1. Reduce Your Debt
There are a few simple ways to keep your debt burden down. The most obvious method is to limit the amount of borrowing you do. Many students decide to take out all the loans for which they are eligible. In some cases they overestimate the amount they need. In other cases, they're convinced it will be in their best interest to borrow the money and reinvest it in something paying greater interest. Besides being against the terms of the loan (which say the money can only be used for school-related purposes), this manner of thinking is most often wrong. Loan rates hover in the 7 to 10% range. Investments paying more than that amount are usually risky and can jeopardize your long-term financial well-being.
Opt for family financing, if this is available. Although most graduate students are considered to be independent with respect to qualifying for federal financial aid, many families are still willing and able to assist in paying for education. This is especially true if families understand that their money reduces student debt. While parents or family members may be unable or unwilling to provide grant assistance, they may be willing and able to provide a loan, often with more attractive terms than federal and private loans.
Early graduation or summer school attendance is another way to reduce total indebtedness because you're completing your education more quickly than originally intended. You may take more courses per semester, or you may attend classes in the summer in addition to your semester schedule, although this option would reduce the time you are able to work during the summer.
You may, conversely, decide to enroll for less than a full semester of credits, thereby leaving time for yourself to work. Remember though, to qualify for most student aid you must be enrolled at least half-time, which is usually six credits per term. In some cases, students attending less than half time must begin paying off their loans immediately.
2. Financial Aid Eligibility
Eligibility for graduate school financial aid is based largely on the determination of what a student needs to attend a particular institution need-based aid. Most federal, state, and a great deal of institutional aid is awarded on the basis of need. Simply put, need-based aid eligibility is the difference between your cost of attendance and your financial resources. Resources may include such things as savings from summer earnings, earnings during the school year, spouse's earnings, and your savings.
Graduate programs for master's degree candidates may offer some need-based aid, but often they do not have adequate support to meet the full financial need of their students, and they expect their students to find their own ways of filling the gap in their aid packages.
For some fields of study, particularly in Ph.D. programs in arts and sciences at major research universities like Harvard, students could get merit-based aid in the form of grants to cover all of their tuition and living expenses. However, this level of funding, often committed for the duration of the degree program, sometimes as long as six years, is probably the exception, not the rule, at most universities.
There are also some fellowship programs available for certain groups of students. This so-called targeted aid is awarded to attract certain populations of students to study in an area where perhaps they have been underrepresented in the past. For example, the U.S. Department of Education has grants for minority students who plan to pursue a Ph.D.
There are also some special programs earmarked for certain groups of students. For example, the National Science Foundation offers fellowships for doctoral students studying in the natural, physical, biological, and social sciences. Ford Foundation Fellowships are available for minority students and women underrepresented in certain fields of study.
3. Federal Government Grants
As a graduate student applying for financial aid, you would like the bulk of your award package to be in the form of outright scholarships or grants because such money doesn't have to be repaid later. Of course, this isn't always possible, but there is some grant money out there, some of which may be available to you.
Federal Title IV Money. More than 8,000 colleges and universities take part in the U.S. government's Title IV financial aid programs. To qualify for this federal money--which can be used only for expenses related to attending school--you must first meet several requirements. You must be: enrolled at least half-time (six semester credit hours); a U.S. citizen or an eligible noncitizen; making satisfactory progress in your course of study; and neither in default, nor owing a refund for any federal aid you have received in the past.
For specific questions regarding Title IV federal financial aid programs, you can call the Federal Student Aid Information Center 1-800-4FEDAID.
Title IX Programs. In 1986 Title IXgraduate programswas expanded, and the 1992 reauthorization of the Higher Education Act made additional changes. The education amendments that will be made in 1997 and 1998 may well change these programs again. The current mood is to consolidate these programs into one or two categories. The purpose of Title IX is to foster and support graduate and professional education to provide incentives and support for U.S. citizens to complete doctoral degree programs leading to academic careers, especially women and students from underrepresented groups. It provides support for students from underrepresented groups to complete master's and professional degree programs.
Title IX includes the following programs:
- Grants to Institutions and Consortia to Encourage Women and Minority Participation in Graduate Education. These grants are made to schools to help them identify talented undergraduates who demonstrate financial need. With this grant, minority students and women have an opportunity to prepare for graduate fields in which they traditionally have been underrepresented.
- Patricia Roberts Harris Fellowship Program. These fellowships are awarded to schools to distribute to master's- and doctoral-level minority graduate students and women underrepresented in graduate fields. Fifty percent of the funds must be awarded to schools for master's and professional study, and 50% of the funds must be awarded for fellowships for doctoral study. Awarding priority is given to minority students and women pursuing master's-level study leading to careers in the public interest and to those entering doctoral study, particularly in the fields of mathematics and science.
- Fellowships in Areas of National Need. The National Need Fellowship Program has been in existence since 1988. Its purpose is to offer financial assistance to students enrolled in specific programs for which there is both a national need and a lack of qualified personnel. The annual definition of "national need" is determined by the U.S. Secretary of Education in consultation with other federal agencies as well as with nonprofit organizations concerned with doctoral education. Current areas include chemistry, engineering, mathematics, physics, and area studies. For students in good standing, fellowships may be renewed for a total of three years.
4. Federal Work-Study Programs
Federal Work-Study provides eligible students with employment opportunities, usually in public and private nonprofit organizations. Federal work-study funds pay up to 75% of your wages, with the remainder paid by the employing agency. Not all schools have Federal Work-Study funds and some limit their funding to undergraduates.
To qualify for Federal Work-Study, you must be a U.S. citizen, national, or permanent resident; be enrolled in a degree or certificate program, in most instances at least half-time (schools are allowed to use their work-study funds for students attending less than half-time, but most do not); and be making satisfactory academic progress as determined by the graduate school.
Each school sets its own application deadline and work-study earnings limits. The dollar value of a work-study award depends on your financial need, the amount of money the school has to offer, and the aid you receive from other sources. Wages vary and are related to the type of work done. Occasionally, schools use work-study funds to pay teaching and research assistants. Work-study students may work part time during the academic year and full time in the summer.
If you receive Federal Work-Study as part of your financial aid package, you can often use this award creatively to initiate or help shape a job that best suits your needs. This must be done skillfully and with the help and approval of the financial aid office. Consult this office to learn what job opportunities they currently have available, whether you are free to choose your own job, what the pay rates are, and what paperwork is required.