I have firsthand experience managing money as a graduate student. I entered my first program of graduate study at a large state university one year out of undergraduate school. To pay the bills I bartended part-time and served as a graduate teaching assistant (GTA). My second graduate program began over a decade later while married with two kids, a house, and a full-time job. During that time I served as a graduate assistant (GA) at a small private university. Working as a GA is how I paid tuition. In my case, I forfeited time for money. All situations are unique but nearly all require some form of sacrifice. If earning a graduate degree was easy, everyone would have one.
“Graduate school sounds great, but I don’t have the money to pay for it.”
There are several effective strategies for lowering expenses associated with graduate education.
1. If you prefer to attend school full-time and work part-time, a graduate assistantship may be the best option. Most universities offer assistantships to qualified students (i.e., undergraduate GPA of 3.0+, solid recommendations, superior interview, etc.). Keep in mind, it’s a competitive process as there are usually more applicants than available positions.
In exchange for 10 to 20 hours of work per week, students receive tuition remission (free or discounted tuition) and may also receive a stipend (small salary). Depending on the school, department, funding source, etc. stipends may range from $0 to $30k+ annually.
In exchange for teaching two sections of public speaking each semester (under the supervision of a full professor) I received free tuition and a small stipend. In order to supplement my income, I worked as a bartender a couple of nights per week.
Students may also receive federal student loans to offset costs associated with books, housing, etc. while serving as a graduate assistant.
2. If your preference is to work full-time and attend school part-time, employer tuition reimbursement may be the best option. Many employers offer up to $5,250 per year in tuition reimbursement. Under section 127 of the tax code, the IRS allows your employer to deduct the expense, and the benefit is not taxable to you as an employee. Some organizations offer more. I have worked with employers who provide $30k+ in tuition reimbursement for graduate degrees.
Companies typically offer full reimbursement for grades of B or better and partial to no reimbursement for grades of C or lower.
Warning: in graduate school, a C might as well be an F. Many universities will not confer a degree to a student with more than one C on their transcripts. Also, many employee tuition reimbursement programs will not pay for an employee to re-take a class.
Other tuition reimbursement requirements may include enrolling only in specific work-related courses of study and/or limits on annual reimbursement. There may also be a commitment required by the employee to continue to work for the company for a set amount of time post-graduation. This helps ensure the employer doesn’t lose the investment they made in the employee upon graduation. Make sure to request the details from your HR department before applying for tuition reimbursement.
A friend of mine took an entry level position with a large multi-national corporation solely for the generous tuition reimbursement program. As soon as he was fully reimbursed for the MBA he completed at a prestigious private college he took off for greener pastures.
3. If an assistantship or employer reimbursement is not an option, you may qualify for federal student loans. Graduate students may be eligible for up to $20,500 in student loans on an annual basis. Of course, the loans must be paid back making this the least desirable option.
I know graduate students who used a combination of a part-time job, an assistantship, and limited student loans to pay the bills while in graduate school. Because they only took out loans for expenses not covered by their other sources of income the loan payments were manageable.
“I need the flexibility of an online graduate program, but they’re too expensive.”
Tuition costs at online universities like Phoenix, Capella, etc. are often much higher than nonprofit colleges and universities. Not only are these for-profit schools more expensive the value of the education they provide may not be regarded as highly by potential hiring managers.
Before signing up with an online for-profit university make sure to investigate programs at public and private nonprofit universities. Chances are good they will offer a comparable online program. It may cost substantially less than an online-only school and you’ll enjoy the same prestige as a graduate attending classes on campus.
I live in Springfield Missouri, a Midwestern college town. I compared online tuition costs across two universities located in Springfield and the costs for comparable online programs at Harvard and Phoenix (see graph below).
Springfield’s state and private universities cost substantially less than Phoenix or Harvard. Fees may vary depending on the program selected. It’s best to check with your local nonprofit colleges before signing up with a for-profit school. It would be a shame to earn an expensive degree with low prestige solely for the perceived convenience factor when superior low-cost online options are available.
“I don’t know that a graduate degree will be worth the money.”
Funds wisely spent investing in yourself are never wasted. This post explores ROI considerations when completing a graduate degree.
During graduate school, you won’t have tons of disposable income. You may have to make do with Spring Break at the library rather than the Caribbean but it will be over sooner than you think.
You’ll be glad you invested the money.
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