Looking to Save for Grad School? Here's How

Free tuition helped a new school lure Xenia Tashlitsky.

Universities desperate for cash are raising tuition for their graduate programs so that the average in-state public program now costs about $30,000 a year (including living costs). Private colleges average about 30 percent more per year.

Meanwhile, economic troubles have forced cutbacks among many of the traditional sources of grants and other free money for graduate students. Universities themselves had been one of the biggest funders of graduate student aid, providing tuition assistance to about two thirds of Ph.D. students and 20 percent of master's students. No more. The majority of public universities are reducing graduate student support because of budget cutbacks. And even the richest, most generous private universities are reducing opportunities for graduate students. Yale, suffering from a plunge in its now $16 billion endowment, announced in early 2010 plans to reduce the number of graduate seats by more than 10 percent. 

[Browse the Paying for Graduate School Guide.] 

Employers, who had subsidized tuition for about 25 percent of master's students in recent years, have been pulling back as well. Boeing, for example, which long offered generous tuition benefits to its workers, has announced that starting this year, it will underwrite tuition for "strategic" courses only. The percentage of executive M.B.A. students receiving support from any employer has been falling, business schools report.

The unhappy result for many graduate students—especially those in professional schools—is that they have little choice but to use loans to fund their studies. Nearly 90 percent of medical students, for example, need student loans. About three quarters of those pursuing a master's in architecture borrow. Even one third of all Ph.D. students end up having to borrow each year.

Still, thousands of graduate students are taking advantage of more hopeful developments to fund graduate school without going broke. Some are applying to new federal and school programs offering more science research grants and forgivable loans. And some students, such as former para­legal Xenia Tashlitsky, are smartly exploiting the intensified competition for students among some graduate programs. Tashlitsky applied to several law schools to give herself plenty of options. When the acceptances rolled in, she could have attended some big-name schools like Cornell University or the University of Chicago—if she'd been willing to borrow more than $100,000. Or she could take a chance on a brand-new law school being started by her alma mater, the University of California–Irvine, which was luring pioneer applicants with the promise of free tuition. "It might not have made its name yet across the country," Tashlitsky admits, but UCI has recruited some top professors. She believes the staff will work hard to help the students who gambled on the unproven school. "What happens to this class is going to establish the reputation of the university," she says. Since she wanted to live and work in the area eventually, she opted to stay close to home and start her career without the pressure of big debt payments.

While most graduate students aim for grants or scholarships, school officials point out that discounts, tuition waivers, or assistantships can be easier to land and have the same—or even better—impacts on a student's checking account and career. Financial aid counselors and savvy graduate students like Tashlitsky say there are at least 10 techniques to cut tuition costs and debt loads.

1. Go for research: Most Ph.D. students get at least some grants or assistantships to fund their studies. Many science and technology-related fields are bucking the budget-­cutting trend and enjoying increases in graduate funding. The Obama administration has increased funding for National Science Foundation grants, for example.

2. Encourage schools to compete for you: Apply to a few schools where your grades, test scores, and selling points are better than those of current students. Even top-10 ranked M.B.A. programs, such as the University of Chicago Booth School of Business, "compete very aggressively for the best candidates. That could be in the form of merit grants or outreach by faculty or alumni," says Rosemaria Martinelli, associate dean of student recruitment and admissions. (She recommends, however, that even wooed students choose their program based on fit, not price.)

3. Apply early: Graduate deans typically like to lock in attractive candidates early, so there's often little aid money left for late applicants.

4. Consider unconventional upstarts: Investing your time and money in a program that doesn't provide a good education or impress employers is a waste. But those willing to take chances on new programs can find bargains. The year-old UC–Irvine School of Law that Tashlitsky is attending is offering half-tuition scholarships to all students entering in the fall of 2010. Penn State–Brandywine is charging just $16,000 for its three-year-old medical school preparation course with online lectures and bimonthly labs. (Tuition, plus room and board at a traditional, campus-based med school prep course, such as the one at Goucher College, costs about $40,000.)

5. Call your alma mater: A few schools, such as Worcester Polytechnic Institute and Northeastern University in Boston, offer alums discounts on some kinds of graduate classes.

6. Shop around: The University of Kansas's well-regarded graduate program in education cost Kansas residents only about $255 per credit hour last year. That's much less than similarly ranked private schools and is even significantly less than the prices in-state residents pay at other highly ranked public universities, such as Michigan State.

7. Search for in-state tuition: Some public university graduate programs make it easy for out-of-staters to pay in-state tuition. For example, residents of states belonging to an academic common market, such as the Southern Regional Education Board, can get discounts on tuition at scores of graduate programs in their regions.

8. Ask the boss: Economic troubles have reduced employers' support of graduate study. But many consulting firms, multinational companies, and government agencies still provide education benefits. And some graduate programs, such as those offered by the for-profit Capella University, offer small discounts to applicants from certain employers.

9. Search for schools with financial aid rules that match your circumstances: Most graduate programs offer scholarships based only on merit, as measured by such things as high grades and test scores. But a few dozen programs offer grants based solely on the admitted students' low incomes. Need-based scholarship programs require students to fill out not only the Free Application for Federal Student Aid but often other applications, such as the Need Access form or the College Board's Profile. In addition, many medical schools, for example, expect the parents of all students—no matter what the student's age—to contribute to tuition. Many other graduate schools, however, typically don't expect parental contributions for students who are at least 24.

10. Ask about work: The toughest and most intense professional graduate programs usually bar students from working, which means students have to fund living expenses as well as tuition. But some programs, such as the University of Nevada–Las Vegas's business school, assist students trying to balance jobs and school. "We work it out informally" with the many students who have evening jobs at casinos and the like, says Gordon McCurdy, director of UNLV's M.B.A. programs. Other graduate programs go even further and help students land campus jobs. The Georgia Institute of Technology's graduate business school, for example, offers research assistantships, which come with tuition discounts and small paychecks, to the top one third of admitted students.

Veteran graduate students say that even if a student isn't offered a job on admission, it's often possible later to find campus jobs that significantly defray the cost of tuition. Benjamin Bolger, who has worked his way through 10 master's degrees and one doctorate, said he cold-calls professors in fields he has studied before the start of a semester to see if there are any last-minute assistantship openings. He once took a tutoring job at one of Harvard's residential houses because it paid in the form of free meals. The key, says Bolger, is balance. "If you spend too much time working and skip the time you need to work on your own studies, you will be making a strategic error," he says. "You will spend a lot of time in the library, and you will spend a lot of time—perhaps more than you expect—working to support your studies. But it is all worth it."