Graduate school can open many opportunities for students, but the price and time involved in pursuing a master’s or doctorate can be daunting to many students.
In the past decade, the cost of attending graduate school has climbed by more than 35 percent, increasing somewhat slower than tuition for undergraduate programs, but at a significant pace nonetheless.
About two-thirds of undergraduate students leave college with at least some debt incurred via student loans to pay for their education. The average college student leaves undergraduate studies with at least $23,000 in debt. Graduate students need to borrow even more to cover the costs of their continuing education, as the median debt for graduate degrees is $25,000 for a master’s and about $52,000 for a doctorate and nearly $80,000 for post-doctorate degrees. In general, most students end up borrowing between $30,000 and $120,000 to obtain a graduate degree.
Because of the high costs of graduate degrees, there are a number of loan programs available to help students finance their continuing education. Borrowing wisely is important, as starting a career deeply in debt can be financially stressful, particularly in a tight job market or in a field that is not as remunerative as others.
Before applying for a graduate school loan, you should determine how much money you will need to pay for the cost of tuition, books, fees and living expenses. You may wish to pay for some costs out of pocket during your education to avoid incurring excessive debt.
You’ll also need to think about the degree you’re getting and whether you’ll be able to find a job after completing graduate school that will allow you to repay your loan. While philosophy may interest you, there may not be a way for you to financially justify going $50,000 to $80,000 in debt to obtain a doctorate in the field.
To apply for a graduate school loan, students should fill out the FAFSA, which can help line you up with public and private financial aid, including scholarships and fellowships that may reduce your need to borrow.
You’ll also want to apply for a graduate Stafford loan. These loans don’t take your credit into account, and most students end up qualifying for them. However, they may not cover all the costs of graduate school and other loans may be necessary. You’ll also want to apply for a graduate school PLUS loan.
If possible, students should get a federally-backed graduate school loan, as these loans tend to have lower interest rates and more lenient repayment terms than private loans. Should students be ineligible for federally-backed graduate school loans, or need more funds to supplement federal loans, they should carefully shop a loan among private lenders, choosing only loans that have the most favorable interest rates and flexible repayment terms.
When obtaining a graduate school loan, it’s important for you to understand as much about the loan as possible. Find out how much you can borrow, when disbursements will be made, when repayment will begin, and also inquire into details concerning repayment plans, deferment and forbearance and consolidation. The more you know about your loan, the better you’ll be able to make and execute a repayment plan.
Some fields, such as teaching, offer loan forgiveness programs for students who pursue graduate degrees if the student will agree to some work or career-related task after graduation, such as working in a high-need area.
Once your student loan goes into repayment, you’ll want to be diligent about making monthly payments on time. Defaulting on a student loan can have some serious consequences, including wage garnishment, hits on your credit and other sanctions. By borrowing smart, you can reduce the total amount you need to finance your education and thus reduce your debt burden once you leave school.
When considering taking out a graduate school loan, you should consult with your college or university’s financial aid office. They can help you determine how much you need to borrow and who to borrow it from. If your family has a financial planner, it may also be worthwhile to consult with him or her as well, as they may be able to steer you to a low-interest private loan.
Graduate school loans can make pursuing a graduate degree or professional degree an attainable dream for students. By borrowing responsibly, you can earn your degree with a minimum of financial hardship.