Saving for Graduate School as an Undergraduate

Professionals with a graduate degree typically earn higher salaries than those with only a bachelor’s degree. In fact, a graduate degree translates into $12,000-$30,000 more in median earnings each year. However, graduate school is a major investment. On average, students spend around $25,000 on a master’s degree.

Students should start thinking about how to pay for graduate school as soon as possible so they can start planning their finances accordingly.


  • Start Saving for Graduate School Early

    Students should start saving for graduate school early. Planning ahead means more time to apply for scholarships, fellowships, and grants. Some graduate fellowships only accept applications from juniors and seniors in college, so waiting too long means missing out on opportunities.


  • Research Schools and Programs Early

    On average, graduate students spend nearly $25,000 on their degree, and some programs cost much more. Researching programs early helps prospective applicants find a program that fits their budget. On top of tuition, students should factor in the cost of standardized tests, like the GRE or GMAT, application fees, books, and living expenses.

    Additionally, tuition costs might increase by the time undergraduates enter graduate school, so students should factor this prospect into their plans to pay for graduate school.


FAFSA and Financial Aid

Graduate students often qualify for federal student aid programs, including grants, loans, and work-study programs. To receive federal aid, students must submit the Free Application for Federal Student Aid, or the FAFSA. Graduate students automatically qualify as independent adults, so applicants do not need to provide parental financial information.

Federal aid for graduate students differs slightly from undergraduate aid programs. Graduate students do not qualify for Pell Grants or subsidized loans. However, they can borrow PLUS loans or unsubsidized loans, apply for TEACH Grants, and take work-study jobs.

Look for Job Opportunities


  • Graduate Assistantships

    A graduate assistantship functions like a part-time job. Graduate assistants provide teaching and research support for faculty members in their department. They may teach sections in large lecture classes, grade papers and exams, and assist faculty with research projects. Most assistantships require no more than 20 hours of work each week.

    At many universities, a graduate assistantship includes a tuition waiver and a monthly stipend. Some programs pay graduate assistants an hourly rate.


  • Fellowships

    A graduate fellowship covers tuition costs and often includes a monthly stipend. Universities, government agencies, and private foundations offer graduate fellowships. Unlike graduate assistantships, fellowships typically do not come with work requirements.

    Many university fellowships only apply to doctoral students in certain disciplines. The National Science Foundation offers graduate research fellowships, as does the Fulbright program. Fellowship opportunities vary depending on the discipline, so students should research opportunities in their field.


  • Full-Time Jobs With Tuition Benefits at Universities

    Many colleges and universities offer tuition benefits as an employee perk. For example, at the University of Washington, faculty and staff participate in the State Employee Tuition Exemption Program, which pays for around six credits per term. However, the program does not apply to hourly staff, and some employees must complete a six-month probationary period before using the program.

    University tuition benefit programs come with different requirements and probationary periods. While some programs apply to part-time employees, others only fund full-time employees taking classes at the school.


  • Full-Time Jobs With Tuition Benefits Elsewhere

    More than half of employers offer tuition assistance programs, according to a 2019 report from the Society for Human Resources Management. These programs typically reimburse employees for up to $5,250 in educational expenses each year. Researching employers that offer tuition assistance programs as an undergraduate can make a big difference when paying for grad school.


Saving for Graduate School With Budgeting



Graduate students pay for around a quarter of college costs out of pocket. Creating a student budget as an undergraduate can help students with saving for grad school. Budgeting particularly helps working students control their expenses and set aside money for graduate school.

529 Plans

A 529 college savings plan offers tax-advantaged savings for educational expenses. While most people think of 529 plans as a way for parents to save money for their children’s college costs, students can open their own 529 plan and make contributions to pay for graduate school.

In some states, 529 plans provide tax discounts. And in every state, the money grows without taxes, making a 529 plan a great vehicle for college savings.

Loan Forgiveness



More than half of graduate students borrow money when paying for graduate school, and 49% of graduate students who take out federal loans expect them to be forgiven. However, borrowers must meet specific requirements to qualify for loan forgiveness.

The federal student aid program offers several loan forgiveness and cancellation programs. The most common programs include the public service loan forgiveness program and the teacher loan forgiveness program. Both programs set employment standards for borrowers. For example, teacher loan forgiveness waives up to $17,500 in loans for educators who work in a low-income school.

Borrowers often make payments on their loans for 5-10 years or more before qualifying for forgiveness, so students should budget for those payments.

Portrait of Genevieve Carlton

Genevieve Carlton

Genevieve Carlton holds a Ph.D. in history from Northwestern University and earned tenure as a history professor at the University of Louisville. An award-winning historian and writer, Genevieve has published multiple scholarly articles and a book with the University of Chicago Press. She currently works as a freelance writer and consultant.

See more articles by Genevieve

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