Graduate School Debt: Understanding The Impact On Your Finances

If you’re planning to attend graduate school, the cost of tuition may be a consideration. Graduate student loans are common among grad students, and the average amount of debt is higher than for undergraduates.

Scholarships, work-study and other federal aid programs can help you minimize your borrowing costs. Additionally, schools offer assistantships that provide partial tuition waivers and living stipends.

Cost of Attending Graduate School

The cost of attending graduate school is a major concern for prospective students. It can be more expensive than undergraduate school, and the degree itself may come with added expenses such as books, supplies, and living costs. Additionally, the amount of debt accrued during graduate school can vary by degree type. For example, a master’s degree recipient typically leaves school owing $54,800 in student loan debt, while a Ph.D. holder accumulates $82,800 in debt on average.

While many students will end up borrowing to pay for graduate school, there are other options that can help lower the cost. One option is to apply for scholarships, fellowships and grants. The application process may be long, but there is a chance that you could receive free money to help offset your tuition and living expenses. Another option is to work while pursuing your degree. Many employers offer their employees tuition reimbursement, so you can earn money and attend class at the same time.

For those who still need to borrow, be sure to only take out the minimum necessary amount. It’s important to keep in mind that interest will be added on to whatever you borrow, so you’ll want to minimize your total loan balance as much as possible. Also, consider working with a lender that offers deferred interest, as this can be helpful to reduce your overall debt load.

Before making the decision to go to graduate school, be sure you have a clear understanding of how much it will cost and what your return on investment will be. A person with a graduate degree typically earns more than a person with only a bachelor’s degree, so it can be worth the additional investment over the course of a lifetime. However, you need to do your research to ensure that the added education is going to increase your earning potential and allow you to comfortably afford your loan payments. If you’re not ready to commit to the additional expense and debt, there are other ways to gain an advanced degree, such as earning a certificate.

Financial Aid

While the cost of a graduate degree can be high, there are several ways to pay for it. Students should start by applying for scholarships and fellowships, which are awards that you don’t have to pay back later, as well as federal and private student loans. In addition, students should consider if they can work part-time while in school to help offset the costs of tuition and living expenses.

Depending on the type of program, graduate school may be worth the debt. For example, a research doctorate typically leads to more earning potential than a master’s degree. However, a two-year graduate degree in library science can cost more than $100,000, while medical and law degrees can lead to six figures in debt. If you are considering a professional doctorate program, it is important to carefully weigh the return on investment and make sure you can financially afford any future repayment.

The best way to minimize grad school debt is to get grants and scholarships, especially those based on merit or field of study. You should also try to work for a college that offers tuition remission or is willing to hire a graduate student as an adjunct professor. Additionally, you can find a loan forgiveness program, which erases your student loans after you have made certain repayments.

When applying for financial aid, graduate students must complete the FAFSA just like undergraduates. This will determine eligibility for grants and scholarships, as well as federal and private student loans. Students should fill out the FAFSA early and exhaust all other options before turning to grad school loans.

Some grad programs are fully funded, such as those that offer a full scholarship and stipend to cover all the costs of tuition. Students should also seek out fellowships that can help defray the costs of their degree, such as those offered by the National Institutes of Health or the American Academy of Nursing. Students should also consider a graduate program with a low debt-to-income ratio, which is calculated by comparing the total cost of attendance to a prospective student’s income.

Student Loans

Student loans are the biggest financial burden many graduate students face. The debt from these loans can impact your credit score and ability to obtain other loans, such as a mortgage or car loan. In addition, the debt can weigh on your decision to pursue a graduate degree or change jobs. It can also make it more difficult to take on new opportunities, as you might be forced to choose the lowest-paid job in your field.

The amount of debt you accumulate depends on the types of loans you have, what school you attend and how much you borrow. Students who attend private colleges or those who take out more loans generally have higher levels of debt than students who attend public schools or those who don’t take out as much in loans. Borrowers from low-income families have the highest level of student debt, and borrowers from minority groups are more likely to struggle with loan repayment after graduation.

To minimize your debt, keep an eye on how much you’re borrowing and try to borrow only what you need. Ask your school for starting salaries in your field of study and use tools available online to calculate the cost of your education and your future income. If you’re considering a for-profit school, be sure to research the careers that graduates from the program go on to have and how their pay stacks up against other jobs in the area.

You should also consider whether your lender charges loan origination fees or other prepayment fees, which can add to the overall cost of your student loans. Some lenders, such as SoFi, don’t charge these fees and offer options to defer payments while in school or after you graduate. The company also has a tool that allows you to see the total cost of your loan, including interest and principal, before making a final decision. It also shows you the minimum monthly payment you’ll be required to make. When it comes to repaying your student loans, the most important thing is to make payments on time. Late payments can affect your credit score and result in penalties.


While the COVID-19 pandemic has focused attention on undergraduate student debt, graduate school students are also facing record levels of borrowing. In fact, according to College Board data, students earning advanced degrees are responsible for 40% of all federal student loans awarded each year, even though they only account for 16% of all college students. The price tag for a two-year master’s degree can be $100,000 or more, and doctoral and professional degrees cost even more. To make ends meet, many graduate students take out debt, which has become a serious financial burden on borrowers who face a lower average income upon graduation than those with just a bachelor’s degree.

Unlike undergraduate student loans, there is no cap on how much students can borrow for graduate school. This makes it easy for graduate students to rack up huge student loan balances without really thinking about it. Then when the time comes to start repaying their student loans, they may find themselves struggling to make payments, especially if they work in public service or another field that doesn’t provide a high enough salary to justify taking on the debt.

The good news is that there are ways to reduce the cost of a graduate degree and make it easier to repay your student debt after graduation. For example, if you work part-time while going to graduate school, you can earn money that will help offset your tuition costs. You can also consider applying for an income-driven repayment plan, such as Public Service Loan Forgiveness, which allows you to lower your monthly payment based on how much you are earning.

It’s also a good idea to save as much as you can while you’re in school. Even if it takes you longer to graduate, every dollar that you don’t have to borrow will be a huge relief down the road. Finally, if possible, try to find an employer that offers tuition reimbursement or other education assistance programs. You can also use the College Scorecard to see average debt levels for a particular degree program; this can help you determine whether it’s worth it financially to pursue that graduate degree.

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