How To Get Your Graduate School Education Without Going Into Debt

Written by Grad School Center Team We are a passionate team of experienced educators and advisors at, dedicated to guiding students through their graduate education journey. Our experts, with advanced degrees across various disciplines, offer personalized advice, up-to-date program information, and practical insights into application processes.

Reviewed by David Krug David Krug is a seasoned expert with 20 years in educational technology (EdTech). His career spans the pivotal years of technology integration in education, where he has played a key role in advancing student-centric learning solutions. David's expertise lies in marrying technological innovation with pedagogical effectiveness, making him a valuable asset in transforming educational experiences. As an advisor for enrollment startups, David provides strategic guidance, helping these companies navigate the complexities of the education sector. His insights are crucial in developing impactful and sustainable enrollment strategies.

Updated: February 29, 2024, Reading time: 13 minutes

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Over the past decade, 21 million people over 25 have earned a master’s degree, and 4.5 million have completed a doctoral program. The figures don’t lie: many Americans understand the significant opportunities that graduate school brings.

Exciting as that may sound, there’s no denying that advanced education usually comes with a price—and a hefty one at that, literally! Student loans, which currently accounts for a whopping $1.3 trillion in debt in America, have been the subject of heated debates: while it makes higher education achievable, it’s a financial burden that takes years, if not decades, to finally get rid of.

Grad School Center is an advertising-supported site. Featured or trusted partner programs and all school search, finder, or match results are for schools that compensate us. This compensation does not influence our school rankings, resource guides, or other editorially-independent information published on this site.

A Quick Look at the Salient Benefits of Graduate School

To understand whether or not graduate school is worth the money you’re spending for it, let’s explore how graduate education leads to a minefield of excellent opportunities:

Transitioning to a different industry becomes relatively easy.

If switching to a different career path is in your plans, consider a graduate degree as your ace card! Enrolling in a graduate program facilitates self-reinvention, enabling you to obtain new knowledge and specialized capacities. 

High educational attainment = high pay.

Graduate education gets you promoted to leadership positions. It’s an excellent path to professional growth. 

A graduate program immerses you in actual, more relevant experience.

Master’s and doctoral programs give you access to internship opportunities that may otherwise not be available in your bachelor’s program. Your graduate program’s dedicated focus on your specialization offers a deeper understanding of the trends, practices, and techniques unique to the field of your choice.

Grad students and graduate degree holders contribute to the community.

Graduate education shapes an innovative mindset that leads to important research and discoveries that benefit the general public.

Reasons Why Graduate Student Debt Can Be a Serious Problem

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Even as they are armed with the competencies unique to graduate degree holders, students with debt worry about a weak job market derailing their financial prospects. They fear drowning in a sea of student loan debt and being hounded by creditors for the rest of their lives!

Here are some reasons why graduate student debt, when mismanaged, can be a serious problem:

It has a negative impact on your credit score.

Failure to make loan payments can significantly impact your credit score, reducing the likelihood of you taking out more loans and resulting in high loan interest rates.

Even insurance applications require a good credit score. Your credit score and financial situation also come up in public records and searches for bankruptcy filings and similar court documents.

It may not qualify you for employment or business ownership.

When you apply for a job, your future employer is likely to conduct a background check on you—and unsettled student debt makes a bad impression! Credit checks are a common practice in evaluating a candidate for, in particular, the financial sector.

In order for employers not to take your credits against you, you need to make sure you won’t ever run behind your payment terms. 

Your student loan information “stays forever.”

When taking out a car or home loan, you’ll have the option to return the car or asset if you can’t ever be able to pay up the loan. Unfortunately, this is not the case for graduate student loans. When the process of repaying your student loans begins, there is nothing left to return; it’s been used up for your education!

Unlike businesses, you aren’t able to declare bankruptcy or sell your assets to pay your debt.

It may hinder you from pursuing your dreams.

Debt from student loans impacts more than your financial freedom. It also dictates the often-few aspirations you’ll be able to fulfill. You may have to give up a profession that brings you more joy and opt for a better-paying job instead.

Defaulting on student loan payments can affect your overall finances.

You risk being in default on your student loan (or any other debt, for that matter) if you miss payments. Eventually, that loan turns into an overdue debt. Until you make that payment and bring your account current, you will continue to be in default. 

National credit reporting agencies will receive information about your defaulted student loan, which, consequently, negatively impacts your ability to borrow money in the future. The government also has the option of collecting your loans by taking funds from your paychecks, tax refunds, and other government payments.

Ways to Finance for Your Graduate School Education

The facts surrounding student loan debt are often disheartening, but you can work your way around these issues and get your graduate education! Here are the most popular ways:

Take advantage of programs that assist you in managing your educational costs. 

Grad schools offer SAF Programs (Scholarships, Assistantships, and Fellowships), each with a unique application process:

Use your savings (but NOT your emergency fund). 

You can use savings to help pay for graduate school. While so, you need to have some money saved up for unforeseen expenses. Make it your goal to replenish the personal savings that you spent for grad school.

Consider Federal Student Loan.

The basic Federal Student Loan options for grad students include:

Graduate students can use Direct PLUS Loans, which are federal loans, to assist in paying for college or career school. The cost of attendance (as set by the school), less any additional financial aid you receive, is the maximum PLUS loan amount you are eligible to borrow.

A low-interest, flexible payback loan with no need-based requirements is called a Federal Direct Unsubsidized Loan. Graduate and undergraduate students can both utilize it. Its features include a fixed interest rate. It is not subsidized. Therefore, the borrower is responsible for paying the entire amount due.

Work and study at the same time.

The federal work-study program and graduate assistantships provide two options for part-time employment while pursuing your graduate degree. These programs provide a debt-free option to help pay for graduate education.

