Financing Graduate Study
The financial aid process for graduate school is different from that for undergraduate study. Filling out a standard financial aid application is no longer enough to tap into all the resources available to you. While the FAFSA is still required if you are applying for federal and state loan programs, it is safe to say that no one form will gain you access to the bulk of the money available for graduate study. In fact, for many school-based awards, no application is needed; merit alone determines the recipients.
FEDERAL AND STATE PROGRAMS
FINANCIAL AID FROM THE MILITARY
HELP FROM YOUR SCHOOL
HELP FROM FOUNDATIONS
INFORMATION FOR CANADIAN STUDENTS
While most graduate students rely on loans to fund their education, many students are supported by the universities they attend, by federal programs, or by foundations. Since most graduate school money is decentralized, you will have to contact each departmental office, foundation, or association, separately; locate the appropriate contact person; and complete all the paperwork required to procure funding.
Here are some ways to maximize your chances of receiving aid from these various sources:
- The early bird gets the worm, so heed deadlines and apply early. In many instances, when the money runs out, it’s gone.
- Apply to schools with strong programs in your area of interest. These are the schools most likely to receive research grants.
- Write to large corporations. Don’t ask them about scholarships, but learn what schools have received research money from them. Apply to these schools.
- Write to the Grants Management Branch of any private or governmental agency that interests you, e.g., the National Institute of Mental Health. Again, ask for a current list of funded schools and apply to these schools. Be persistent and aggressive in your request. Sometimes program officers don’t understand why you need this information.
- Make friends with faculty members. They are powerful people. Let them know about your interests and your abilities.
- Write to the trade associations that represent your field of interest, for example, the American Bar Association or the National Society of Professional Engineers. Also write to organizations serving your ancestry, your nationality, or your religious affiliation. You’ll find addresses in Gale’s Encyclopedia of Associations.
- Write to the graduate school’s departmental office as well as the admission and financial aid offices when you are requesting information. Ask about all university-administered financial aid resources.
The following describes the three major sources of funding for graduate and professional education: federal and state programs; colleges and universities; and private sources, including foundations, corporations, and philanthropic organizations.
FEDERAL AND STATE PROGRAMSIn 2011–12, graduate students received an average of $25,152 in aid, including $7,417 in grant aid, $16,796 in federal loans, and $939 in a combination of tax credits and deductions and Federal Work-Study according to the College Board publication Trends in Student Aid 2012.
To receive any federal or state financial aid, the student must file the Free Application for Federal Student Aid (FAFSA), the same form that you or your parents filed for undergraduate financial aid. For purposes of the FAFSA, graduate or professional students are considered independent so only the student’s income and assets are used to calculate financial need, even if the student is still receiving financial support from a parent. By filing the FAFSA, a graduate or professional student may be eligible to receive financial aid from one or more of the following programs.
Federal Stafford Loans. The Heath Care and Education Reconciliation Act of 2010 mandates that all schools process loans through the Federal Direct Loan Program (FDLP).
This legislation changes the federal Stafford loan, PLUS loan (for parents and graduate/professional students), and consolidation loan application process.
All federal student loans are now made directly through the U.S. Department of Education.
You must complete the FAFSA (Free Application for Federal Student Aid) for Stafford and/or graduate student PLUS loans. Borrowers will have to complete a Master Promissory Note (MPN). You will accept or decline your federal student loans through your school, which works directly with the federal government. For graduate students interested in a PLUS loan, completing the PLUS Loan Information Form will initiate the application process. Contact your school’s financial aid office for detailed information.
To be eligible for a federal loan, you must be a U.S. citizen/national, or eligible noncitizen. You must also be enrolled at least half-time in a degree-granting program at an approved college or university.
The Federal Stafford Student Loan Program, operated through the federal government, offers long-term, low-interest loans. As a result of the Heath Care and Education Reconciliation Act of 2010 all federal student loans are now made directly through the U.S. Department of Education.
Effective for loans made for payment periods that begin on or after July 1, 2012, graduate and professional students are no longer eligible to receive subsidized loans, meaning the student is responsible for all interest from the time the loan is dispersed. While no longer eligible for unsubsidized loans, graduate and professional students may still qualify for up to $20,500 in unsubsidized loans each year. However, you generally may not borrow more than the $138,500 which includes loans taken for undergraduate study.
