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Figuring out how to save money for grad school can feel overwhelming, but it doesn’t have to be. In fact, it’s possible to save for grad school without picking up a side hustle or taking on more debt — if you plan ahead and adjust your current budget.

Here’s how to save money for grad school and help make it more affordable.

Strategies to Save Up for Grad School

1. Splitting Up Your Paycheck

If you are currently working and get regular paychecks, one of the simplest ways to start saving for grad school is to automate as much of the process as possible. If your workplace has direct deposit, you could contact HR and see if you are able to add another bank account, and designate a certain amount from every paycheck to go into your savings account.

It can be as much or as little as you’d like, but putting the money directly into savings makes it harder to spend right away. By automating your savings account, you eliminate the hassle of manually parting with it.

If your company doesn’t offer the option to split your paycheck to multiple accounts, you can contact your bank directly or check online to see if they offer a recurring transfer. Banks are typically able to set up transfers for you automatically on your payday.

To decide how much to save for grad school, review your monthly budget before starting. If you don’t have one, put one together.

2. Opening a Separate Savings Account

While you shouldn’t necessarily open a new account for every savings goal in your life, as that could get messy fast, setting up a new, separate savings account with your bank for grad school is another way to potentially maximize your money.

Opening a new account with a specific goal of how much to save for grad school could help you keep track of the goal and make your progress tangible. Having a separate account specifically for school can also help you manage and keep track of spending on books and other school-related costs.

These first two ideas can work together to get you progressing on your savings goal. It can be intimidating to commit to allocating some of your budget for savings, but if you make the process regular and automatic, you may be surprised to find how little you miss that extra cash.

3. Don’t Forget Financial Aid

The Free Application for Federal Student Aid is not just for student loans—you could also receive work-study and grants by filling out the FAFSA®. Just like undergraduate applications for federal financial aid, students must demonstrate need, be a U.S. citizen or eligible noncitizen, and be enrolled or accepted as a regular student pursuing a degree beyond a bachelor’s.

However, when graduate students fill out the FAFSA, they may be considered independent, meaning their parents’ income is no longer taken into consideration.

Recommended: Independent vs Dependent Student: Which One Are You?

For some people, this might actually mean they are eligible for more financial aid as an independent individual. The amount a student is awarded will be based on factors including their income and financial assets. Students cannot be in default on a prior student loan to be eligible for additional aid.

Regardless of dependency status, graduate students may be eligible to receive PLUS Loans. These unsubsidized loans can be taken out in amounts up to the cost of attendance, but be aware you can’t have an adverse credit history to qualify.

There’s also the option of financial aid that isn’t typically repaid, in the form of scholarships or other grants, or scholarships from your state based on field of study, interest, or school type.

File your FAFSA as soon as possible after October 1, the year before each enrollment period. Since there are limited funds, the sooner you file, the better chance you may have of getting the most aid possible.

4. Checking With Your Current Employer

Even if you are not in a career where your employer is expected to pay for a graduate degree, a lot of companies may offer some contribution to ongoing education if it’s possible to show that it will be relevant to your job.

Tuition reimbursement varies depending on your company and industry, but some may offer tuition assistance to their employees. While it might not cover your entire graduate school cost, a tuition reimbursement benefit from your company could significantly lower the amount you need for school, which in turn could lower your dependence on loans.

If you have existing student loan debt from your undergraduate education, check to see if your company offers employees a match (up to a certain amount yearly) on payments made toward student loan debt every year. In this way, employers can make a regular contribution to help with your student loan balance, while you make your regular payments, too.

5. Considering Schools Abroad

Schools in Europe, South America, and Africa may be significantly less expensive than universities in the United States, which can help with saving for grad school. But, before enrolling in graduate school abroad, make sure you understand how your industry will accept and transfer over any foreign degrees. You’ll want to make sure that your grad school degree is a decent ROI.

While the cost of living might be higher in some other countries, international graduate programs can also save you time; some PhD programs in Europe are only three to four years, as compared to six or seven in the U.S.

6. Refinancing Current Student Loans

If you are currently paying off undergraduate student loans, the idea of juggling paying for grad school and paying off undergrad loans may seem daunting. It’s helpful to get your current debt situation under control before saving for grad school. One option you might want to consider that could potentially result in monthly savings is student loan refinancing.

