When Damien Frierson first considered pursuing a Ph.D., he knew what he wanted to study — social work — and where he wanted to study it — Howard University in the District of Columbia. But…
When Damien Frierson first considered pursuing a Ph.D., he knew what he wanted to study — social work — and where he wanted to study it — Howard University in the District of Columbia. But like many prospective students, he struggled with how to pay for graduate school.
He had already accumulated some debt from earning a bachelor’s and two master’s degrees and didn’t want more, and he faced giving up the $72,000 he earned annually. But getting creative and organized early can make all the difference when it comes to paying for a graduate degree.
Frierson applied anyway, and he discovered something every prospective grad student should know: By applying very early, about three months before the deadline, he put himself on the radar of the social work school, which contacted him about applying separately for a generous fellowship. For three years, the award covered the full cost of Frierson’s tuition and provided a biweekly stipend totaling $18,000 annually in exchange for 15 hours per week of research, teaching or other work.
Many companies looking to boost their collective skill set without hiring will sponsor all or part of an employee’s graduate schooling through tuition reimbursement. In 2017, 50 percent of the more than 3,000 employers responding to a survey by the Society for Human Resource Management offered some form of financial assistance for graduate school.
Most firms require that the coursework have some connection to the employee’s job role — tax courses for an accountant, say, or computer science training for someone working in information technology. And some companies require that the employee work at the firm for a certain period after school or pay back part of the tuition. Up to $5,250 of such tuition assistance qualifies as a tax-free benefit.
Absent a formal tuition remission program, workers can often earn assistance if they demonstrate to the boss how a course of study could add value, says Peter Cappelli, director of the Center for Human Resources at the University of Pennsylvania’s Wharton School. And many universities offer reimbursement programs for their own qualifying workers.
Graduate programs typically award scholarships and fellowships based on merit. These types of financial aid do not need to be repaid in most cases.
“It’s going to vary from school to school and where that particular student sits in that applicant pool,” says Joseph Russo, former director of student financial strategies at the University of Notre Dame in Indiana.
At many schools, aid is given out by academic departments or the specific graduate school instead of a central financial aid office, so students may have to do some digging. A graduate admissions official or someone affiliated with the desired program can help students sort through the options. Experts advise applying for funds as early as possible to ensure access to the full pot.
A range of private and public organizations also offer money for graduate school, though these fellowships are typically highly competitive. The Truman Scholarship Foundation, for instance, annually awards up to $30,000 to each of about 60 prospective grad students looking at public service fields. Both Cornell University and the University of California–Los Angeles provide comprehensive online databases of awards across a range of fields.
Work for the Graduate School
Research and teaching assistantships generally cover at least part of tuition and pay a periodic stipend in exchange for research or classroom instruction. Like scholarships, assistantships are often presented by individual departments.
Being proactive is key; once a student knows the specific topic he or she wants to study, it’s important to zero in on relevant programs and find faculty members in the field who might be willing to take the student on as an assistant. Doctoral students typically have a better shot than master’s candidates, since they’re presumably considering a professorial career.
Chances are students will need to borrow at least part of the tab. To be eligible for federal student loans, the first step is to file the Free Application for Federal Student Aid, known as the FAFSA.
These loans will be factored into a student’s financial aid package, which may include other types of aid. There are a few different options for graduate students seeking federal loans.
Stafford loans pay out up to $20,500 a year. The loans carry a 6.6 percent interest rate and a fee of about 1 percent, and a lifetime maximum of $138,500. All graduate Stafford loans are unsubsidized, so interest accrues during the entire time borrowers are enrolled, though payments aren’t required until six months after graduation. This money can be used to cover tuition and living costs, as well as other education-related expenses.
In addition, Graduate PLUS loans are available at 7.6 percent interest plus about 4 percent in fees.
Private student loans are also an option. Sallie Mae’s fixed loan rates for graduate students range from 6.00 to 10.23 percent, and variable loan rates range from 4.50 to 10.11 percent.
Potential borrowers can get a sense of the total loan tab — and perhaps size it up against an expected starting salary — using a student loan calculator, like the one available at StudentAid.ed.gov. Certain state, federal and school-sponsored repayment programs also offer adjusted rates or loan forgiveness for qualifying graduates pursuing careers in the nonprofit or public interest sectors and certain in-demand fields such as teaching and primary care.
Use Available Credit
Graduate students will also want to see if they qualify for the federal Lifetime Learning Credit, which allows individuals to subtract up to $2,000 annually from their tax bill.
The credit applies to 20 percent of tuition and other required education expenses up to $10,000 or a maximum of $2,000 per return, and is available to single filers whose modified adjusted gross income is $67,000 or less, or to married people whose adjusted gross income falls at or under $134,000.
The bottom line: Students have to be creative, says Geri Rypkema, assistant provost of the Office of Graduate Student Assistantships and Fellowships at George Washington University in the District of Columbia. “Look at all possible sources,” she advises, “because sometimes you have to put it together.”