The idea that one can successfully advance to the highest levels of his or her industry without a master’s degree is a dated notion in this day and age. Most working professionals quickly realize the critical importance of holding a master’s degree after spending a few years on the job after college.
Most professionals can see the long-term practicality and financial benefit of investing in post-graduate education, but for many, the price tag attached to a post-graduate degree can be a significant obstacle. While there are greater funding opportunities available for undergraduates, financial aid options for graduate students do exist, and exploring them is highly worth your while.
Financial Options for Post-Graduates
Fewer than 20 percent of students applying for their master’s degrees are eligible for academic scholarship money, and less than 4 percent receive federal and state grants. However, those looking to pursue a master’s degree still have promising aid options.
While subsidized grants, such as the Pell Grants, are unavailable to post-graduate students, there are federal funding options. It’s worthwhile to explore every possible avenue for federal funding before resorting to private loans that can carry interest rates in excess of 8 percent. Such rates can prove financially crippling after graduates are out in the working world, even in a highly lucrative position. Additionally, graduate students tend to have less flexibility in terms of their repayment options.
The biggest difference between graduate and post-graduate loans is the availability of subsidy. Undergraduate loans tend to be subsidized; meaning eligibility is determined based on demonstrated financial need. With a subsidized loan, the federal government pays the interest for a portion of the period that you're in school, during the post-graduation grace period and any time when it might be necessary to defer your loan payment.
In contrast, unsubsidized loans don't require any proof of financial need, but also don't include any government support. This means you're responsible for paying everything back (including interest) and that interest accrues during the six-month grace period before the first loan payment is due. Unsubsidized loans — sometimes called Unsubsidized Stafford loans — are low-cost, fixed-rate loans. Repayment options for these loans include consolidation and other repayment plans offered by the U.S. Department of Education.
Unsubsidized loans also include a six-month grace period and have more flexible options for repayment. Graduate students should maximize any federal unsubsidized loan options before pursuing funding with Grad PLUS loans. Grad PLUS loans are a popular federal student aid option available to students pursuing post-graduate education. These loans can cover up to the full cost of study (including tuition, books, and supplies) and offer a fixed interest rate and higher loan limits than typical undergraduate loans.
Grad PLUS loans are awarded based on your credit history and don’t require a cosigner unless you have poor credit. These loans may be deferred as long as you're enrolled on at least a part-time basis at an accredited school. While it may be tempting for you to borrow the full cost of school tuition and living expenses through Grad PLUS loans, you might face a high payback burden following graduation.
Beyond Federal Loans
Outside of federal loans, there are grants and scholarships available as well, catering mostly to three types of students. Students pursuing post-graduate study in the STEM fields — science, technology, engineering, and math — will find significant opportunities for financial assistance, as both the federal government and many companies and industries seek to increase the number of qualified graduates in these disciplines. For example, the U.S. Department of Defense SMART scholarship includes full tuition and an annual stipend to students in STEM who are also willing to work for the DOD upon graduation.
Employer-Based Tuition Benefits
One of the best and most reliable sources of financial aid for graduate students comes from employers. Many are committed to the professional development of their employees, and currently half of all employed Americans work at companies that provide tuition benefits.
Even companies without official educational benefits packages will write off the cost of any additional education their employees pursue if it related to their jobs. A simple one-page description of the proposed education plan is sufficient for accessing approximately $5,250 afforded in tax-free worker benefits each year under Section 127 of the Internal Revenue Code.
Financial Aid for Degrees Online
These advantages are available for students pursuing degrees online as well. A degree online is the most practical means of earning a master’s degree for many people, particularly those who are balancing their education with work and family life. Many online universities offer financial relief packages.
The federal government no longer factors in the way classes are delivered, so credits earned online qualify for the same financial aid as on-campus courses, provided the university is properly accredited. Although opportunities like work-study are unlikely to be available to online students, some universities offer tuition reduction to those who can demonstrate need.
The Value of a Master's Degree
The reasons for pursuing a postgraduate degree are largely financial. According to 2014 data from the U.S. Department of Labor, employees with advanced degrees earn up to 25 percent more than their colleagues who simply hold bachelor's degrees.
Education is about more than increasing earning power, however. It broadens horizons and contributes to the quality of life. Considering the wealth of financial opportunities available, the work toward earning a master’s degree is well worth the investment.
References
How to Get Financial Aid for Graduate School
Go Grad: Paying for Your PHD
Graduate School Financial Aid vs. Undergraduate Financial Aid
Federal Student Aid
Financial Aid Processes
Best Masters Degrees
A Breakdown of College Education Costs
Forbes: Grad School: Still Worth the Money?
Journal of Accountancy: Employer-Provided Education Benefits
