Finishing up your college degree is one of the most rewarding feelings in life. Whether you are a 1st generation graduate or extending the family tradition at an alma mater, every college graduate should feel successful. What's next? Most graduates look to careers but some decide to continue their education by enrolling in graduate school. Most that choose to head to grad school do so based on their chosen profession or for the desire to earn more money over the course of their lifetime. Also, the demand for higher educated employees gives those with a graduate degree 15% higher weekly median earnings and lower unemployment rates than those holding only a bachelor’s degree according to the U.S. Bureau of Labor Statistics. That said, paying for a second degree can be overwhelming with the mountain of debt you are already sitting on. There are, however, options to help pay for some if not all of your graduate degree program.
University Financial Aid
Remember that FAFSA form (Free Application for Federal Student Aid)? The same form is valuable as you financially plan for graduate school. Universities use this form to assess your financial need based on the information you provide. Typically, university aid does not have to be repaid. University aid comes in 3 ways.
Federal Graduate School Loans
Federal aid is the number one source of education financing. Accepting a federal loan means you will have to pay back the amount you borrow at defined terms. Specifically, 3 loan programs are available for graduate students to help cover the costs of going to grad school.
Private loans to fund grad school are an option, but one that should be explored after all other financial aid sources are reviewed. Private education loans are often costlier, with higher fees and interest rates, than Federal loans. Exploring different lenders and choosing a loan term that fits your financial need and repayment options is key.
Financing Grad School with Other Options
The Teacher Education Assistance of College and Higher Education (TEACH) Grant is a program that awards up to $4,000 to students pursuing graduate degree programs in education. This program requires education related coursework and a plan for a future profession in an educational related field to remain eligible for the grant and keep it from turning into a loan.
Pell Grants are available to those in postbaccalaureate teacher certificate programs. This grant is available to students with a demonstrated financial need and like other types of grants does not have to be repaid. Awarding of Pell Grants is based on financial need, but the amounts available can be up to $5,815 if you qualify.
Tax Incentives for Graduate School
Tax programs offer credits on your annual taxes for being a grad school student. The Lifetime Learning Credit, Student Loan Interest Deduction and the Tuition and Fees Deduction provide tax breaks at year end based on your qualified status as a student in grad school. Visit the IRS or consult a financial adviser for more information on how to claim and deduct qualifying higher education expenses on your annual taxes.
Putting it All Together
Graduate School education offers the potential for expanded career opportunities and earning potential, but the costs need to be considered before deciding to continue your education. Researching the career options after graduation (salary and job market) can help you decide if taking on additional education debt is a good decision. Once the decision is made to continue your education by going to grad school, consider these three keys to financing your graduate degree program from start to finish.