Financial Planning for Graduate School

Denison’s Financial Wellness Coordinator, Sam Smith, discusses financial planning for grad school.

Although not necessary for many professions, a graduate degree may be the crucial factor in landing a desirable entry-level position for those first entering the job market. Finding the right program requires a substantial investment of time and effort in researching schools and programs and determining interests and career goals. As with every aspect of graduate school preparation, the best course of action to take when it comes to funding your education is to investigate all options as soon as possible. There’s no way around it–graduate school is expensive, but tuition and other costs can vary substantially from program to program. Students need to be realistic about what they can afford and aware of how long it will take to pay back the loans. Students must additionally consider the types of financial aid available for various programs and the work-study or assistantship opportunities that may exist.

Many graduate students will need to borrow money to pay for school. Federal loans are a good starting point. If you already have student loans it is important to know both the total loan amount you will conclude with after receiving your graduate degree and what repayment options are available. If you are unsure of your current student debt, you should contact the Financial Aid Office for that information. The three most common sources of federal graduate student loans are Stafford, Graduate PLUS Loans, and Perkins. Grants, scholarships and fellowships are funds available for a student’s education that do not have to be paid back. Most grant programs are need-based, while scholarship programs may be either need- or merit-based. Fellowships are almost always merit-based. Application for federal grants and some school grants require submission of the FAFSA form. Information regarding finding and applying for fellowships and scholarships can be found on the U.S. Department of Education Federal Student Aid website. Lastly, other good sources of funding are teaching/research assistantships and campus work-study programs.

Once you have your plan for financing your grad school education, what about everything else? It’s important to establish the rest of your grad school budget. One way to begin is to divide your finances into three areas: needs, wants, and savings. A general rule of thumb is 50% of your money should go to needs, 30% to wants, and 20% to savings. Needs are expenses that must be paid on a regular basis such as rent. Wants are discretionary spending for things like restaurant eating, and savings can mean different things based on your situation. For a grad student, savings might just be building emergency funds. Remember, the details of this plan may be right for some but not everyone. You can create your own ratios across needs, wants, and savings. Grad school is a special life circumstance, and some students may need to live on a low stipend for a limited period of time and adjust this formula. The most important habits are planning, setting goals, and setting a budget. Life only becomes more complicated, and the earlier you begin budgeting and managing your spending, the easier it will be after college. The Financial Wellness Office is here to help you begin that journey whether through one-on-one coaching sessions, access to resources, or free online financial literacy programs. Please visit our page on MyDenison for details.

Samantha Smith, Financial Wellness Coordinator