Navigating Financial Aid for Graduate School: Understanding Pell Grants and Other Options

The escalating cost of higher education, with the average graduate degree now around $70,000, has made financing graduate studies a significant concern for many. Student loan debt has grown significantly in the last decade, with 43 million borrowers owing $1.73 trillion in the United States as of June 2024. For many, this debt is not only a financial burden but a mental burden as well-leaving many anxious or depressed about their debt. Students also report delaying or missing out on life events, such as starting a family or buying a home, as a result of their debt. However, numerous financial aid options are available to graduate students, making advanced education more accessible and manageable. In the 2022-2023 academic year, graduate students received an average of $28,300 in federal financial aid through grants, loans, and work-study programs. Graduate students took home some $64 billion in educational grants, loans, tax breaks, and work-study dollars during the 2022-2023 school year. This figure includes public and private scholarships and other financial aid.

Pell Grants: Primarily for Undergraduates

Pell Grants are a form of federal financial aid that assists students in funding their education. Generally, Pell Grants are awarded to eligible undergraduate students who have not earned a bachelor's or a professional degree. For the Pell Grant program, a student is an undergraduate only if the student has not earned or completed the requirements for a bachelor’s or professional degree. A student who has earned a baccalaureate degree or a first professional degree cannot receive a Pell Grant. A student who completes a master’s program has earned a degree beyond the baccalaureate level, making the student ineligible for a Pell Grant even if they do not have a bachelor’s degree and enroll in an undergraduate program. A student with a baccalaureate or professional degree is ineligible even if the degree is from an unaccredited school or is not recognized by your school. Similarly, a student with a baccalaureate or professional degree from a foreign school usually isn’t eligible for a Pell Grant. bachelor’s degree. If the student provides written documentation that the foreign degree is not equivalent to a bachelor’s degree awarded in the United States, you may determine that the student does not have a bachelor’s degree. Features of Pell Grants include:

Need-based Aid: Unlike loans, Pell Grants do not need to be repaid, making them an attractive option for students from low-income households.
Eligibility Criteria: Students must demonstrate significant financial need through the Free Application for Federal Student Aid (FAFSA) to qualify.
Funding Amounts: The grant amounts can vary each year and depend on factors like the student's financial need, cost of attendance, and enrollment status.

Exceptions to the Rule: When Graduate Students Might Qualify

While Pell Grants are primarily for undergraduate students, there are specific exceptions where graduate students might still meet the eligibility criteria. These include:

Postbaccalaureate Programs

One exception is for students enrolled in certain postbaccalaureate programs. These are non-degree programs taken after completing a bachelor's degree. A common example is students pursuing their first teaching credential through a third school or teacher certification program. In such cases, they may be eligible for Pell Grants as long as the program does not lead to a bachelor's or graduate degree. Under this very limited provision, a postbaccalaureate program is defined as a program that generally requires a student to have a bachelor’s degree before being admitted to the program. Accordingly, a program in which undergraduate students are routinely allowed to enroll would not meet the definition of a postbaccalaureate program for this purpose, nor would a program that is generally open to undergraduates but that also admits students with bachelor’s degrees. For federal student aid purposes, a school must treat a student who receives a Pell Grant under this provision as enrolled in an undergraduate program. Normally, students who indicate on the FAFSA that they have a bachelor’s degree won’t be listed in the Department’s records as Pell-eligible students, and the school won’t be able to receive Pell funds for them. However, to allow students who are eligible under the postbaccalaureate program provision to be paid, students who correctly report that they have a bachelor’s degree but also indicate on the FAFSA form that they are in a teaching credential program will be listed as Pell-eligible students.

Concurrent Enrollment

Another scenario involves concurrent enrollment, where graduate students qualify and are enrolled in both undergraduate and graduate courses simultaneously. Suppose the first graduate student enrolled still needs to complete their bachelor's degree and is primarily considered an undergraduate. In that case, they might qualify for Pell Grants based on their undergraduate status. Occasionally a student will complete all the requirements for a bachelor’s degree but will continue taking undergraduate courses without accepting the degree. Your school must decide whether and at what point the student completed the baccalaureate course of study.

Read also: Pell Grant Requirements Guide

Students in dual-degree programs

Students enrolled in dual-degree programs that confer a bachelor’s degree and either a graduate or first professional degree are undergraduates for at least the first three years of the program. The school determines at what point after three years the student ceases to be an undergraduate student.

These cases highlight that while Pell Grants are predominantly for undergraduates, there are unique situations in which graduate students could still benefit.

Navigating the FAFSA as a Graduate Student

Filling out your Free Application for Federal Student Aid, or FAFSA, for grad school is typically the first step to securing funding. The FAFSA is an application for federal student aid. All students, whether they are in graduate school or undergraduate school, must complete the FAFSA to be considered for federal grants, work-study programs, and loans. Most colleges and universities also use the FAFSA for state aid and institutional aid.