Refinancing your student loans could possibly result in a lower interest rate, which could mean lower monthly payments (depending on the loan term), potentially freeing up room in your monthly budget. A lower interest rate might also mean spending less money over the life of the loan. Note: You may pay more interest over the life of the loan if you refinance with an extended term.

However, it’s important to know that loan refinancing means you’re no longer eligible for federal student loan forgiveness, deferment, and income-driven repayment.

A lower overall interest rate could help you with your goal of saving money to pay for graduate school, helping to make your savings goals more manageable as you embark on this exciting next step in your career. A student loan refinance calculator can help you figure out if refinancing makes sense for your situation.

The Takeaway

Graduate school doesn’t necessarily mean taking on more debt. Those looking to focus their savings plan for graduate school can review their monthly budget and automate as much of their savings as possible.

Additional options to pay for college include federal student aid including federal student loans, scholarships, grants, and work-study. Some students may even consider pursuing their graduate degree abroad to attend a more affordable university. And refinancing is an option that could help some students with undergraduate loans reduce their interest rate.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

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The main reason for refinancing student loans with a private lender is to combine your loans into one new loan with a lower interest rate. If you extend the loan term and get a lower student loan interest rate, your monthly payment will go down. Another option is to shorten your loan term, which will allow you to pay potentially thousands of dollars less in interest over the life of the loan.

Reduce Your Interest on Student Loans

Consolidating multiple student loan balances into one new loan with a low interest rate can be ideal for those looking to reduce the amount they owe in interest. It’s important to note, though, that if you refinance federal student loans, you lose access to federal benefits such as student loan forgiveness.

Getting approved for student loan refinancing isn’t just a matter of submitting an application. You need a game plan — one that will help you become a strong loan candidate, who’ll land a quick “yes” and a lower student loan interest rate. Here are five ways to get a lower interest rate on student loans.

5 Point Plan for Getting a Low Interest Rate

1. Check your credit.

If you want to reduce your student loan interest rate through refinancing, the first thing you should do is check your credit score. The better your credit profile, the less risky you appear to lenders. If your credit profile is solid — meaning you have a decent credit score and a low debt-to-income ratio — lenders should offer you their best rates.

If, however, your credit profile isn’t quite where you want it to be, that’s OK. Take a few months to build up your credit and reapply for student loan refinancing down the line to see if you qualify for a better rate.

Recommended: Why Your Debt to Income Ratio Matters

2. Take a hard look at your cost of living.

Some cities are more expensive to live in than others. Someone renting an apartment in a small Midwestern town, for example, has lower living expenses than someone who owns a row home in San Francisco. Cost of living ties directly into your debt-to-income ratio, and therefore matters when you want to get a lower interest rate on student loans.

To some extent, this is out of your hands; your zip code helps lenders determine your cost of living. But anything you can do to pay down debt and make choices that free up more cash—such as renting a smaller apartment, taking on a roommate, or leasing a cheaper car—can help your case.

3. Give lenders a complete history.

Some student loan refinancing lenders consider things like where you went to school and how you’re doing professionally when they weigh your application. Provide as much information as you can when it comes to your undergraduate and graduate degrees.

Be sure to also include all relevant work experience. Again, if you can show lenders that you have a solid work history and your income has steadily increased, you will appear less risky. The less riskier you are to lenders, the better your student loan interest rate will be.

If there’s a job offer on the horizon, be sure to submit your offer letter with your application. And if you get a promotion while your application is under review, notify the lender immediately. If you’re in line for a promotion that will positively affect your paycheck, wait until that’s materialized before you apply.

4. Show all your income.

When lenders ask for income information, they mean all of your income, not just job earnings. List dividends, interest earned, bonuses, and the extra money you make from your side hustle or Airbnb rental property. As long as you can prove these income sources, it will all count towards your debt-to-income ratio and help to lower it. And again, the lower this ratio, the better chances you have at qualifying for a low student loan refinance rate.

The higher your income, the more cash you have to throw at the refinancing equation.

