For most undergraduates, the price tag of tuition is an afterthought. It’s not until they graduate and begin making student loan payments that the true cost of a college degree sinks in. For anyone going back to school, that cost is already well understood. That’s why if you’re thinking about applying for Ph.D. programs, you’re probably also thinking about where the money is going to come from. Depending on the program you’re ultimately accepted to, that answer can vary significantly. Read on to learn a few options for how to pay for your Ph.D. – and how you can continue to save money after graduating.
University Funding
Many universities offer fully-funded Ph.D. programs that will cover the cost of tuition, fees and health insurance. They may even offer an annual stipend designed to cover living expenses. In exchange for the stipend, you may have to work as a research assistant (RA) or teaching assistant (TA) in the department. These stipends generally range from $18,000 to $30,000 a year, and the amount depends on the university. When applying to different universities, make sure you understand if the program is fully-funded or not. This will let you know how much you’ll be financially responsible for.
Federal Student Loans
If you don’t get into a fully-funded program, then federal student loans are the next best option to pay for your Ph.D. They have income-based repayment plans, extended deferment and forbearance periods and loan forgiveness options. You have to fill out the Free Application for Federal Student Aid (FAFSA) to become eligible for federal student loans. Interest rates on federal student loans are subject to change from year-to-year but are relatively low. The federal government offers the following student loan options for Ph.D. candidates:
Direct Loans
Ph.D. students are eligible for up to $20,500 in Direct Unsubsidized Loans each year, up to $138,500 in total including any undergraduate loans. For the 2021-22 school year, the interest rate on these loans for graduate and professional students is 4.30%. There is also a 1.057% loan fee that is assessed each year. Interest will accrue on the loans while you’re in school, during the six-month grace period after graduation and during any deferment periods.
Grad PLUS Loans
Students who have maxed out their Direct Loans can apply for Grad PLUS loans. The interest rate for Grad PLUS loans is 5.30% for the 2021-22 school year. The limit you can borrow with Grad PLUS loans is the total annual cost of attendance subtracted from any other financial aid, like grants and scholarships. The borrower’s university determines the total cost of attendance. Unlike the Direct Loan Program, the federal government will run a credit check if you apply for a Grad PLUS loan. There is no official credit score minimum, but you can’t have any late payments of 90 days or more, defaults, bankruptcies, tax liens, wage garnishments or other adverse actions within the past five years. If you have an adverse action and don’t qualify for a Grad PLUS loan by yourself, you can ask someone to co-sign or endorse your student loan. This person will bear financial responsibility if you stop making payments. You can also prove to the Department of Education that there were “extenuating circumstances” explaining your adverse actions. Students who are approved with an adverse action will have to complete a credit counseling course.
State-Based Grants
While most states only offer grants to undergraduate students, some offer assistance to graduate students. These are almost exclusively available to local students attending an in-state college. Do a Google search for your state and grants to see what your options are. Make sure to apply for these early, as some are on a first-come, first-serve basis.
Apply for Scholarships and Fellowships
Ph.D. students can apply for scholarships to pay for tuition and living expenses, just like they did for their undergraduate program. They can apply for scholarships directly through the university and from outside organizations. These scholarships are even more crucial for students whose Ph.D. programs are not fully funded. Many of these scholarship deadlines are due a year before, so it’s best to fill these out well ahead of time. Fellowships are another source of funding for Ph.D. students. These can be competitive and hard to find but are worth applying for because most fellowships will cover all of your expenses. Plus, in most cases, you don’t have to work for the university as a TA or RA in order to earn your fellowship. This frees up more time to conduct your research.
Ask Your Employer
Some employers will pay for you to go back and get a Ph.D. This route will likely take longer than becoming a full-time student because you’ll still have to work full-time, but you could also save a lot of money by having tuition, fees and books paid for. Ask your HR department if this is a possibility.
Take out Private Loans
If you need student loans and don’t qualify for federal aid, your next best option is to take out private student loans. There are a variety of private lenders with their own interest rates and fees. Make sure to compare private lenders before you sign up, so you can find one with the lowest interest rate.
Refinance Student Loans after Graduation
You can refinance both federal and private student loans after graduation. You may end up with a much lower interest rate and could save thousands of dollars in total interest paid. For example, let’s say you borrowed $30,000 in Grad PLUS loans with a 5.30% interest rate and a 10-year term. If you qualified to refinance to a 3.5% interest rate and a 10-year term. In this example, you would save $3,114 in total interest. For more information about refinancing your student loans with ELFI, explore our student loan refinancing webpage or contact us.
