The Financing A Graduate School Education

Did you go straight into the workforce right after throwing your undergraduate mortarboard in the air? If so, it's likely that many of your coworkers with graduate degrees make a lot more money than you do. According to the latest U.S. Census, workers with advanced degrees earn about $25,000 more annually than those who have only an undergrad diploma.

Never fear, for you can afford to close that earnings gap. There are many ways to finance grad school studies, even after taking a break for a few years.

Ask for help

The best option, of course, is a full-ride scholarship, fellowship, or academic grant. Talk to your school's financial aid department, the graduate department that you intend to enter, and any professional organizations in your chosen field. There are also plenty of online search tools for free scholarship money.

Whatever you do, don't forget to fill out the Free Application for Federal Student Aid (FAFSA) form. This will be used to determine your eligibility for almost every kind of financial aid, starting with scholarships and grants. And if your own savings and "free ride" money won't cover your costs, it's also the basis for your student loan application.

Good debt

While debt of any kind is never a great idea, federal student loans are some of the least onerous debt instruments you'll ever see. Need-based Perkins loans come with a fixed annual interest rate of just 5 percent, no loan fees, and very generous repayment terms. The first payment is due nine months after graduation.

The grace period on Stafford loans is six months, and the interest rate is currently fixed at 6.8 percent. There are also origination and default fees on these loans, currently up to 2.5 percent of the loan amount. These plans come in two flavors: subsidized, a need-based program where interest doesn't start to accrue until your repayments start; and unsubsidized, where you don't have to demonstrate need, but the interest balance starts to rack up when you take the first disbursement.

There are also special Grad PLUS loans, just for graduate students, in case you max out your Perkins and Stafford eligibility. To gain it, you need a clean credit history, and the origination fee is often as high as 3 percent. Once again, the interest rate is higher, but still probably more affordable than drawing cash from your home equity or taking an unsecured private loan. And if you qualify for a Grad PLUS loan, it will cover whatever tuition, supplies, room and board, and travel expenses your other financial aid packages don't.

Invest in your future

Grad school can be expensive, but you'll earn that money back in no time with the higher salaries an advanced degree commands. And that's not all: you get to satisfy your curiosity and intellectual goals, boosting your confidence and self-worth. Be all that you can be-but not necessarily in the army.


Financing A Graduate School Education
By: Anders Bylund
http://www.mortgageloan.com/financing-a-graduate-school-education-1871