Also, make sure your driver’s license is current and that your student loan statements are all correct. If you’re self-employed, wait until you’ve filed your taxes to apply for refinancing—it’s the easiest way to prove the previous year’s income.

5. Be flexible.

If you have a number of student loans and you’re not offered the best rate when you apply for refinancing, consider refinancing only a couple of them. You may snag a lower interest rate with a smaller refinance balance. You can always apply for the full balance down the road after you’ve received a raise or moved to a less expensive location.

Being flexible also means you might want to think about asking a friend or relative for help if your application isn’t as strong as you’d like. When you refinance your student loans with a cosigner who has a good credit profile and low debt-to-income ratio, you may be able to get a lower rate than if you refinanced on your own.

Refinance Student Loans With SoFi

The stronger you are as a student loan refinancing candidate, the better your chances are of getting the best student loan refinance rate possible. To get the lowest rate when refinancing, check your credit, take a close look at your living expenses and debt-to-income ratio, give lenders a complete history of your education and employment, make sure to include all of your income sources in the application, and finally, be flexible, even if that means applying with a cosigner.

Keep in mind, though, that if you choose to refinance your federal student loans with a private lender, you lose access to federal benefits, such as student loan forgiveness and income-driven repayment plans. Make sure you don’t plan on using these benefits now or at any point in the future before deciding to refinance.

If you do think a student loan refinance may be in your best interest, consider SoFi. SoFi offers competitive rates and does not charge any origination fees. It takes just a few minutes to see your rates, and your credit score will not be affected when you prequalify.

FAQ

Can you negotiate your student loan interest rate?

Not necessarily. Rates are determined by both the market and your credit profile, leaving little room for negotiation. You can, however, present your lowest offer to another lender to see if they will match that.

How can I get a lower interest rate when refinancing my student loans?

You can get a lower interest rate when refinancing student loans by building your credit profile, having a reliable source of income, and making sure your debt-to-income ratio is low.

Is it possible to get lower rates when refinancing student loans?

Yes, it is possible to get a lower interest rate when refinancing student loans. Your student loan interest rate will depend on current market rates, your credit profile, and your debt-to-income ratio.

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

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When it comes to getting a secure, well-paying job, it’s not always necessary to get a college degree first.

Some students may choose a career training program to learn the necessary skills for a specific job, often more quickly and for less money than a four-year college degree. These programs may also be referred to as career certificate programs, usually certifying the students to work in a particular role once the course is completed.

Recent high school graduates or those who have attained their GED can often attend career training programs and get started on their careers after receiving their certificate.

Why Do People Choose Career Training Programs?

Two big factors in choosing to go through a career training program before or instead of going to college are time and money.

Career training programs typically can be completed in less time than it generally takes to complete an undergraduate degree. Some programs can be finished in as little as four months.

In addition, they’re also less expensive, which may mean that students have less student loan debt. On average, a career certificate program may cost around $100 per credit. By comparison, the average annual cost of in-state tuition at a public two-year institution is $3,862, and at a public four-year college, the in-state tuition averages $9,377 a year.

For instance, at Minnesota State University, certificate programs consist of nine to 30 credits, which can be completed in one year or less of full-time study. If these programs cost the average $100 per credit, they would cost between $900 and $3,000. This is fairly affordable compared to the cost of tuition at either a two-year or a four-year institution.

Another reason some people choose a career training program is that they need to, or would like to, start earning money relatively soon after graduating high school. And that way, if they borrowed money to help pay for their certificate program, they can put more money toward student loans to pay them off.

A career training program could be a more direct route to employment than getting an associate or bachelor’s degree for people who are sure about their career path. This could also be a beneficial route for students who want to save money to attend college later in life.

Choosing a Program

The most important thing to look for when choosing a career training program, whether it’s in-person or an online career training program, is accreditation. Accreditation verifies that an institution is meeting a certain level of quality. Usually, a certificate will need to come from an accredited institution for it to be considered legitimate.

Accreditation is done by private agencies, and most programs or institutions will list accreditations on their website.

The most up-to-date accreditation information can be found in the database of postsecondary institutions and programs compiled by the US Department of Education or with the specific accrediting agency’s website.