The interest rate for Federal Stafford Loans is a fixed 6.8 percent for graduate and professional students. The program offers a grace period of six months. That means that once you graduate, or cease to be enrolled at least half-time (as determined by your school), you will not be required to make a payment on your loan for six months.
The federal government has also put certain “safety nets" into place if you are faced with a situation where you can’t make your loan payments. You can apply for deferment and/or forbearance to temporarily postpone or reduce your monthly payments. Under certain circumstances you can also have your loan cancelled or discharged.
You may also want to consider one of the loan forgiveness for public service employees options. This option usually involves having a portion of your loan paid (or forgiven) by the government in return for your commitment to work in a designated public service field for a specified amount of time. For more information on this option visit www.federalstudentaid.ed.gov and click on “Students, Parents and Counselors."
Federal Perkins Loan. A Perkins Loan is federal money given to colleges and universities to distribute to students who demonstrate financial need. The school you attend is the lender, and you will repay any monies borrowed directly to the school. Depending on financial need as determined by the FAFSA, graduate and professional students are eligible to receive up to $8,000 per year (maximum of $60,000 including undergraduate loans). The interest rate is 5 percent. As with Federal Stafford Loans, deferments, forbearances, cancellations and forgiveness may be available. Visit the Web site www.federalstudentaid.ed.gov for more information.
Plus Loans. The PLUS Loan allows the graduate or professional student to borrow an amount equal to the difference between the student’s cost of education (room, board, tuition and fees) and the amount of financial aid the student receives. PLUS Loans have a fixed interest rate of 7.9 percent.
Repayment of principal and interest must begin within 60 days after full disbursement of the loan. The interest is not subsidized while the student is in school. The PLUS Loan charges loan fees of 4 percent, deducted from each disbursement check.
TEACH Grant Program. The Teacher Education Assistance for College and Higher Education (TEACH) Grant Program is available to students who are currently completing coursework necessary to begin a career in teaching; or those who plan to complete coursework necessary to begin a career in teaching. In order to be eligible for awards of up to $4,000 per year (total may not exceed $8,000 for graduate students), the candidate must have at least a 3.25 GPA for each payment period. Upon graduation, the student must teach full-time for at least four years within eight years of completing their program, in a school designated as Title I by the U.S. Department of Education, in a high needs subject area. If the grant recipient fails to complete the service obligation, the award will be converted to a Federal Direct Stafford Loan.
(Note: Due to sequester, award amounts for any TEACH Grant that is first disbursed after March 1, 2013 must be reduced by 7.1 percent from the award amount for which a recipient would otherwise have been eligible.)
Federal Pell Grant. While usually awarded to undergraduate students who demonstrate financial need, Pell Grants may be awarded to graduate students who are enrolled in a postbaccalaureate teacher certificate program. The maximum Pell award for academic year 2012–13 is $5,550. Contact your school’s financial aid office for additional information and to check your eligibility for a Pell Grant.
Federal Work-Study Program. This program provides part-time employment while you are enrolled in school. The program encourages community service work or work related to your course of study, whenever possible. Employment is available both on-campus and within the community. You will earn at least the current federal minimum wage and be paid on either an hourly or salary basis, depending on the type of work you do. Contact the school’s financial aid office for more information.
Tuition Tax Credits. Tuition tax credits represent a direct subtraction from the amount of tax owed by the taxpayer. For more information on all the tax benefits outlined below consult your tax professional or refer to IRS Publication 970, Tax Benefits for Higher Education. This is available online at www.irs.gov or by calling the IRS at 800-829-1040.
Lifetime Learning Credit. For students in graduate school (as well as adults returning to school) a tuition tax credit is allowed, equal to 20 percent of the first $10,000 paid in tuition and fees, or $2,000. You cannot claim the credit if your modified adjusted gross income is $60,000 or more ($120,000 if filing jointly).
