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Affordable ways to get your Master’s degree
There are countless advantages to securing your master’s degree in your chosen field, but really? Who can afford it? If you’re like most recent college graduates, you’re still paying off your student loans and not looking to rack up any more debt. So how can you fund the next step in your education without resorting to a diet of Ramen Noodles and living in your parents’ basement?
According to Sallie Mae’s 2017 How America Pays for Graduate School Study, 63 percent of students begin graduate school within 12 months of an undergrad degree. The average amount spent was $24,812, and 77 percent of it was paid by the student.
The study also says that 8 in 10 graduate students said they were more responsible for making decisions about how to pay for school than they were as undergraduates. Nearly three-quarters created a plan for how they’d pay for grad school before they enrolled in a program.
Here are some smart and creative financial strategies that will help make the journey more affordable, and your future career plans more easily attainable:
Let your company to foot the bill
A recent report from the Society for Human Resource Management says that 54 percent of employers offer a tuition assistance program. If you work for a company that provides any type of tuition reimbursement, and you’re interested in furthering your education, this is the first and best place to start. Tuition assistance is a way for your employer to invest in you, your career, and the company’s future. With an advanced degree, you bring a broader perspective, better understanding, and valuable decision-making skills to your position. Your skills may also lend themselves to increasing revenue, reduced expenses, or other similar benefits for the company. Overall, it’s a win-win for both sides.
Be sure to investigate the details of your company’s education assistance program. You may need to stay at the company for a given period of time after you complete your degree, or the reimbursement percentage may depend on your final grade. Not all plans are the same, so take time to meet with your Human Resources Department for the details. If you work for a smaller company that doesn’t offer tuition assistance, don’t give up too easily. You could present your boss with the benefits that a specific course of study could bring, and how it would help you add value to the company. You’ll never know until you ask, and even if it’s a no, it’ll show your desire to improve your position and further your career.
Apply for a scholarship
Yes, graduate programs offer scholarships and fellowships, but they’re typically based on merit. Check with the school’s Financial Aid office, as well as the Graduate Admissions department. They’ll be aware of any aid awarded through the different academic departments. Search for trade and professional associations in your field that may also be looking to financially support graduate student education. And, of course, check out the many online scholarship databases, like GoGrad, Scholly, FastWeb, and ScholarshipAmerica.
You may be busy balancing work, researching schools and programs, and figuring out how you’re going to afford your continuing education, but start your scholarship search as early as possible. You stand your highest chance of scoring some cash when the scholarship pot is full.
Apply for an assistantship
Work-study programs are more common than you’d think, especially in grad school. Assistantships usually pay a portion of the tuition cost and a small stipend as compensation for your research or classroom instruction time. These positions, generally considered training and not necessarily employment, usually require an average of 20 hours per week. They’re granted by the different academic department so, if you’re seriously considering an assistantship, seeking out faculty members or department heads in your program of interest is the smartest strategy. And, again, the earlier, the better.
If you must borrow, be smart
More than 75 percent of all grad students wind up taking out some type of education loan. Your first choice should be a federal loan, so fill out the FAFSA, Free Application for Federal Student Aid. It’s required for access to any federal student aid.
With a Direct Subsidized Stafford Loan, you can qualify for up $20,500 for each year of study with a combined undergraduate and graduate loan limit of $138,500. All Stafford loans are unsubsidized, so interest is not deferred, but payments are not required until six months following graduation.
Once you’ve exhausted your Stafford Loan eligibility, you can move onto a Graduate PLUS loan. The Graduate PLUS loan is a federally guaranteed loan that can be used to pay the full costs of graduate school, including reasonable living costs. You must be enrolled at least half-time and have minimally acceptable credit.
Private loans through banks and credit unions are also available for graduate study. These loans are based on your individual credit rating, so the higher your credit score, the more likely you’ll be approved, and at a better interest rate. Just as with federal loans, you’ll pay back the principal and interest. Many offer the option of making payments while you’re in school or deferring your payments until after you graduate.
Get credit for credits
As a graduate student, you’ll also want to see if you qualify for the federal Lifetime Learning tax credit. It’ll allow you to subtract up to $2,000 per year from your tax bill. It’s available to single filers whose adjusted gross income is $62,000 or less, or to married filers whose AGI is $124,000 or less. The credit applies to 20 percent of your tuition and other required educational expenses, up to a maximum of $10,000. Talk to your tax advisor for more details.
When it comes to education and expenses, there are lots of ways to find financial support, but it takes some legwork. Invest some time, exhaust your resources, and you’ll make the right financial decision about how to fund your future success.
Congratulations to our 2017 John B. White, Jr. Memorial Scholarship Recipient, Edward Holliday!
Should you borrow to get an MBA?
If you’ve decided that an MBA is an important investment in your career, then your next step should be to determine how to finance your next two years of study. While many students rely on a combination of their own savings, help from family and other outside sources, other students have only to rely on the availability of grants, loans, and employment. If you’re a member of the latter group, don’t be discouraged. There are multiple resources that can help you overcome the financial challenges.
Start where the money is free. Grants, also called fellowships, fall into this category because they do not need to be repaid. A grant is awarded from the government, a foundation, or a trust and is typically given to an institution, a business, or an individual. The criteria for receiving a grant is not necessarily achievement based and can be more general in nature.
A business degree makes you a valuable asset to your employer, which is why your company may be willing to finance your post-baccalaureate education. They may already have a tuition reimbursement program in place. If not, submit a proposal that highlights the benefits of investing in you and your future at the company. Interviewing for a new position? Consider using tuition reimbursement as a negotiating tool.
Student loans, the most popular education financing tools, fall into the opposite category because they require repayment. Federal student loans can be either subsidized or unsubsidized, which determines whether the government or the borrower is responsible for paying the interest while you’re in school, as well as the generosity and flexibility of the loan repayment terms.
Private loans designed to meet the needs of an MBA student can also be attractive options when it comes to supplementing other sources. In fact, if you have excellent credit, a private lender may be able to offer a more competitive interest rate and friendlier repayment terms. Most private lenders don’t charge application, disbursement or origination fees and you can refinance your loan if interest rates go down or your credit score increases.
While they may not be your first choice, don’t cross private loans of your list quite yet. They do have their advantages, especially when you combine them with other sources to create a flexible and smart financing package.