Once it’s clear that the potential programs are accredited, students can begin to narrow down which one will be best for them. This will be a highly personal choice, but there are a few factors worthy of attention, including cost, course length, and type of instruction (online vs. in-person).

Job search assistance—which might include resume writing workshops, job fairs, or interview prep—is another element that may help set students up for success.

Top Paying Jobs For Certificate Holders

In addition to career training programs having the potential to save students time and money, people want to know that they’ll be able to make a good living with those jobs. They also want jobs that can help pay off any money borrowed for school.

These are some of the highest paying jobs for those opting to go through a career training program:

1. Web Designer

According to the US Bureau of Labor Statistics, the average annual income for a web designer is $78,300, with the educational requirements ranging from a high school diploma to a bachelor’s degree. This job is growing faster than average, so it has a promising future.

2. Paralegals and Legal Assistants

Paralegals and legal assistants make, on average, $56,230 per year. The required education for an entry-level job as a paralegal is a certificate or an associate degree. This job is also growing at a rate much faster than average, showing great potential for a long-term career.

3. Solar Photovoltaic Installer

Solar panel installation is a growing field with decent pay and a lot of projected growth for the future. The median annual pay is $47,670, with only a high school degree or a certificate required to begin working.

4. Licensed practical and licensed vocational nurses

Training to become a licensed practical or licensed vocational nurse typically takes only one year of full-time study, and the median annual salary is $48,070. This job is growing as fast as average and is in a field that will certainly always exist. This could be a good choice for someone who wants to be in the medical field without the time and financial commitment it takes to become a doctor.

5. Medical Records Technician

Working as a medical records technician usually only requires a certificate, and sometimes an associate degree. This job has a median annual pay of $46,660 and the potential to work from home.

6. Pharmacy Technician

The median pay for a pharmacy technician is $36,740 per year. This job is growing at an average rate and typically requires on-the-job training or a formal training program, most of which last one year. Some longer pharmacy tech training programs culminate in an associate degree.

7. Computer Support Specialist

The role of a computer support specialist can vary widely, which means the educational requirements may also vary. Some jobs in this field may require a bachelor’s degree, but others may only require an associate degree or a certificate. The median annual pay for a computer support specialist is $57,910, and the field is growing as fast as average.

8. Phlebotomists

Phlebotomists draw blood and may work in hospitals, labs, or doctors’ offices. Professional certification, which can be gained after completing a phlebotomy training program, is the credential generally preferred by employers. This job has a median annual pay of $37,380 and it’s growing much faster than average.

9. Medical Assistants

Medical assistants have a median annual pay of $37,190 and the job only requires a certificate or on-the-job training. This job is growing much faster than average.

10. Wind Turbine Technician

The median pay for this job is $56,260 per year and the only education required is a training certificate through a technical program. This job is growing at a rate much faster than average, which could make it a great choice for students who are ready to start their career shortly after graduating high school.

Paying for a Career Training Program

Just because career training programs are typically less expensive than college doesn’t mean they’ll be easy to pay for. Some programs last longer than others and could end up costing a fair chunk of money. Here are some ways to help cover the costs.

Pay for it. One way to pay for a career training program is to save up the amount of money needed before starting it, especially if the program is short or has a lower cost. Paying in full with cash means no debt to worry about.

Financial aid. Another potential way to pay for a career training program is to apply for federal student financial aid, which may be available to students enrolled in eligible degree or certificate programs and who meet other eligibility requirements. Completing the Free Application for Free Application for Federal Student Aid (FAFSA) is the first step. After submitting the FAFSA, students will find out if they’re eligible for federal student aid, which could include federal student loans and/or work-study.

Scholarships. Students who aren’t eligible for financial aid or those who can’t cover tuition costs may want to look for scholarships. There may be fewer scholarships available for certificate programs than there are for degree programs, but they’re out there.

The best place to start looking for scholarships is with the school the student is attending. Some schools set up their own scholarships. Alternatively, students can search for scholarships offered by professional organizations in their related fields.

Private student loans. A private student loan may be another option to cover the cost of a career training program.

One of the basics of student loans is that loan terms will vary from lender to lender, and applicants are encouraged to shop around. It also makes sense for students to exhaust all federal student aid options before considering private student loans.