Student Loan Interest Deduction. Interest paid on student loans will now be considered a tax deduction. This benefit comes in the form of an adjustment to income, meaning you do not need to itemize on your tax return in order to be eligible. The deduction can reduce taxable income by up to $2,500. The deduction is phased out for single tax filers with adjusted gross incomes of more than $75,000; $150,000 for joint filers.
Tuition and Fees Deduction. Taxpayers can deduct up to $4,000 in tuition expenses as an exclusion from income. This means itemizing deductions on Schedule A of the 1040 is not necessary. The deduction is phased out for taxpayers with adjusted gross incomes of more than $80,000 (single filers) and $160,000 (married filing jointly). The deduction cannot be used if the Lifetime Learning tax credit was applied for the same student in the same year.
AmeriCorps. AmeriCorps is a national service project that works with nonprofit organizations/agencies and educational institutions to run local programs that engage individuals from all backgrounds in community service activities. Volunteers who have completed 1,700 hours (one year) of service are eligible for a Segal AmeriCorps Education Award of $5,550. This award may be used to repay educational loans for those who have attended college or may be used for future educational costs by volunteers who have not yet attended college. Americorps participants may also qualify for the Public Service Loan Forgiveness Program and the Income-Based Repayment Plan. As an added benefit, there are currently more than 100 colleges and universities nationwide that offer matching grant programs to students who are Segal AmeriCorps Education Award recipients.
For information about volunteer opportunities and benefits and a list of schools participating in the matching grant program visit www.americorps.gov, or call 800-942-2677, E-mail: email@example.com. Information is also available by contacting the state or local project offices.
FINANCIAL AID FROM THE MILITARYThe Yellow Ribbon GI Education Enhancement Program, also known simply as the Yellow Ribbon Program, is a provision of the Post–9/11 Veterans Education Assistance Act of 2008. This program is designed to help veterans afford tuition at a college or university whose tuition and fee expenses exceed the highest in-state undergraduate tuition rate (the normal amount paid under the Post–9/11 GI Bill). By entering into an agreement with the Department of Veterans Affairs (VA) a participating institution can contribute a specified dollar amount of those additional expenses and the VA will contribute a matching amount not to exceed 50 percent of the difference.
To be eligible for benefits under the Yellow Ribbon Program an individual must have served an aggregate period of active duty, after September 11, 2001, of at least 36 months. Benefits are payable for training/enrollment pursued on or after August 1, 2009.
Eligible veterans should note that participating colleges and universities choose the amount of tuition and fees that they will contribute as well as the number of slots available. Funds are awarded on a first-come, first-served basis.
Interested military personnel should visit www.gibill.va.gov or the school in which they are interested for more information.
Post–9/11 GI Bill. This benefit is for individuals who served on active duty on or after September 11, 2001. Personnel must have served at least 90 aggregate days of active duty after September 11, 2001, still be on active duty, or honorably discharged or released. Personnel currently receiving benefits under another military education assistance program may elect to enroll in the Post–9/11 GI Bill but will no longer be eligible for the benefits offered by the previous program.
Under the Post–9/11 GI Bill the individual would be eligible to receive the cost of tuition and fees not to exceed the most expensive in-state undergraduate tuition at a public institution of higher education, a monthly housing allowance, and a maximum books and supplies allowance of $1,000. Some individuals may be eligible for a $500 relocation payment.
Recipients may receive up to 36 months of entitlement. Interested military personnel should visit www.gibill.va.gov for more information.
Military Loan Repayment. Some students who borrow from one or more of the Federal Loan Programs (Perkins, Stafford, etc.) may have some or all of their loans repaid by the Department of Defense, depending on the specialty enlisted in, and the length of the enlistment.
Full-time military personnel can qualify to have their loans repaid by the military at the rate of one-third of the loan for each year of full-time duty served (maximum loan repayment is $65,000). Each branch of the military sets its own maximum amount.
Individuals interested in the various Military College Loan Repayment Programs are advised to check with their recruiter or visit www.todaysmilitary.com for more information.
HELP FROM YOUR SCHOOLFellowships, Scholarships, and Grants. This is money awarded by the school either on the basis of merit, special talent, or financial need. In general, these awards cover tuition, fees, and supplies, and may provide a stipend for living expenses.
