How to Pay for Grad School in 2025

The average cost of a master’s degree was $62,820 in 2024, according to the Education Data Initiative. But the cost of graduate school can vary by school, type of degree and program.

Regardless of which university’s name will be on your diploma, you may need to pay for your degree with graduate student loans.

But before taking on debt, use these strategies to reduce how much you borrow.

Start with money you don’t have to pay back. One of the first steps to applying for scholarships, fellowships and need-based grants is to fill out your Free Application for Federal Student Aid, or FAFSA.

Once you’ve submitted your FAFSA, take time to research other sources of funding:

Scholarships

Many schools and private organizations offer scholarships that cover a portion of graduate education costs. Some are awarded to students who did well in their undergraduate degrees, known as merit-based scholarships.

Other scholarships are awarded to underrepresented individuals, such as students who identify as Hispanic or LGBTQ+. Look for scholarships that have more requirements outside of just having a good GPA to find ones that have less competition.

Some students who identify as a minority are more likely to take on student debt to pay for graduate school than white students. If you identify as a minority, look for school-based scholarships or funds from organizations and non-profits that award money to students who identify like you.

If you identify as a minority in more than one way, such as Black and bisexual, research individual scholarships for both of those identities to improve your chances of receiving funds.

Check the Department of Labor’s Scholarship Finder or National Association of Student Financial Aid Administrators’ state-based scholarship search tool to find programs.

You can also contact your school’s financial aid office and department head about specific scholarship programs you may be eligible for.

Fellowships

Fellowships are similar to scholarships in that they can help you pay for school. However, fellowships are always merit-based and geared specifically to support grad students as they complete research.

Some universities offer fellowships to graduate students regardless of their area of study. Contact your financial aid office about school-based fellowships that you might qualify for.

You can search online for fellowships for your specialization as well. For example, a psychology grad student could apply for fellowships from private non-profit organizations, as well as federal institutes, such as the National Science Foundation and National Institutes of Health.

Fellowships might specify if they are for students pursuing research-based or theory-based degrees. The Zintellect database lets you search by state, area of study, school, citizenship status and more.

Grants

There are also grants for students who demonstrate financial need or are pursuing careers in certain fields, usually provided by the government or private organizations or companies.

For example, the federal TEACH grant is available for applicants who agree to teach low-income students in a high-need subject area for at least four years after graduating, among other requirements.

Some grants support graduate students meeting more specific criteria, such as being a child of an immigrant.

You can contact the department of education for your school’s state to learn more about state-based grant opportunities.

» MORE: Guide to grants for college

Graduate assistantships and the federal work-study program offer two opportunities to work part-time through your school while you earn your grad degree. Both types of aid are offered by your university.

Assistantships typically involve teaching or researching on campus. They’re awarded through your school or department and generally don’t require you to show financial need.

A work-study job can be on- or off-campus, involving work related to your degree, when possible. Work-study usually requires you to show financial need through your FAFSA.

If you’re open to working full-time while you earn your degree, see if your employer can help cover your tuition costs while you’re enrolled in a part-time or online graduate program. Programs like tuition assistance — sometimes called tuition reimbursement — help employees pay for degrees while they are working for a company.

Some tuition assistance programs require you to pay expenses at the start of a semester, and then your employer pays you through the program only after you’ve completed your courses. You’ll likely need to sign up before starting a semester’s courses, so ask your employer about details if you want to go this route.

If your employer participates, it can pay up to $5,250 each year for your college expenses before you have to pay taxes on the money.

If the cost of grad school is making you hesitate, consider giving yourself time to save money before starting a program. This can significantly reduce the amount you have to borrow in student loans.

If you plan to save before you go back to school, try not to put this goal before other priorities like an emergency fund and retirement savings.

We recommend these ways to save money, which include budgeting, setting up automatic transfers to a high-yield savings account and many other big and small changes.

It may not be realistic for you to save up your entire grad school tuition ahead of time. But waiting to start a program while saving money can help you prepare for the cost of a graduate degree.

Taking out student loans for grad school is best when used as a last resort, but many graduate students need them to cover their remaining college expenses.

Federal student loans

If you still need to cover costs after exploring the options above, turn to federal student loans before private loans. These loans offer benefits like income-driven repayment plans and loan forgiveness programs that private loans lack.

You can take out up to $20,500 annually in unsubsidized federal loans and $100,000 total. (These limits are higher for professional and medical students.) Subsidized loans for graduate school aren’t available. If that’s not enough to cover your remaining grad school costs, you can borrow additional loans.

Graduate PLUS loans are federal loans that let you borrow up to the cost of attendance minus other aid you’ve received. Graduate PLUS loans come with an origination fee that most private lenders don’t charge.

Note that grad PLUS will no longer be available for students starting their program on or after July 1, 2026.

Private student loans

Private loans may make sense if you won’t use federal benefits and have excellent credit — or a co-signer who does. But you’ll want to compare the private loan interest rate you’d qualify for to what PLUS loans offer to see which offers a lower rate.

You typically don't have to pay student loans during graduate school if you're enrolled at least half-time. But interest will accrue on all graduate student loans, increasing the amount you owe.