Economista: How to Pay for Grad School

A money guide for 20-somethings

It seems like almost everyone I graduated with is quitting the workforce to attend graduate school, or they’re at least contemplating the decision. I must admit, I’ve thought about attending grad school as well but the hefty price tag has me seeing red (as in “in the red” aka broke). While some students are fortunate enough to attend grad school for free through various programs, others are not so lucky.  For the countless other 20-somethings out there considering grad school, here are some ways to trim down costs, if not attend for free.

Early withdrawals from your IRA: Tapping into your IRA can be one way grad school students can defray the costs of student loans or overextending their bank accounts. While it’s ideal to start saving for retirement early, that can be difficult to do with thousands of dollars in student loan debt. You can withdraw from your IRA for education costs without the 10% penalty. There is a chance you will still owe federal income tax. For more, visit IRS.gov and read Notice 97-60, Using IRA Withdrawals to Pay Higher Education Expenses.

Graduate Teaching Assistant Programs: While it’s not as easy to become a teaching assistant as it might seem, those who are fortunate enough to become one can shave off thousands of dollars from their education expenses. Some universities require a minimum number of graduate credits while others require that students already have a master’s degree. Teacher’s assistants can make between $20 and $40 an hour, not including overtime. Check out debtfreescholar.com for more on how to become a graduate teaching assistant.

Grants: Ah grants, fellowships, and scholarships–the elusive and highly sought after financing for many potential grad school students. Take the time to search grant and fellowship programs by industry and field. Gradschool.com lists a number of federally funded and independent fellowships. Kiplinger’s, a magazine focused on education issues, suggests that students should contact each department at the school they’re considering and ask how much money is available and how it’s allocated.  Since graduate programs give each department a pool of money to disperse, this will give you a better sense of how much aid and grant money you could receive.

Finally, you may want to consider returning to your alma mater, where you may be eligible for a discount. Check with your school to see if this option is available.

ACROSS THE WEB
  • http://nesheaholic.com LaNeshe

    Great tips! I’ve contemplated grad school, but money (or lack-there-of) definitely stands in the way.

  • Veronica

    I decided to go back to graduate school and now I am only 2 semesters from graduating. I believe its a great investment considering I want to work in either education or public health. Both of these careers offer student loan payback assistance. I highly reccomend other professionals to take advantage of going to grad school it will pay off in the long run.

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  • Shay85

    The article didnt mention anything about working for company’s that offers tuition reimbursement as a part of the benefits package to employees. Thats what Im currently taking advantage of to cover my tuition costs for grad school. Scholarships and grants are not guaranteed, and even if you are rewarded these, its also no guarantee that they will cover the full cost fo tuition. And who wants to borrow from their IRA? I sure dont! I have a friend who is currently doing the Graduate Assistant program and it seems to be working out fine for her. Of all the options listed below, that seems to be the smartest, with scholarships and grants coming in second. Im surprised BE would even suggest taking money from your IRA.

    • Renita Burns

      Hi Shay,
      I purposely did not include finding an employer to pay for grad school because it was one of the more obvious means of paying for school and I wanted to include more alternative ways such as industry specific grants, scholarships and more specific information and resources on becoming a TA.

      When it comes to withdrawing from the IRA, that is the alternative to drowning yourself in student loan debt. Nationally, the total amount owed in student loan debt is $829.785 billion outpacing even credit card debt http://www.huffingtonpost.com/2010/08/09/student-loan-debt-outpace_n_676044.html. When considering drawing from your IRA people should consider the amount of the student loan and its interest vs. the interest you’re getting on the investments in your IRA. If your student loan interest exceed that of your IRA and you have tens of thousands in student loan debt, withdrawing from your IRA is really something to consider. Also, keep in mind, Grad school is an investment as well.

      While grants and scholarships are not guaranteed, looking at industry specific grants as shown on Gradschool.com is a good way to increase your odds of recieving a grant.

      Thank you for your feedback, Shay.

  • Asia

    This is a great article. I think these are great tips. I took the employer based tuition remission route. I currently work for a univeristy that offers 100% tuition remission to faculty and staff members for undergrad and graduate school (masters & doctoral). Its a great perk! I’m in grad school and I love the fact that I only pay for books. I recommend this route if you dont mind working in a campus environment. I know I love it! Another great part of the tuition remission is that I can attend about 11 universities in the state school system I work for.
    If you want to save tons of money…Work for an organization that pays for school! :)