How to Finance Your Master's Degree or Continuing Education

Don’t assume grad school or continuing education is out of reach for your budget. Paying for your post-grad or professional courses can be a challenge, but it’s completely doable. Put a little research, creative problem solving, and our easy tips into the task, and you’ll figure out how to finance your master’s degree or continuing education.

Financing Higher Education

According to Sallie Mae, almost a quarter of school costs are paid by grad students’ earnings or personal savings. If you don’t have that kind of cash flow, though, consider other options for financing higher education.

Start With Free Money

Loans may need to be part of your equation, but it’s best to begin your calculations with financial aid that doesn’t have to be repaid.

An estimated $2.6 billion in financial aid was left on the table in 2018 because students failed to fill out the Free Application for Federal Student Aid (FAFSA) from the U.S. Department of Education. And FAFSA is not just for undergraduates. It can help you land federal aid based on financial need for graduate school, too. The application is free, and there are several free-money options available to you when your FAFSA is complete, such as federal work study programs.

Grants and Fellowships

Federal aid is applicable to some continuing education programs, such as grants for medical residency or the Pell Grant for postbaccalaureate teacher certification, but federal aid in the form of grants does not apply to most graduate programs.

For graduate school, grants and fellowships are almost interchangeable terms, the main difference being what the institution bestowing the funding prefers to call it. There are government-backed grants, from organizations like the National Institutes of Health or the Department of Energy, and fellowships funded by private organizations, such as the Alfred P. Sloan Foundation or the American Economic Association. The best place to begin searching for grants and fellowships is through the websites of the schools you’re considering, in particular the programs you are targeting for grad school. You can also check out online scholarship search tools.

Most grants and fellowships are competitive, so do your homework, complete your applications carefully, and submit early. Preferably, you’ll be ready to hit send on your application the day you learn you’re accepted into your grad school program of choice.

Scholarships

Graduate tuition can cost tens of thousands of dollars each year. Because graduate students are considered independent, you will report your own income on the FAFSA, which could make you eligible for more need-based scholarships. Grad students can check out USF’s STARS Scholarship database to read about USF Foundation Scholarships and many other scholarships to students enrolling in master’s programs. There are millions of dollars available to grad students for national and niche scholarships.

Can you qualify for specific scholarships that take your background, interests, or undergrad degree into account?

• Your heritage: There are scholarships designated just for Hispanic grad students, Native Americans, Korean Americans, Pacific Islanders, and more.
• Your alma mater: You may qualify for a discount if you apply to graduate school where you earned your bachelor’s degree.
• Your area of specialization: Check into field-specific graduate scholarships, such as a master’s in education, women in technology, accounting scholarships, and MBA scholarships.
  
  

Assistantships

Graduate assistantships allow you to work in a support role at a university under the supervision of a faculty member. You may teach, be a research assistant, do clerical tasks, or help with grading. USF graduate assistants earn a stipend and are eligible for tuition payment and some additional benefits, such as health insurance.

Employee Benefits

Under U.S. tax code, employers may offer up to $5,250 per year in tuition reimbursement for college courses, which is deductible for your company and not counted as taxable income for you. More than half of employers are estimated to currently offer tuition assistance. If yours isn’t one of them, make a sales pitch. One possible incentive: Signing a contract to commit to working for the company for a minimum term after receiving your graduate degree.

College Savings Account

If you didn’t run through your entire 529 plan in undergraduate school, you can apply what’s left to your graduate school costs. Though the time horizon is shorter to save for graduate school, it is also possible to set up a 529 plan dedicated just for graduate school.

Take a Look at Loans

Although they account for only 25 percent of all students in higher education, graduate students account for nearly half of student debt. Because there is no cap for graduate school borrowing – up to the full cost of attendance charged by the college – nearly a quarter of graduate borrowers take out more than the lifetime limit for undergraduate borrowers in just a single year of grad school.

It is one thing to compare the average undergraduate debt ($28,950) to an MBA ($66,300). But it is a whole new level of payback stress for a law degree ($145,000) or a medical degree ($201,490). Add the fact that interest rates are higher for grad school than for undergrad, and the debt can turn into a long-term burden.

Wondering how to minimize the hit to your financial future when you really need a loan for graduate school? Take out only what is absolutely necessary, access every tax benefit available, and pull out all the stops to save pennies and earn cash while in grad school.

These are the types of loan programs available for graduate students:

• Federal Direct Unsubsidized Loans: Sometimes called Stafford Loans, these are not based on financial need and do not require a credit check. You are responsible for paying all interest on these loans, which begins accruing while you’re still in school and during your grace period or deferment. It is best to max out these loans before you sign on to PLUS or private loans.
• Federal Direct Graduate PLUS Loans: These loans are for expenses not covered by other financial aid offered by your school. They require a credit check and carry a higher fixed-interest rate than federal direct loans.
• Private Loans: Depending on your credit score or a co-signer’s endorsement, you could qualify for a competitive rate on a loan from a private bank or other lender, usually without the origination and processing fees associated with federal programs. The downside is they don’t offer long forbearance periods. If you are planning on law school, medical school or business school, it’s likely you’ll find a lender offering a loan specific to your degree.

Paying for Continuing Education

While there are not as many options to finance your continuing education, the upside is that career training, certifications, and continuing ed programs are much less expensive than graduate school.

Scholarships

Philanthropic organizations, private agencies, state education departments, and the schools themselves often offer scholarships for continuing education and certification programs. For example, there are specific scholarships available for paralegal students.

State societies, clubs, and professional groups often subsidize travel and attendance at conferences, CEU courses, and training programs. If you’re in a regional human resources group, for example, they might underwrite your tuition for SHRM certification.

Loans

Federal student loans only apply to full-time graduate students, so stand-alone certification courses or part-time professional development programs don’t qualify. However, several private lenders do offer loans for career training programs. Sallie Mae’s Career Training Smart Option Student Loan is designed specifically for nondegree-seeking students, professional certifications, and culinary and technical school students.

If you’re confident the return on your investment will be adequate (and fairly immediate), you can also consider paying for a course with a credit card, but do so cautiously. Interest rates and fees for credit cards are often triple or quadruple a student loan rate.

Employee Benefits

The good news is that the IRS allowance for employer tuition reimbursement applies to career training and continuing education. The bad news is that only about half of employers offer this in an employee’s benefits package. If yours does not include the $5,250 that can be deducted by your company for courses, make a suggestion to your boss and to HR to add it. If it’s not a formal perk but there is a program that will help you perform your job better, write a letter to your supervisor explaining the benefits to your business. In your letter, ask if the company would be willing to pay for the program or at least approve paid time off for instruction.

USF Can Help You Reach Your Next Goal

No matter where you’re headed in your career, USF Corporate Training and Professional Education is here to guide you. Thinking of graduate school? We offer exceptional GMAT and LSAT prep courses. Planning a big pivot? Navigate a career change with our business, technology, and leadership training. Browse our programs to see if they can point you in the right direction for continuing education.