Learn more about how private student loans work with this private student loans guide.

Student loan refinancing. If you took out student loans and the payments are difficult to manage, or you’d like to get a lower interest rate, you can look into refinancing student loans.

One of the advantages of refinancing student loans is that you may be able to qualify for more favorable terms or a lower rate, which could help you save money.

Just be aware that when you refinance federal student loans, you lose access to federal protections and programs like income-driven repayment plans. Be sure you don’t need those benefits if you choose to refinance.

The Takeaway

Students can be under a lot of pressure to go right into a four-year college or university after graduating high school, but career training programs provide an alternative that can also set them up for success, typically in less time and for less money.

There are a number of options to help pay for a certificate training program, including saving up for it, applying for federal student financial aid, looking for scholarships, and taking out a private student loan.

If you have student loans and you’d like to get a more favorable rate or better terms, consider student loan refinancing. SoFi offers loans with low fixed or variable rates, flexible terms, and no fees. And you can find out if you prequalify in two minutes.

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

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College students who took out federal student loans and graduate, withdraw, or drop below half-time enrollment must complete student loan exit counseling. Student loan exit counseling, or FAFSA exit counseling, helps students better understand their federal student loans and what their options for repayment are.

What to Expect With Student Loan Exit Counseling

Depending on your school, students typically complete their exit counseling online or through an in-person meeting with a counselor at the school’s financial aid office. Schools may also offer online counseling programs to review all of the important information regarding paying back student loans. Each student should check in with their school’s website to find out their options.

How Long Does Exit Counseling Take?

Generally, student loan exit counseling takes about 30 minutes if completed online. If the student meets with a counselor or has specific questions, it might take longer. Although no one usually loves sitting through a presentation about financial planning, it’s a great idea to take advantage of the learning and soak up as much knowledge as possible.

Recommended: 9 Smart Ways to Pay Off Student Loans

How to Prepare for Exit Counseling

Before student loan exit counseling, the student must prepare some information. First, they should know the outstanding balances on their current federal student loans, which can be found on the Federal Student Aid website.
The student should gather the names, addresses, email addresses, and phone numbers for a close relative, two references that live in the United States, and their employer, if they have one. The Department of Education requires this information in the event that a borrower defaults on their loans and cannot be contacted.

During the student loan exit counseling, the student will also spend some time mapping out their potential salary and living expenses, such as rent and utilities, so that they can create an expected budget.

Recommended: How to Create a Budget in Six Steps

Topics Covered in Student Loan Exit Counseling

Topics you’ll encounter in student loan exit counseling include understanding your loans, plans and options to repay, how to avoid default, prioritizing financial planning, and choosing a repayment plan.

Understanding Your Loans

During the first portion of student loan exit counseling, the student receives a summary of their student loans, including total balance, terms and conditions, and the date that the first payment is due.

Next, they’ll cover the interest rates on student loans. Each loan has a set interest rate that depends on the loan type (subsidized, unsubsidized, PLUS, etc.) and the year dispersed. Students may want to write these interest rates down so that they can calculate their monthly payments in a later section.

Plans to Repay

Next, student borrowers will learn all about the rules of student loan repayment. Borrowers typically have control over the repayment plan that they choose, so it is wise to understand the pros and cons of all options. For example, income-driven repayment plans may lower the borrower’s monthly bill (in accordance with their income), but could cost a borrower more over time in interest. Keep an eye out for the major trade-offs between plans.

Borrowers are provided with a number of helpful student loan repayment calculations. Most students going through student loan exit counseling will see calculations that show how expensive it can be to utilize a grace period. Interest still accrues during a grace period and as it accrues, it is capitalized, which means it is added to the balance of the loan. Yet another calculator shows the borrower how much can be saved by making additional payments.

Here, student borrowers are also provided with logistical repayment information, like who to contact and in what scenarios you should contact your loan service provider.

Avoiding Default

Not paying loans on time and allowing student loans to fall into delinquency could have consequences in many areas of a borrower’s life. Therefore, during student loan exit counseling, there is a large focus on borrowers avoiding default on their student loans. This section will discuss the consequences for both a borrower’s federal loans (such as loss of student loan deferment options) and for career and future income (such as wage garnishment and impact to credit scores).

