Paying for Graduate School

by Dual Income No Kids on September 23, 2006 · 0 comments

…is not easy. If you’re a frequent reader of DINKS finance you’ve probably known by now that my wife and I are both full time students. Miel is working on an MA in management and I’m a doctoral student.

Graduate school, when done properly, is a full time effort. However, the cost going to school can be quite significant. For example, I’m going the University of Maryland, and the cost of tuition alone is $16,000 per year. Once you add the cost of living, rent, and other expenses, and the price tag of being a student can easily top $30,000 per year.

The key question is how to come up with the money. Other than borrowing it, there at least four strategies you could consider.

1) Employer Help: My wife’s work pays for approximately $5,000 of educational expenses per year. She’s been able to apply these funds to her tuition bill as well. If you’re going to school and are working full time, you should definitely look into this.

2) Assistantships: A lot of on-campus jobs for grad students cover chunks of tuition and pay a small monthly stipend. For example, I’ve got one of these and it pays about $6,000 worth of tuition a semester and $600 a month salary.

3) Selling Assets: If you have any assets, you might consider selling them. The decisions making logic is as follows. If your investments are growing at a rate less than your cost of borrowing money, you might want to sell of your assets rather than borrowing money. For example, it would cost me about 8.5% for a federal loan this semester. However, my stock investments are yielding less than 8.5% percent currently, so for me its cheaper to pay the bill, rather than borrowing to pay it. In fact, I sold about $2,000 worth of stock to pay the balance of my tuition bill this semester.

4) Scholarships: Scholarships: We haven’t landed one of these yet (its not for lack of trying), but if you can get them they can often help with the cost of books or other incidentals. Plus getting scholarships is a good resume builder.
If all else fails, you might have to go after some money from the Federal Financial Assistance program. This program offers aid for students in the form of loans and grants from the federal government. You will start by filling out a Free Application for Federal Student Aid, or FAFSA. From there, the government will determine your need for assistance based on your income and family situation. It might be a good idea to set up a meeting with your school’s admissions office beforehand, as a representative will walk you through the process and might be able to track down some additional sources of aid directly through the university.

Hope this helps!

Best,

James

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