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How to Pay for Graduate School

Ana-Marcela Lopez / Abound: Grad School »

It’s no secret that college is expensive. Undergrad or graduate, part time or full, higher ed is going to cost you. The typical costs of a master’s degree range between $30,000 and $120,000, with the average amounting to a little over $66,000. That’s a lot for two years of school, and yet earning an advanced degree is so worthwhile for your development as both a professional and a person.

So what can you do? Thankfully, there are various channels through which you can find a way to pay for grad school. Read on to find out how to finance your degree and achieve your goals.

Sponsorship From Your Employer

From an employer standpoint, it’s usually more cost-efficient to train current employees rather than to fire them and hire new people with more qualifications. That means that you might be able to ask your employer for a little help paying down your tuition; it’s in their interest to invest in your skill development! They could contribute directly, or—thanks to IRS Code Section 127—they can exclude up to $5,250 of your gross income every year and reimburse you for graduate school expenses. This is tax-free too.

Some larger employers have their own programs specifically to further employee education or grant a stipend for doing so. Ask your company’s HR department about sponsorship for graduate school. Some might even fund your entire schooling if you’re lucky!

Every organization will have its own terms for this kind of aid, so make sure you read the fine print carefully. For example, you might have to make a service commitment and promise to stay at the company for a certain length of time. And if you leave before that commitment is over, then you’ll have to repay them for all the tuition they covered. They are, after all,paying for your schooling with the expectation that they can benefit from your development.

Federal Loans

If you did your undergrad in the U.S., then you might be familiar with federal loans, particularly the Free Application for Federal Student Aid (FAFSA). This form assesses your financial situation and provides universities with the information they need to calculate your aid accordingly.

There are two types of aid available through the FAFSA: direct unsubsidized and PLUS loans.

Direct unsubsidized loans are usually the best choice, as they have lower interest rates and fees. In addition, you don’t need a credit check to borrow. The downside, however, is that there are annual and overall borrowing limits, so you likely won’t be able to cover tuition with direct loans alone.

PLUS loans have much higher interest rates and fees, but there are no limits to how much you can borrow. These do, however, require that you get your credit checked. If your credit score is low, then you can have an endorser apply with you to get the funds.

It can be a good idea to get both types of loans, with the majority of your debt under a direct unsubsidized loan.

Private Loans

Some graduate students won’t qualify for federal loans. If that’s your case, you could consider applying for private loans from banks, credit unions, and/or online lenders.

There is no limit on how much you can borrow through private loans, and you are able to extend the terms of your loans for a longer period of time (e.g. gradually over 20 years) in order to pay in smaller, more affordable installments.

If you have a good credit score, then you’ll be able to get lower interest rates. Keep in mind, however, that private loans generally have higher interest rates than federal loans, even if your credit is good.


Grants are another type of federal aid that are essentially disbursements of free money to those in need. Like the loans, federal grants are determined based on your FAFSA, so you have no need to apply for different types of federal aid separately.

There are also additional grants for all types of students and demographics, including those from underrepresented populations and other identities. It might take some work to research grants you’re eligible for, but it’s certainly worth the investment of your time.


Scholarships for grad students are also a form of free money that, unlike grants that are awarded based on need, are awarded based on your academic and/or professional achievements.

Again, it might take a little time to research all available scholarships and apply to the ones that you are eligible for. Whether you apply for a couple of scholarships or so many that you lose count, every little bit helps.

Work-Study Program

The federal Work-Study Program is a job opportunity that is specifically aimed at helping you pay for your degree. Available to both undergraduate and graduate students who need financial aid, your eligibility and wage can be determined by your FAFSA.

Make an appointment with your university’s financial aid office. They can tell you what work-study options are available based on your FAFSA and whether you can get either an hourly or salaried job.

What’s great about the work-study program is you can often find a position that’s related to your field of study. You’ll get experience in your field before you even graduate!

Help From Family

We know that this next option is more often than not an impractical one, but it’s worth mentioning. Check with some of your family members to see if they are in the financial position to be able to loan you some money. Personal loans between family rarely come with interest rates—an extremely generous family member might even pitch in without asking for anything in return.

Tread lightly with this option, and consider the potential consequences of owing money back to a loved one. Financial matters can put a strain on relationships, so don’t ask unless you’re 100% comfortable with the idea.

Pay for Graduate School and Pursue Higher Education

Paying for graduate school can feel like a huge burden. Chances are the amount in your bank account won’t be enough on its own. 

However, by turning to financial aid like grants, scholarships, and private loans, you’ll be able to pursue your dreams of higher education. These investments are all worthwhile commitments that have the great potential of moving up in your career.

If you’re ready to get started on your graduate degree, then check out Abound: Grad School to find a program that inspires you to grow.


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