How to Pay for Graduate School

by Saadiq Mance
Black Financial News.com

Chances are you already know the benefits of a graduate degree and have possibly already made a mental commitment to continue your education. However, money seems to always be the decisive factor that tends to hold one back from taking the final steps to attaining that lucrative graduate degree. This month in Emerging Minds Dollars & Sense we want to help you take your career to the next level by doing some of the financial leg work that is needed to help you figure out how you can pay for grad school.

Fellowships

Fellowships are the absolute best way to finance graduate school. Most fellowships will cover your tuition, books, room, board and pay you a stipend on top of that. Many will cover all of these expenses for a student's full academic career, but some must be renewed each year. Sounds good huh?…real good…and that's why fellowship programs are highly competitive and are designed to attract students with excellent academic records. This is why if your goal is to get a fellowship you need to at least have a 3.0 undergraduate GPA, and be in the highest percentile of graduate exam scores. If your academic record is not so stellar, there is still hope to receive a fellowship. African American and other minority scientist, engineers, computer specialist, and medical professionals are in high demands and low in numbers; so the good thing is that you will have to compete with a smaller field of candidates. Also, if you don't mind going to a less prestigious school, you may be able to receive a fellowship even though you did not hit a home run on your graduate test.

There are two main types of fellowships; Portable fellowships and Institutional fellowships. Portable fellowships are offered by independent donors or organizations and can be used at any university. Institutional fellowships are awarded through specific university programs. The financial aid offices of the schools to which you are applying can give you information on any available Institutional fellowships. In addition, there are several different guides to Portable fellowships and Institutional fellowships that can be found at the public library and on the world wide web.

Scholarships

Scholarships are one of the most common ways for individuals to pay for their graduate education. Typically, in order for you to receive a scholarship to graduate school, you need to qualify on the basis of need, merit, or both. Nine times out of ten, if your goal is to receive a scholarship based on need, your tax returns will be a crucial part of the application process. Consequently, it is very important that you use every legal method in the book to decrease your taxable income the years prior to attending grad school. In addition, the sooner you go to grad school in your career, the better. This is because the longer you work, the higher your income will be and the more you will be expected to pay towards your education.

Receiving a scholarship based on merit is another ball game, but don't assume you must have a 4.0 GPA and max out your graduate exams to qualify. You may qualify for a scholarship based on merit because your parents were born in Haiti, your father served in Vietnam, or because you are left handed. There are hundreds of odd, usually small, merit scholarships available for people for a number of reasons. More often than not, these scholarships are not full scholarships, but range from $100 to $50,000 or more. Keep in mind that the more money the scholarship is worth, the better your credentials will have to be.

Assistantships

Another great way to help ease the cost of graduate school is an assistantship. Many graduate students, especially after they compete their first year in school, have the opportunity to become teachers or research assistants. Through this arrangement, teaching assistants help professors by leading seminar sections, reading papers, and meeting with undergraduates. Research assistants, common in the sciences, oversee laboratories and assist professors on projects. Both arrangements allow students to earn money while gaining experience in their field. Some universities also reduce tuition for students working as assistants and may even offer stipends and/or tuition remission. In some programs, assistantships are awarded to every student; in others they are awarded competitively based on academic performance. Since assistantships differ in each department within a university, you must check with the academic dean of the program you want to attend to find out the qualifications and rewards unique to that school.

Employee Assistance

If you are gainfully employed and your goal is to go to graduate school in order to advance your career or even change careers, don't count out your current employer as your ticket to that prestigious degree. Start by asking your employer if they have any programs to help employees who go back to school. Some will pay at least part of the tuition and as an added benefit, up to $5,250 of employer-paid education benefits won't be considered part of your income (that is, the money's tax free). This benefit was supposed to end after 2001, but has been extended indefinitely and now applies to grad school tuition.

There are two important things to be aware of if you go this route: 1) Usually, your employer will expect you to meet a minimal grade level for each class. If you don't meet this requirement for any class, your employer won't pay for the class and you will have to come up with the money for the course out of your own pocket. 2) Your employer isn't stupid; they are not going to pay for you to go to graduate school without them getting something out of it. Typically, before they will pay for your classes they will have to be in a job related field. Also, most employers will expect you to work for the company a minimal amount of time (usually 1 year) before you are free to leave the company without any obligations. For example, if you get your degree and leave the company either voluntarily or involuntarily before that minimum time is met, they will prorate the cost of the tuition and expect you to pay them back. Make sure you read the fine print before you let your employer pay for your schooling.

Veteran Benefits

If you or your spouse is a veteran, or the dependent of a veteran, veteran's educational benefits may be available as well. First check out the Federal Department of Veternan Affiars, then check with your local Veterans' Affairs office. There are also a number of private fellowship offerings available such as the Fulbright, Mellon, National Research Foundation, and the National Science Foundation, to name a few.

State Aid

Your state higher education agency in your home state will also be able to provide you with information about state aid. They can provide infromation on the State Student Incentive Grant (SSIG) Program, which is funded jointly by individual states and the US Department of Education. You can access a list of the state higher education agencies on the Department of Education's Web site. While Pell Grants and other federal aid programs are available for undergraduate students, they are not an option for graduate school.

Loans

Loans should be your absolute last resort to pay for a graduate education. Many people are stuck paying off student loans their entire life. If you have to go this route, you should consider a loan from the Federal Education Department before you go through a private financer, (http://www.ed.gov/DirectLoan/). The interest rates are usually much lower than what a private company can offer. You can also write off the interest (up to $2,500 a year) on your taxes once you start repaying the loan -- as long as your income doesn't exceed $65,000 (single), $130,000 (joint).

Paying for it yourself

If you have to spend your own money to go back to school, the only benefit is that you can get a tax write-off. You can deduct up to $3,000 of expenses (tuition and fees) that you pay for post-secondary education -- even if you don't itemize, (it doesn't count if the money is used for personal expenses such as room and board). Before you commit to going this route, visit the federal governments comprehensive website (http://www.students.gov/) to help students from everything from finding a school to budgeting your money.