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How to Pay for Graduate School

3 Ways to Pay:

  • 1. Gift money
  • 2. Federal loans
  • 3. Private loans

By Stephen Sellner | Citizens Bank Staff

Congratulations — you got into grad school! You’re taking a big step towards launching a career that you really care about.

Once the dust settles, you’ll want to figure out how you’ll pay for this life-changing education, whether it be medical school, dental school, law school, an MBA, or other program.

Fear not; here are three ways to pay for grad school:

1. Gift money

This is the best grad school financing out there for one simple reason — you don’t have to repay it! There are no interest rates, monthly payments, or any of that. This funding can come in a few different forms:

  • Personal savings
  • Scholarships
  • Grants
  • Fellowships
  • Assistantships
  • Tuition reimbursement from your employer

One caveat to this: Using personal savings to pay for grad school isn’t free in the same way a scholarship, or gift aid, is. That’s your money that, if used on grad school, won’t be available anymore. It just means there’s no cost of borrowing, which, when it comes to the price of grad school, is a welcome sight.

Grad school involves paying for more than tuition: there are living expenses like food, rent, utilities, and other everyday expenses that are facts of life. So the more you can use these savings or gift aid, the less you’ll have to take out in loans that you’ll repay for years to come.

2. Federal loans

Now that you’ve accounted for the free funding mentioned above, see what your remaining balance is. That’s the amount you’re bound to take out in loans.

Let’s start with your federal loan options when paying for grad school: the Direct Unsubsidized Loan and Direct PLUS Loan. Here are some key takeaways about each:

Direct Unsubsidized Loan

Direct PLUS Loan

Also known as…

Stafford Loan

Grad PLUS Loan

Type of interest rate

Fixed only*

Fixed only*

Credit check at application?



To qualify…

Must be enrolled at least half-time at eligible school in graduate program

Must be enrolled at least half-time at eligible school in graduate program




* All federal loans have fixed interest rates.

All federal student loans — including the unsubsidized and PLUS loans — have benefits like income-based repayment. That could be appealing if you don’t expect to make a high enough salary upon graduation when you have to start making full monthly payments.

Additionally, all federal loans — which are disbursed by the U.S. Department of Education — carry a fee, which is a percentage of the balance, and is taken out of the loan amount.

3. Private loans

For some, private student loans are a better option for grad students. That’s mainly because private loan interest rates are determined by creditworthiness; a good credit score could mean a lower interest rate than your federal loan alternatives. Plus, you can choose between a fixed interest rate and a variable one.

Private loans are distributed by banks, credit unions, and other financial institutions. Depending on the lender, you could have access to multiple repayment terms, like 5-year, 7-year, 10-year repayment. Many will offer different payment options, like deferred repayment, interest-only, or repayment of principal and interest. However, income-based repayment is not offered on private student loans.

Research multiple lenders to see which offers the interest rate and repayment term that will best fund your grad school program.

What to remember

Before seeking out lending options, see what cost-free funding options are available. Research scholarships and apply for everything (within reason, of course). See if your employer offers tuition reimbursement. Then, when all those funds are tapped, dive into whether federal or private loans are your best bet.

More information

Need help funding your graduate school adventure? Learn more about the Citizens Bank Graduate Student Loan with multi-year approval – apply once and it’s good until graduation.**

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