Usually located on campus, assistantships entail some amount of research or teaching. When feasible, a work-study program should take place off school and involve employment that is relevant to your degree. You will get either a stipend or a salary. 

Another option is to work externally, find an employer, and work part-time or full-time. This set-up, however, requires excellent time management skills so that you can balance your time for work and studies. 

Explore employers’ benefits.

Certain businesses provide tuition help or reimbursement, which means they will pay a portion of your future educational expenses. Employers could potentially be prepared to contribute to student loan repayment. 

Asking your manager or the HR department about tuition reimbursement is a good idea if you think a graduate degree would benefit your company. Remember that in order for a company to cover your tuition, they could need you to commit for a few years at a time.

Make sure that the graduate education will provide you with solid skills that will be beneficial for the company’s growth. During your program, you must remain employed full-time.

If you must take out a private loan, settle only for the best private lenders.

Financing your school through borrowing is a decision that should not be made hastily. However, if you use them wisely, loans might provide you with the money you need to finish your education. 

While private lenders are an option, consider federal student loans first! Generally speaking, interest rates on government loans are lower than those on loans from commercial lenders like banks. Other benefits of federal loans might include income-based repayment plans or loan forgiveness for specific occupations.

Only after all federal loan alternatives have been exhausted should you consider private student loans—but only after thoroughly examining multiple lenders. Private lenders sometimes provide deferral plans for difficult times, even if they don’t always have the same benefits as income-based repayment choices.

Examine interest rates offered by PLUS loans and the one you would be eligible for. Remember that most private lenders do not charge an origination fee for PLUS loans. If you are enrolled in graduate school full-time, you usually are not required to pay back student loans.

However, all graduate student loans will accumulate interest, which will raise the total amount you owe.

Work now, attend grad school later.

Is now really the right moment to enroll in graduate school? If all factors point to a “not yet,” that’s okay! Give yourself enough time to save and secure the funds for graduate study.

Smart Tips for Acquiring a Graduate Education

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Assess your financial situation.

Prior to beginning your graduate school search, you should consider the following important financial questions for yourself:

Set a budget.

Whatever your mode of financing for graduate study—be it student loan, stipend, savings, or employment—budgeting is critical to maintaining financial security. Keep track of every expense you have, and create expense notes every month to keep track of your cashouts.

Understand the real cost of these items and how it affects your take-home pay if you’re employed or pursuing a career. When you know how much you earn and spend every month, you can estimate your money better! 

Planning your finances will still be crucial if you graduate and start a career. For example, negotiating your starting wage is essential to your career path since it affects bonuses, increases, and even retirement funds.

Research your graduate program extensively.

Graduate education can be extremely costly, as in the case of earning an MBA from a private institution. To avoid overpaying, make a list of the best graduate programs in the field that you want to study. 

Many factors can affect how you choose the best graduate program. If your primary concern is the cost, it’s best to check graduate programs that come with diverse financial aid options. Take as much time as you can to look at the financial aid each program offers when researching graduate schools.

Make sure that you are eligible for their scholarships, fellowships, grants, assistantships, or work-study programs. By exploring the financial aspects of the program, you can make more informed application decisions.

Before applying for graduate school, establish a good credit score. Your eligibility for student loans or any graduate financial help, if necessary, may be delayed if you have issues with your credit history.

Look out for career-specific financing opportunities.

One of the great things about some careers is that they may offer financing opportunities that are limited to their industry only. Some graduate programs may offer scholarships that other programs may not.

Also, find out if your career qualifies you for special loan forgiveness programs. For instance, some student loans may be forgiven under special programs for high-demand professionals.

Actively look for a job.

If at all feasible, think about taking a part-time or full-time job in your graduate school. You may even collaborate with or work for a department faculty member. By working for your graduate school, you may increase your employability since you can add this work experience to your CV.

You can even be absorbed as a regular full-time employee after you graduate. 

Set strategies to pay off student debts.

There are many excellent pieces of advice about financing grad school. But you must also set strategies to pay off student debts. If you qualify for federal income-driven repayment options, find out if they are right for you. Consider different debt repayment options, such as refinancing or asking your employer for help.

Discover tuition-free graduate programs.

The good news is that there are actually now more tuition-free graduate programs available in almost every state. No matter your financial situation, some programs can be earned for free. Some require you to pay for small costs, like acquiring books and other study resources.

Most of these free graduate programs are offered online, so it’s best to explore and study your options.

Reach out to the admissions office directly.

While many graduate students do this tip early on their way to enrolling in graduate school, some others fail to do it. It’s best to reach out to the admissions office directly. Nothing compares to being able to ask directly all of your queries and questions regarding financing for graduate school.

The academic and admission advisors are usually more than ready to assist you with anything.

Continue your research even after getting enrolled.

After you enroll, never stop requesting financial aid and looking for graduate grants and scholarships. Once you are there, there can be further financial assistance options that become accessible.

Ask the graduate financial aid office if there are any new scholarships available at the conclusion of each term, and if so, find out how to apply and stand out from the competition. Chances are they may offer new programs or benefits to recurring students who can have tuition discounts. 

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Get a Debt-free Graduate Education!

The financial and intellectual rewards of furthering your education have the power to change the trajectory of the rest of your life. However, a widespread misperception about graduate school is that it is extremely expensive and out of reach.

If you carefully consider your funding options after being accepted and enrolled, and if you plan enough, you can finance your graduate degree. Examining your options is the first step in ensuring that you are as financially prepared as possible before enrolling in graduate school, even though paying for it could feel overwhelming.

Additional Resources:

We’re certain of one thing—your search for more information on picking the best graduate degree or school landed you here. Let our experts help guide your through the decision making process with thoughtful content written by experts.