed for the life of the loan, and change yearly. Rates were 5.41% for the 2013-2014 school year. The loan fee was 1.072% for the year.
  • Loan Amount and Limits:
    • Per Year: $20,500
    • Cumulative, undergrad and grad: $138,500
    • Per-year for medical/health students: $40,500
    • Cumulative: $224,000
  • Eligibility: Both undergraduate and graduate students are eligible. These are not need-based loans. Any student enrolled at least half time at an accredited school may take out a loan.
  • Additional Info: Detailed information on the Stafford loan found here, including historical interest rates and fees.

Grad PLUS

  • Interest and Fees: The interest rate for the 2013-2014 school year was 6.41%, with a loan fee of 4.288%
  • Loan Amount and Limits: Up to the total cost of attendance (including books, fees, supplies, transportation, etc) minus any other financial aid received.
  • Eligibility: Graduate students are eligible. PLUS loans are for students who have exhausted their Stafford loan eligibility, any grad student in this situation may take out a loan after passing a credit check and submitting the FAFSA.
  • Additional Info: Detailed information on Grad PLUS loans

Perkins

  • Interest and Fees: The interest rate is 5%
  • Loan Amount and Limits:
    • Per Year: $8,000
    • Cumulative, undergrad and grad: $60,000
  • Eligibility: Both undergraduate and graduate students are eligible. This loan is based on “exceptional” financial need. Only some schools participate in the Federal Perkins Loan Program, so you’ll need to check with your school, since the institutions dispenses funds.
  • Additional Info: Detailed information on the Perkins loan here, as well as links to tips on managing your loans.

All data current as of June 2014.

Private Loans

Lenders and banks, like Wells Fargo, Sallie Mae, and Citizens Bank, offer private loans crafted for graduate students. These loans often advertise low interest rates and flexible repayment plans, and are sometimes designed for a specific type of student, such as a student entering medical school or an MBA program. However, private loans often have higher fees than federal loans, and not all lenders are honest about providing low interest rates. Generally, graduate students should look for loans with an interest rate of LIBOR + 2.0% or lower; more information on choosing a lender and interest rates can be found here.

One of the major differences between graduate and undergraduate private bank loans is that graduate students tend to have more options. Generally, graduate students’ financial situations vary more student to student, meaning more personalized loans should be considered. Furthermore, there is a lower likelihood of needing a cosigner; though, depending on your circumstance this may help to lower your interest rate. Many lenders, as a rule, maintain the same starting interest rates for undergraduate and graduate loans.

Military Aid

Financial aid for graduate school is also available through the military. Aid is very similar to the aid given to military members or veterans seeking an undergraduate education; the Post 9/11 GI Bill covers up to the full cost of graduate tuition. The Yellow Ribbon Program also helps to cover graduate and undergraduate education costs that exceed the basic GI Bill.

Other programs for military students include the:

  • REAP Program
  • SDEAP
  • Hazlewood Act
  • Army, Navy, and Air Force Loan Repayment Program

Research and Teaching Assistantship Opportunities

Another means of supporting your graduate education is to seek a research or teaching assistantship. While many schools prefer for these paid positions go to Ph.D. candidates, it is possible to find TA or RA positions as a master’s student. You simply have to be a little more persuasive in your assistantship application or even choose a school based upon the availability of these positions. Before we review these options though, bear in mind that, due to the remote nature of a fully online program, some of these options may be unavailable. Be sure to consult with your school to see what is possible remotely or, if possible, by commuting to the physical campus sporadically.

In essence, an assistantship is an internship under a professor or department. You act as an assistant in the classroom, lab, or research facility while completing your degree. The vast majority of students with assistantships enroll in half or three-quarters of a course load for the semester or year they serve as a teaching assistants (TAs) or resident assistants (RAs). The amount of time required for the assistantship will range from 10 to 30 hours per week. Participating in these programs may offset or lengthen the total length of your program.

For your help in teaching, researching or analyzing data, the school pays you. Depending on the institution, this may be in the form of a stipend, tuition reduction or hourly wages, and it may be bolstered by benefits like health insurance.

General steps to earning an assistantship:

  1. Check to see how assistantship programs work at your school. In many cases, you’ll need to apply directly to your department as they hire their own TAs and RAs.
  2. Demonstrate a strong academic record and a commitment to your degree and your department. Develop specialties and skills within your program that may uniquely qualify you to assist in specific research or instructional roles.
  3. Discuss the possibility of assistantship openings with professors and department officials you know well. Building a good relationship with these figures is key, because often they can apply to create a position for you under their lead.
  4. If departments do not post TA or RA positions or hire directly, be persistent with your advisor about asking about information on new or upcoming openings.

The length of an assistantship varies by school and department. Some allow students to continue in that position until they complete their degrees, as long as their grades are satisfactory. Other schools provide assistantships for only a semester or year, though students can often re-apply when the assistantship is complete.

Leveraging Your Grad Program Interview for Financial Aid

Beyond applying for loans, grants, and scholarships, keep in mind that entrance to graduate school sometimes involves an interview, which can be a good time to discuss financial aid. If an interview is not required for admissions, it is a good idea to contact the financial aid office to discuss your options. Without demanding money or appearing unfriendly, present your situation honestly and find out what the school may be willing to do for you.

These conversations might occur once during the application process and again after you are accepted. If your dream program offers you a less appealing financial aid package than your second or third choice program, don’t be afraid to notify your first choice school. Graduate schools are well aware of how big a role funding will play in a student’s enrollment decisions. They’re also more accommodating than you might think.

Graduate admissions are highly competitive, getting into a program is already a clear indication that you are considered a qualified candidate — probably one worth investing in.