How to Get Financial Aid for Grad School

Cathi Blair took out a federal loan. After five years' teaching, most of her debt will be canceled.

Berkeley grad student Doug Spencer helps manage an apartment complex in return for reduced rent.

Top dollar. Many professionals don't need these repayment programs, however, because their degrees pay off so handsomely. Although physicians these days leave medical school with about $100,000 in debt, most can easily make the monthly payments of $800 to $1,300 (the higher payments eliminate the debt within 10 years) once they start work. Likewise, Forbes magazine calculates that M.B.A. holders from the top 100 business schools typically get such big raises that they earn their grad school outlays back in just four years or so.

Of course, there are plenty of students—those in, say, social work or the humanities—for whom an investment in grad school returns little financial profit. But, says Kevin Murphy, an economics professor at the University of Chicago who has studied returns on education, money shouldn't always be the deciding factor. "I hate to see people get discouraged," says Murphy, who won a MacArthur "genius" prize in 2005. "Education gets you a lot more than earnings.... You should go for a master's in poetry if you enjoy it."