Graduate school financing takes planning, resourcefulness
The numbers from the Council of Graduate Schools are grimly familiar.
The average tuition and fees for post-graduate degrees soared 16 percent from 2003-04 to 2011-12, leading to 64 percent of students borrowing and leaving school with average of $36,000 in debt.
That doesn’t mean that a graduate degree is out of reach. It just takes more planning than it did a generation ago.
For some, such as Jason R. McDonough, that came easy. As a banker, finance is practically hard-wired into his DNA.
“The key to budgeting graduate school is to map out the entire program before you start,” said McDonough, a 30-year-old native of Springfield, Va. “You need to figure out how many credits you can afford, what the average cost of books, supplies, etc. will be, and then do your best to set aside funds from each paycheck to cover those costs for next semester.”
He admits that approach doesn’t come naturally to everyone. “I can imagine that for others it may be more difficult to come up with a structured approach to managing the costs of the program.”
That’s where the council’s initiative, in conjunction with financial services company TIAA-CREF, comes in. The goal of the three-year program is to teach students to handle their finances so that graduate school remains a viable option.
And because the debt load is beginning early—70 percent of undergraduates rely on loans, with an average $29,400 debt, according to Project Student Debt—so, too, is the program.
The council is working with 15 institutions, including the University of Maryland, Baltimore County, to learn more about students’ financial circumstances, family situations and existing debt. The next step will be crafting programs that help students figure out how to pay for a bachelor’s and beyond.
So far 13,000 students have been surveyed. Though researchers are just beginning to look at the data, early results are telling, said Daniel Denecke, an associate vice president with the council.
It appears that students rely heavily on peers for financial information, which means that social media strategies such as chat groups might help, Denecke said.
Students also turn to their families, but problems can arise if relatives aren’t aware of the intricacies of post-graduate financing, Denecke said. “How do you budget for a nine-month fellowship? What’s the impact of off- versus on-campus housing?”
While universities are great resources for this information, many students don’t know that, Denecke said. The key is finding ways to turn the schools into go-to sources.
Potential graduate students need to be aware of all the options for financing their degrees, from fellowships to teaching assistantships to employee assistance, Denecke said. “Graduate education does not necessarily mean graduate debt,” he said.
An early result of the council’s work is the website GradSense.org. Students will find loan calculators and budgeting tips. They’ll also be able to compare potential earnings versus potential costs.
For some students, a pricey degree will pay off. Others, though, are hesitant. “I cannot imagine paying $100K for an MBA,” said George Mason graduate student Toby Haggerty. “Although, of course, good for those who shoot the moon.”
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