It will also cover options in the event that a borrower cannot make payments, such as deferment and forbearance, and the pros and cons of each of these options.

This section will also explain federal loan consolidation, student loan forgiveness programs, loan discharge for the permanently disabled, and how to settle student loan disputes.

Prioritizing Financial Planning

The borrower’s counselor or program should discuss budgeting, credit management, identity theft, and other basics of money management. Borrowers are encouraged to consider their short-term and long-term financial goals.

Though very important, the advice and education in this section are typically somewhat light. It might be a good idea for students to make note of the concepts they don’t understand and do some additional work outside of student loan exit counseling.

Repayment Information

Last, a borrower would choose a repayment plan, enter in their new contact information, employer or future employer’s information, and provide the names and contact information of references. The borrower’s loan servicer then reviews the information and provides the borrower with a repayment plan.

According to Federal Student Aid, the borrower is told to list their preferred repayment options, at which point their loan service will make a final decision and assign the borrower a repayment plan.

What Your Exit Counselor Doesn’t Tell You

Student loan exit counseling is necessary, important, and required of all students with federal student loans. But overall, the program is pretty light and quick.

Think about it: Some borrowers could have tens of thousands or even hundreds of thousands of dollars to pay back and get just 20 minutes of guidance as they click through some online slides. This information very easily could be part of a full, multi-credit course at a university.

Also, there is some important information that a borrower just won’t receive in exit counseling, and that’s information on how to handle their private student loans. While there are some similarities, private student loans will have many of their own nuances that are imperative to understand.

For example, private loans determine their own repayment plans and generally don’t offer deferment or forbearance options, and they may or may not allow for advance prepayment on a loan.

Student Loan Refinancing

Federal student loan exit counselors and programs generally do not cover student loan refinancing. Refinancing is the process of paying off student loans—both federal and private—with a new loan, ideally at a lower rate of interest.

Refinancing could help potentially lower borrowers’ interest rates and combine multiple loan payments into one. Compare this to federal loan consolidation, a program offered through the government that simply takes a weighted average of the existing loans’ interest rates. The main purpose of a federal loan consolidation is to simplify monthly payments; whereas a refinance through a private lender ideally lowers your interest rate.

With refinancing, the borrower pays off your government loans with a private loan, so refinanced loans are not eligible for federal repayment programs such as income-driven repayment, deferment, and public service loan forgiveness.

For borrowers who have no plans to use these programs, it may be worth considering refinancing. You may qualify for a better interest rate through refinancing if your credit score or financial situation has improved since you initially took out your loans as a student.

Regardless, it is a great idea to go into student loans exit counseling with a clear head. Paying back your loans is no small feat, so it will be so worth it to do some hard work up-front to make the rest of the process as smooth as possible.

If you do decide to refinance your student loans now or down the line, consider SoFi. SoFi has an easy online application, competitive fixed and variable rates, and charges no fees.

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

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Getting a Master of Business Administration is an investment. Tuition costs vary widely depending on the school, but the average cost of an MBA is $61,800 for a program in the U.S.

If you’ve committed to pursuing an MBA, the reality is that a higher income is probably still a few years away. However, you’re responsible for the cost of schooling now. It can be daunting, but there are options for making business school more affordable. Here are a few tips to evaluate as you craft a plan to pay for your MBA program.

Saving Up in Advance

If you’re already employed, and especially if you earn a high salary, it may make sense for you to stay in your gig for a few more years and put money away toward your degree. The more you save now, the less you may have to take out in loans later. If you’re interested in accelerating your savings, consider cutting your expenses to prepare for the lifestyle change of becoming a student again.

Taking Advantage of Free Money

There are a plethora of scholarships, grants, and fellowships available for business students. If you manage to land one, they can help reduce your costs slightly or significantly, depending on the size of the award.

When hunting for scholarships, consider starting with the schools you’re thinking of attending. Many institutions offer their own need- or merit-based scholarships and fellowships, some of which may even fund the entire cost of MBA tuition. Many, but not all, of these are geared toward specific groups of students.

