Pursuing a master's degree can present a financial dilemma for many students. They know that in the long run, a graduate degree can boost earning power and make a person more competitive in the job market. In the short term though, graduate school represents a financial burden. This guide can help you see how to manage that short-term burden so you can realize the long-term benefits of having a master's degree.
Financing Your Master's Degree: A Hierarchy of Sources
There are several types of financing for college degrees, so the first step is to prioritize them. The following is a list of types of financing from the least costly to the most costly.
- Grants and scholarships - These awards for educational uses are typically based on academic achievement or financial need and do not need to be repaid.
- Personal savings - Dipping into personal savings to pay for your master's degree is less costly than a loan, but be sure to leave yourself some cash reserve for unexpected expenses.
- Low-interest loans - The government sponsors low-interest loan programs specifically for students. You should always have a plan for repayment before you borrow any money, but low-interest loans can make educational debt more manageable. Many of these loans allow you to defer payment and interest until you graduate.
- Non-student loans - Private loans are likely to carry higher interest costs, so they should only be used to cover costs you can't finance from other sources. Likewise, credit card debt should be used only as a last resort because it usually carries very high interest rates which can add up over time and deferment is unlikely.
Techniques for Financing Your Master's Degree
Now that you know what type of financing you are looking for, how do you find specific programs? Online education guides, the U.S. Department of Education, and individual college financial aid offices can provide more detailed information, but the following is an overview of options you might consider:
Compare On-Campus and Online Master's Programs
The first step in financing your education is shopping around for the most cost-effective way to get your degree. Be sure to consider online master's programs, because online grad schools can be much cheaper than traditional colleges. Also, distance graduate education can save you travel or commuting expenses.
Accumulate Savings and Experience
If you can't afford graduate school right away, look at it as an opportunity to both build up savings and gain some practical experience before pursuing your master's.
Check with Your Employer
If you're considering a degree that's relevant to your occupation, see if your employer can pay for some or all of your tuition.
Apply for Scholarships
If you have a specific school in mind, check with their financial aid office to see what scholarships they have available, especially if you have an outstanding academic record.
If you are a member of a club or other organization, or are a military veteran, research any scholarships or other special financial aid that might be available to you.
Apply for Federal Grants and Loans
Through the U.S. Department of Education, the federal government gives out nearly $100 billion a year in grants, loans, and other financial assistance.
Consider Part-Time Education
If you can't afford full-time tuition, consider pursuing your master's part-time so you can continue to work. Online grad schools can make it easier to fit master's courses around your work schedule.
Another way of working while you earn your master's is through a school work-study program. For graduate students, you may be able to obtain an assistantship or fellowship which allows you to do work relevant to your field of study while earning tuition money.
Look Into the Cost of Bank Loans to Fill In Gaps
Once you've exhausted your other options, you may use bank loans to fill in gaps. However, be aware that this is likely to be the most expensive form of financing, so be sure you can make a realistic budget for how to repay your debt before taking it on.
Online Grad Schools Make Degrees Affordable
If you are pursuing a master's degree to help your career, consider what you expect to earn when you graduate. While a master's degree can significantly boost your earning potential, professionals in some fields can expect to earn much more than others, so consider your return on investment when financing your degree.
Make the most of any grants, scholarships, or employer support you might be able to get, and consider options like distance graduate education that can be more affordable and make it easier to continue working while you get your degree.