Earning a college degree is a necessity for many career-minded young adults, as employers across multiple industries make it a prerequisite to applying for a job. Although an undergraduate degree may have been sufficient in years past, higher-earning positions demand higher levels of formal education.

A graduate degree can lead to increased career opportunities, which result in a greater potential for higher salaries and faster promotions.
However, with the average cost of a graduate-level degree rising above $18,400 per year, managing the price tag is no simple feat.

Graduate students must also factor in their need to cover necessary living expenses while pursuing post-secondary education, and the difference between in-state and out-of-state tuition costs. Fortunately, several payment options exist for prospective and current graduate students that may ease some of the financial burden.

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Exploring Your Payment Options

Before committing to graduate school, students should recognize that various options are available to help cover the cost of tuition and living expenses, many of which don’t require loans.

Understanding which options are best suited for you requires time and effort, researching what is available based on your unique circumstances. Let’s start with the kind of payment options for graduate school everyone should seek out first: free money.

Free Money for Graduate School

Free Money for Graduate School
When it comes to paying for graduate school, free money is not entirely free. Instead, it means utilizing payment options that are not tied to some form of repayment in the future.

First and foremost, savings can, and likely should be, used to cover the cost of post-secondary education when possible. This can wipe out a significant portion of the price tag before looking into alternative solutions.

After savings, other forms of “free” money, including scholarships, work-study programs, and grants, may be viable options.

Graduate School Scholarships

Scholarships fall under the free money category for graduate school because the money received does not need to be repaid.

Private organizations, non-profits, and some colleges and universities offer scholarships based on a student’s background, community service they perform, or specific groups they associate with regularly. Merit-based scholarships are also available to potential graduate students, based on undergraduate grades or other accomplishments.

Here are a few graduate student scholarships currently available:

Beinecke Scholarship: This scholarship is available for up to 20 recipients each year across 135 colleges and universities. Exceptional college juniors nominated by the school may be eligible to receive an initial $4,000 and up to $30,000 during a graduate-level program. Qualified students must plan to enroll in a research-based Masters or doctoral program in the arts, humanities, or social sciences.

Davis-Putter Scholarship: This need-based scholarship is available to undergraduate and graduate students who are active in the progressive movement to end racism, sexism, homophobia, and other forms of oppression through activism. Awards are granted to students who can show financial need, up to $15,000 per year.

Violet and Cyril Franks Scholarship: Through the American Psychological Association, this scholarship is made available to graduate-level students using a psychological perspective to help understand mental illness in their studies. The scholarship may be awarded to a graduate student who is in good standing at an accredited university and shows a demonstrated commitment to solving stigma issues around mental illness.


The Federal Work-Study program offers part-time employment to graduate students who have a financial need.

Through the program, graduate students can help pay for education-related expenses with the money they earn through part-time employment during their enrollment. A college or university administers each work-study program, and students may be paid either hourly or by salary, depending on the type of work performed.

A work-study program not only helps with covering some of the cost of graduate school, but it also can help lead to gainful employment upon graduation.


Grants, similar to scholarships, provide funding to eligible graduate students who can show a financial need. Money received does not need to be repaid, so long as graduate students follow any guidelines set by the organization providing the grant.

Federal grants, such as the Teacher Education Assistance for College and Higher Education Grant, are offered by the Department of Education or other federal financial aid programs to low-income students.

State grants are also made available to graduate students who show financial need, but they are administered on a state level instead.
School-specific grants may also be available to graduate students who are enrolled in a specific program of study who can show financial need.

Graduate School Student Loans – Not So Free Money

Graduate School Student Loans - Definitely Not Free Money
Once “free” money options are exhausted, graduate students likely need to resort to student loans. Federal and private student loans are offered to eligible graduate students, regardless of financial need or merit. However, these funds must be repaid after leaving school, unlike scholarships, grants, or work-study income.

Federal Student Loans

The U.S. Department of Education offers a federal student loan program through which graduate students may receive loans to cover their education expenses.

Federal student loans for graduate students are available through Direct Unsubsidized Loans or Direct PLUS Loans, with no requirement to show a financial need. However, Direct PLUS Loans offered to graduate students who have adverse credit history may require students to meet additional qualification guidelines after a credit check is performed.

Funds received must be repaid after a graduate student leaves school, and interest accrues on the loans from the moment funds are dispersed to cover education costs.

Private Student Loans

As a final option, private student loans may help graduate students receive funding for graduate school. Because private loans require a strong credit history or a co-signer, and they may have higher interest rates and less flexible repayment options than student loans, private loans should be a last resort.

Private lenders offer these graduate student loans, not the federal government, and eligibility requirements vary from lender to lender.

In many cases, however, students must meet minimum income requirements as well as credit history and score guidelines to qualify for private student loans.



Graduate students have many different options to help cover the cost of earning a post-secondary degree. However, it is necessary to conduct a cost-benefit analysis before pursuing graduate-level education. Weigh the pros of earning a graduate degree, including the potential for salary increases or promotions, against the total cost of attendance, such as tuition, living expenses, and books, before deciding which route makes the most financial sense for you.

Guest Post by Andy Kearns

Andy Kearns is a Content Analyst for LendEDU and works to produce personal finance content to help educate consumers across the globe. When he’s not writing, you can find Andy cheering on the new and improved Lakers, or somewhere on a beach.

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