Awards may be based on academic excellence, entrepreneurship, and for those committed to careers in real estate or finance. Contact your school’s admissions or financial aid departments to learn about the opportunities you qualify for.

Getting Sponsored by a Company

Some employers offer to pay for all or part of an MBA degree. In exchange, they may require that you work there for a certain time period beforehand and commit to maintaining your employment for some time after you graduate.

Some companies may offer relatively modest grants, while others might offer to cover the bulk of tuition costs. Some companies that offer tuition reimbursement for employees pursuing MBAs include Deloitte, Bank of America, Apple, Intel, Procter & Gamble, and Chevron.

If you can land a job at a company that offers this benefit, it can be a major help in paying for school and reducing your debt burden. Just be sure that you’re willing to meet the commitments, which in most cases means staying with your employer for a while.

Taking Out Student Loans

If you can’t make up the full cost of tuition and living expenses through savings, scholarships, or sponsorships, borrowing student loans is another option. You might first consider borrowing from the federal government, as federal loans offer certain borrower protections and flexible student loan repayment options.

Federal Student Loans

To apply for federal student loans, first fill out the Free Application for Federal Student Aid (FAFSA®). The school you attend will determine the maximum you’re able to take out in loans each year, but you don’t have to take out the full amount. You might choose to only borrow as much as you need, since you’ll have to pay this money back later—with interest, of course.

Graduate students are generally eligible for Direct Unsubsidized Loans (up to $20,500 each year) or Direct PLUS Loans. Neither of these loans is awarded based on financial need.

Both of them accrue interest while the student is enrolled in school. Unless you pay the interest while you’re in school, it will get capitalized (or added to the principal of the loan), which can increase the amount you owe over the life of the loan.

Direct Unsubsidized Loans will have a six-month grace period after graduation in which you won’t have to make principal payments (remember, interest still accrues). Direct PLUS Loans, however, do not have a grace period, so principal payments are due as soon as you earn your degree.

Private Student Loans

If you aren’t able to borrow as much as you need in federal loans, you can also apply for MBA student loans with private lenders, including banks and online financial institutions.

Private student loans will have their own interest rates, terms, and possible benefits. Make sure to research the different lenders out there and see which is the best fit for your financial situation.

Paying Student Loans Back

Taking out a big loan can be daunting, but there are options for making repayment affordable, especially with federal loans. The government offers four income-based repayment plans that tie your monthly payment to your discretionary income.

If you make all the minimum payments for 20 or 25 years, depending on the plan, the balance will be forgiven. (However, the amount forgiven may be considered taxable income.) If you run into economic hardship, you can apply for a deferment or forbearance, which may allow eligible applicants to reduce or stop payments temporarily.

If you put your degree to use at a government agency or nonprofit organization, you may also qualify for Public Service Loan Forgiveness. If you meet the (extremely stringent) criteria, this program will forgive your loan balance after you make 120 qualifying monthly payments (10 years) under an income-driven repayment plan.

Refinancing Student Loans

If you’re still paying off student debt from college or another graduate degree as you enter your MBA program, you could consider looking into student loan refinancing.

This involves applying for a new loan with a private lender and, if you qualify, using it to pay off your existing loans. Particularly if you have a solid credit and employment history, you might be able to snag a lower interest rate or reduced monthly payment.

While there are many advantages of refinancing student loans, there are also disadvantages, as well. If you refinance federal student loans, you lose access to federal forgiveness programs and income-based repayment plans. Make sure you do not plan on taking advantage of these programs before deciding to refinance your student loans.

The Takeaway

MBA programs can offer a valuable opportunity to advance your career and increase your income, but they can also come with a hefty price tag. Options to pay for your MBA degree can include using savings, getting a scholarship, grant, or fellowship, or borrowing student loans. Everyone’s plan for financing their education may be different and can include a combination of multiple resources.

Making existing loans manageable while you’re in school can go a long way to making your MBA affordable. Down the line, you can consider refinancing the loans you take out to get you through your MBA program. You can get quotes online in just a few minutes to help figure out whether refinancing can get you a better deal.

If you do decide to refinance your student loans, consider SoFi. SoFi offers an easy online application, flexible terms, and competitive rates.

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

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