How To Pay for Grad School: 5 Strategies

Employees with advanced degrees tend to earn more. As of 2021, the median earnings for people who obtained a master’s degree or higher were 21% more than those of people with only a bachelor’s degree, according to data from the National Center for Education Statistics (NCES). 

Here are few helpful strategies to pay for grad school before you resort to student loans. 

1. Apply for merit-based aid 

One of the first places to look if you want to pay for higher education costs is merit-based aid. Through merit-based aid, you can receive financial assistance based on specific skills, talents, and abilities. Some common merit-based options include scholarships and fellowships. 

Graduate scholarships

You can look for merit-based scholarships from your college and other organizations. Merit-based scholarships are typically granted to students who excel in specific areas, including academics, athletics, visual or performing arts, and more. Your school may select you for a merit-based scholarship. In other cases, you may need to submit an application or be nominated. 

You can search Scholarships.com to find scholarships based on your grades, athletic or artistic abilities, or certain groups you identify with. For example, some merit-based scholarships are designed for specific students based on gender, racial identity, or disability status. Here are a few examples: 

• American Speech-Language Hearing Foundation: Full-time graduate students enrolled in a communication sciences and disorders program can receive up to $5,000 in funding through this program. 
• Walters Byers Graduate Scholarship: If you were an undergraduate student athlete who demonstrated academic excellence, you might be able to receive up to $24,000 in funding for your graduate studies through this program. 
• American Indian Education Fund Scholarship: Graduate students of American Indian, Alaskan Native, or Native Hawaiian descent are eligible for up to $2,000 in scholarship funding. 
• ASID Legacy Scholarship for Graduate Students: Students enrolled in a graduate-level interior design program can receive up to $4,000 in funding.  

Graduate fellowships

Your graduate school may also offer merit-based fellowships. These are financial awards that help you cover costs so you can focus your time on your studies. 

Typically, your school identifies students for fellowships based on academic rigor. You can usually find these funding opportunities on your college’s website or by contacting your program chair or a financial aid advisor. There are also external fellowships available that come from private organizations or government agencies. 

Fellowships can help you pay for qualified education expenses like tuition and health coverage, and may even come with a stipend. How much money you’re awarded and the duration of the fellowship can vary. 

Related: How to pay for college: 6 strategies 

2. Apply for need-based aid

If you’re figuring out how to pay for grad school but have a relatively low income, you may qualify for need-based aid. This is a type of monetary award that requires you to demonstrate financial need in order to qualify.

There are different types of need-based aid that low-income grad students may be eligible for: 

Grants

If you meet the eligibility requirements, you may qualify for grants, a type of gift aid. Gift aid is a form of aid that doesn’t require repayment. Grants can be great contributions that help offset your higher education costs and make it easier to pay for college. 

In 2022-23, grad students received an average of $10,320 in grants from all of the following sources:

• Federal grants: While federal grants are typically reserved for undergraduate students, graduate students pursuing a career in teaching may qualify for a Teacher Education Assistance for College and Higher Education (TEACH) Grant if they agree to serve at least four years in a high-need field at a low-income school or educational agency.
• State grants: Many states offer grants to graduate students who are residents or who attend grad school in the state. Check with your state’s education department to see what type of grants are offered in your area. 
• Institutional grants: Departments within a university usually have their own grants for students who demonstrate financial need or are pursuing research in specific fields. Contact your school's financial aid office to find out more. 

Work-study

As part of your federal student aid package, you may qualify for the federal work-study program if you demonstrate financial need. Under this program, graduate students can gain part-time employment in on-campus or off-campus jobs to earn funds to help pay for their education. 

Keep in mind that federal work-study funds are limited. Be sure to complete the FAFSA as early as possible if you're interested in a federal work-study job. 

3. Explore graduate assistantships 

Grad school can be costly, but graduate assistantships can be a great way to support your educational funding. Assistantships offer graduate students part-time employment opportunities that are integrated with your studies. These positions are usually offered by universities and they’re often related to your field of study. 

Graduate students may qualify for:

• Research assistantships: These opportunities are available to graduate students who can support a faculty member at their university with research. In exchange, you can earn a salary. 
• Teaching assistantships: Another option is a teaching assistantship. Being a TA may mean teaching undergraduate classes and doing administrative tasks like grading papers, in exchange for a salary or a potential tuition discount. 

Through either of these opportunities, graduate students can earn money to pay for college while gaining valuable academic and teaching experience. 

4. Get help from your employer

If you’re already employed, check to see if your employer offers tuition reimbursement as an employee benefit. Through tuition reimbursement, your employer may cover higher education costs up to a specific limit. Generally, your field of study must be related to your employment.

One of the tax benefits is that these funds won’t be included as income on your federal income tax if the amount is up to $5,250 for the year, according to the IRS. Beyond that amount, you’ll be responsible for taxes.

In 2023, 48% of employers offered tuition assistance, according to the Society for Human Resource Management (SHRM) Employee Benefits Survey. 

5. Use student loans

Despite your best efforts to fund your graduate education, sometimes your finances may still fall short. In that case, you can consider student loans as a final option. There are two types of student loans, and federal options should be considered first because of their low costs and fees, as well as their borrower benefits. 

• Federal student loans: These loans from the U.S. Department of Education can help pay for grad school. To qualify, you must submit the FAFSA. Federal loans have fixed rates and many benefits available to borrowers, like a range of student loan repayment options and even the potential for student loan forgiveness. Keep in mind that grad PLUS loans do have the highest interest rates among federal loans. 
• Private student loans: When federal loans don’t quite cover everything, private student loans can help fill in the gap. Private loans should be a last resort. While they can help provide additional funding, benefits are limited and repayment isn’t as flexible.

If you do need to borrow money to pay for grad school, keep in mind that you may be able to qualify for a student loan interest tax deduction of up to $2,500. 

Figuring out how to pay for grad school can be stressful, but having a plan can ease the burden. By taking advantage of available scholarships, grants, and other opportunities, you can help cover your graduate educational expenses. If you still need funding after exhausting all these options, consider student loans to help bridge the gap. 

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