Research and Teaching Assistantships. You will receive a salary, partial tuition, and possibly health insurance in return for service as a research or teaching assistant. You may be given basic research assignments. You may teach freshman composition. You proctor examinations. In addition to the financial benefits, you gain experience in your field which may be applicable to your thesis or coursework.
Internships. Your college or program may offer internships with businesses or government offices. Your professors may also have connections with organizations that need people in your field of study. Contact your department head or individual professors for additional information.
Employment. You might consider going to work for a university. Many schools discount tuition for full-time employees, and while it will take you a few extra years to complete the program, you won’t have a huge debt burden when you’re through.
HELP FROM FOUNDATIONSNational Research Council. Students in the Sciences, Social Sciences, Mathematics and Engineering may apply for Postdoctoral and Senior Research Awards through the Research Associateship Programs administered by the National Academies. For more information, contact Research Associateship Programs, The National Academies, 500 Fifth Street, NW, fifth floor, Washington, DC 20001; (202) 334-2760; Fax (202) 334-2759; www.nationalacademies.org.
Fulbright Scholars. This extremely prestigious and competitive program allows award recipients to live and study abroad. For more information on this and other grants for graduate study in other countries, contact the Institute of International Education, US Student Programs, 809 UN?Plaza, New York, NY 10017; www.iie.org.
The Council of Graduate Schools
National Association of Graduate and Professional Students
FinAid!: The SmartStudent Guide to Financial Aid
U.S. Department of Education
For Residents of Canada and International Students Going to School in Canada
- Major External Granting Agencies
- Natural Sciences and Engineering
Research Council (NSERC)
Scholarships and Fellowships Division
350 Albert Street, Ottawa, Ontario, K1A 1H5
E-mail: firstname.lastname@example.org; http://www.nserc-crsng.gc.ca
- Fonds québécois de la recherche sur la nature et les technologies
Québec residents only:
140, Grande allée est, bureau 450, Québec (QC) G1R 5M8
418-643-8560; Fax 418-643-1451
E-mail: email@example.com; www.fqrnt.gouv.qc.ca
- Social Sciences and Humanities Research Council (SSHRC) Doctoral Fellowships:
350 Albert Street, PO Box 1610
Ottawa, Ontario K1P 6G4
- Association of Universities and Colleges of Canada (AUCC)
International and Canadian Programs
Canadian Awards Program
Association of Universities and Colleges of Canada (AUCC)
350 Albert Street - Suite 600, Ottawa, Ontario K1R 1B1
(613) 563-1236, http://www.aucc.ca
There are many more fellowships available; for complete details contact the Office of Fellowships or Student Financial Aid at the graduate school you are planning to attend.
- Departmental and Faculty Awards are administered by the individual academic departments. Students should contact the Graduate Studies Coordinator or Director of the specific department they intend to study in for more information.
- Research and Teaching Assistantships are available at most graduate schools. Graduate students are paid salaries to help in conducting undergraduate classes and laboratories. Contact the various departments at the graduate school you plan to attend.
- Loans and Bursaries. Canada Student Loans and provincial student loans are available to Canadian citizens and some permanent residents of Canada on the basis of financial need exclusively. Several provinces augment their loan programs with a forgiveness program to help students reduce their debt loads. Information is available through the Ministry of Education of each province, including:
Ministry of Education and Training
Student Affairs Branch, P.O. Box 4500
Thunder Bay, Ontario P7B 6G9
Ministere de l’Education du Quebec D.G.A.F.E.
1035, rue De La Chevrotière, Québec (Québec) G1R 5A5
- Information for International Students Going to Canadian Graduate Schools. For information on sources of funding and general information for international students going to school in Canada contact:
Canadian Bureau for International Education (CBIE)
220 Laurier St. West, Suite 1550, Ottawa, Ontario, Canada K1P 5Z9
613-237-4820. Fax 613-237-1073
- Always check with the fellowships and/or student financial aid office at the graduate school you will be attending for complete financial aid information; and deadlines, application forms, eligibility, etc.
Special Note: Some graduate schools in the United States, particularly those in the vicinity of the Canadian border, offer special financial aid packages to residents of Canada. Contact the graduate admissions office to see if these incentives are available to you.
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