Financial aid advice for grad students
Now that your undergraduate days are over, a new, somewhat different financial aid world awaits you. For most of you there is a major difference. Now your school will treat you as an independent for financial aid purposes. You do not have to include parents on the FAFSA, which means that you are likely to be eligible for more financial aid. That’s the good news. The bad news is that the lion’s share of financial aid in grad school is in the form of student loans and the worse news is that there are not enough need-based loans in the system to cover all of your expenses. Navigating grad schools of all kinds including law, medicine and dental schools will require some smart approaches both going into the system and after. But if you are smart enough to get into a grad school, you should be able to handle the challenges associated with funding that education.
Financial Aid Myths
I will never be able to get enough money to pay for grad school.
Sure you can. First, the student loan eligibility clock begins all over again when you enter grad school even if you used up all loan eligibility for your undergraduate degree. Moreover, despite the limits on need-based loans, there are GradPLUS Loans that will allow you to borrow as much as you need over and above any grants and need-based loans you may have received so that you can completely finance your graduate school education. In addition, many grad schools have loan programs of their own often at very favorable interest rates.
I can’t pay my undergraduate loans while I go to grad school.
Not to worry. Simply ask for deferral of repayment on your undergraduate student loans while you are in grad school. It is easy to arrange (and may be automatic for federal loans) but you will have to show reasonable rates of grad school progress for it to continue.
I don’t have credit history so I won’t qualify for a GradPLUS Loan.
It may not be a problem. First, you probably do have a credit history but you may not know it. For example, if you had a student loan, credit card, or car loan, you likely do have a credit history. Second, before you can qualify for a GradPLUS Loan, a credit report will be requested by the federal government, the lender. This is one lender who will try to overlook some minor "dings" in your credit report in order to issue the loan. The feds are smart enough to know that the loan risk may be paid back many times over in the form of taxes by a highly-paid professional in the years ahead. That would be you!
Financial Aid Tips
Some tips to help you navigate the system:
Always use Stafford Loans before turning to a GradPLUS Loan.
In fact, you must use all of the normal subsidized and unsubsidized Stafford Loans first before applying for a GradPLUS Loan. And it is a good idea since Stafford Loans are less costly than GradPLUS Loans.
Explore all other kinds of aid in grad school.
You would be surprised at all of the opportunities for aid in grad school. There are fellowships, internships, teaching and research assistant possibilities, and many campus-based graduate-level positions for advisors and dorm proctors. Always do a good job in year one of a graduate program and try to work with a faculty member who may be able to reward your work with a paid assistantship.
Ask your employer for help.
Try to find employers after graduate school who can help you repay your graduate school loans. Suggest at the very least that the employer pay the loan principal and you can pay the interest since the loan interest is tax deductible.
Graduate school is your ticket to an exciting new world where you will have the chance to practice whatever specialty you have chosen along with the credentials that will enable you to ascend to the top of your chosen field if you have the talent, vision and desire to do so. As you pursue these endeavors, it is important to orchestrate all of the aid and loans at your disposal so that any financial burden over the long run is minimized.