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Going to Grad School? How Your Financial Aid Will Change

Dec 31, 2010 Jennifer Williamson, Distance Columnist | 1 Comments

Graduate school is expensive—sometimes as expensive as undergraduate degree programs. You’ll find that a lot of things change between undergrad and graduate programs, however—including your financial aid landscape. Here’s an overview of your financial aid options as a graduate student—and what changes to expect from your undergraduate program.

Congratulations—you’re now an independent

As an undergraduate student, it’s not easy to get an “independent” status on your financial aid. If you do succeed, your parents’ income won’t be counted toward your eligibility for federal financial aid—which can be a boon to students. But when you’re a graduate student, you’re usually considered an independent for financial aid purposes—which could mean access to more federal financial aid.

You can’t get some federal aid

That said, some federal financial aid  is only available to undergraduate students. Pell grants, the most ideal form of financial aid, are the most prominent example of this. Federal Supplemental Educational Opportunity Grants are also only available to undergraduates. You can still get subsidized or unsubsidized Stafford loans. Instead of Parent PLUS loans, which are available to parents of undergraduate students, you can take out a graduate PLUS loan with similar terms. PLUS loan holders in graduate school get automatic deferments while they earn their degree.

Grad Students With Cash

As a graduate student, the financial aid landscape is slightly different—but those differences may work in your favor. 

Some federal aid is more generous

Federal Perkins loans allow students to borrow at a low interest rate—currently 5%—on a needs-based basis. The limit for federal Perkins loans is $4,000 for undergraduate students, but graduate students can borrow up to $6,000.

You can still get private loans

Many students take out private loans to cover gaps between their federal and school-based aid and the full cost of tuition. Private loans have been more difficult to get recently than in past years for everyone, including both graduate and undergraduate students. As a graduate student, you’ll be borrowing without your parents’ credit history—which may help or hurt you, depending on your own financial situation and that of your parents.

You can still get federal work-study aid—if you qualify

Federal work-study aid is given on a need-based basis, and graduate students are allowed to apply. Your school has considerable latitude in determining how much work-study aid students can earn, and work-study jobs are given on a needs-based basis. You’ll likely be competing with undergraduate students at your school, but different assessment rates and allowances are given to independent and dependent students—so you may or may not have a better chance.

You’re more likely to have a job—which means possible employer aid

Some graduate students are non-traditional students who also work full-time. If this describes you, you may be able to get tuition assistance from your employer. It’s also possible to get this kind of tuition assistance as an undergraduate student, but graduate students are older and more likely to have jobs that might provide tuition assistance than incoming undergraduates.

Assistantships and fellowships are your best bet

Many schools offer teaching assistantships and research fellowships to graduate students, and this can be a huge benefit to the student. Full tuition awards along with a stipend for room and board are not unheard-of, although competition for these awards can be fierce at some schools and departments. These awards are often merit-based, not needs-based. You’ll have to work for your stipend, of course—but often it’s work in your field of research or study, rather than a federal work-study job that may or may not relate to your studies. In addition, research fellowships and assistantships can prepare you for a career in academia if that is your goal.

As a graduate student, the financial aid landscape is slightly different—but those differences may work in your favor. If you’re able to get a merit-based fellowship or assistantship, you could see a significant portion of your tuition paid for—if not all. But not every graduate student is that lucky. Still, you can also get a mix of federal and private loans, and the fact that your status is now independent may work in your favor. Be sure to talk to a financial aid counselor at your school to assess all your options—and get the best deal possible.


systerwoody Over a year ago

This article was really helpful for knowing what to expect about FINAID. Recently, I applied for a Ph.D. in Higher Ed. Admin. at 3 Universities: Fielding U in Southern California; University of Nebraska at Lincoln, & Illinois State University. They are among the few offering a Ph.D online, with a minimal residency requirement, which is suitable because I work full time at a state university. Winning that Kindle Fire would be the tool need as I move forward to being accepted. Either way I WIN! ^_^

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