As a graduate student, you may see higher financial offerings stemming from your FAFSA than your undergraduate peers because you are no longer obliged to report your parent’s financial status and income on the form. At this point in your educational career, you’ll be considered an “independent student,” so you’ll only need to report a spouse’s income alongside your own.

However, some schools - such as law schools or medical schools - may still request that you provide your parents’ financial information.

Read also: Pell Grant Requirements Explained

On average, full-time graduate students were awarded $28,300 in federal aid last year, according to College Board, while undergraduate students received an average of $15,480.

The amount of financial aid you qualify for during graduate school depends on your FAFSA results and the amount you borrowed during your undergraduate years. You can qualify for up to $138,500 total, which includes the amount you borrowed during your undergraduate studies. Students attending medical school can qualify for a maximum of $224,000 in loans.

The FAFSA does more than just qualify you for federal student loans, however. It is also widely used by public and private institutions to determine your financial need to qualify for scholarships, grants, fellowships, and other funding programs.

Here’s how to apply:

Complete the FAFSA: The Free Application for Federal Student Aid (FAFSA) is the key application form in federal student aid. You may either file an electronic or a paper FAFSA.
Deadlines: Submit your FAFSA as soon as possible, following the financial aid deadlines of your preferred schools and any state-specific financial aid timelines. Typically, these deadlines are in early February. The 2024-2025 FAFSA form is open until June 30, 2025. The 2025-2026 FAFSA opens on October 1, 2024, and is open until June 30, 2026.
Review Submission Summary: Within 1-3 days of applying, you will receive a FAFSA Submission Summary. At that time, you can review your application and make any necessary changes.
When to Apply: You should apply by filing your FAFSA as soon as possible after January 1 in order to meet the State of Maryland’s deadline of March 1

Alternative Federal Programs for Graduate Students

While Pell Grants may not be widely available for graduate students, several federal programs offer financial assistance tailored to support them in advanced studies. These initiatives can significantly ease the financial burden of graduate education.

Read also: Understanding Pell Grants

Federal Work-Study (FWS) Program

The Federal Work-Study program provides part-time employment opportunities for graduate students with demonstrated financial need. The program allows the federal government to pay them money to help cover educational expenses. Positions in the work-study program often align with the graduate student's field of study, offering both financial aid and valuable work experience. Graduate students who fill out the FAFSA and demonstrate a financial need may be eligible for Federal Work-Study. Depending on your university, there may be other opportunities to gain professional experience and a paycheck while in school. At Northeastern, forty percent of graduate programs integrate full-time co-op opportunities with industry leaders for three to eight months.

To Apply: Contact the financial aid office at the institution you plan on attending to see if they participate in the Work-Study program.

Direct Unsubsidized Loans

Unlike Pell Grants, Direct Unsubsidized Loans are not need-based. Graduate students can borrow these federal loans to cover tuition and other educational costs. Interest accrues from the time the loan is disbursed, but they offer flexible repayment plans post-graduation. Graduate students are eligible to borrow up to $20,500 per academic year, provided they fill out the Free Application for Federal Student Aid. Students can fill out the FAFSA as early as Oct. 1 for the following calendar year, but they can also apply for a loan after the semester has started if the need arises.

Graduate PLUS Loans

Graduate PLUS Loans are another federal aid option, catering specifically to graduate and professional students. These loans require a credit check but allow borrowing up to the cost of attendance minus any other financial aid received. They also come with flexible repayment options and deferment opportunities. In addition to direct unsubsidized loans, graduate students can apply for a Direct PLUS Loan. The maximum amount of this loan is the total cost of attendance (including living expenses) minus any other financial aid, including scholarships and loans. This amount will vary depending on the program in which a student enrolls.

TEACH Grants

For those pursuing a career in education, TEACH Grants provide up to $4,000 per year in exchange for a commitment to a professional degree teaching program in a high-need field at a low-income school for at least four years. This grant is available to both undergraduate and graduate students enrolled in eligible professional degree programs. To maintain eligibility for TEACH Grants, graduate students must agree to teach full-time in a high-need field at a low-income school for at least four years within eight years of completing their program. Failure to meet these requirements will convert the grant into a Direct Unsubsidized Loan, which must be repaid with interest.

Additional Financial Aid Options

Graduate students have access to various financial aid options beyond federal programs. These include scholarships, grants, assistantships, tuition reimbursement, and private loans.

Scholarships

Scholarships can help you lower the cost of your graduate degree. Unlike loans, these merit-based awards don’t require repayment. Scholarships are often awarded for academic or athletic excellence, to support students studying a specific field, or to help students of underrepresented backgrounds. Your best bet is to apply for awards that match your interests, expertise, and background. Start your scholarship search with online scholarship search engines, such as Sallie Mae’s Graduate School Scholarship Search and Collegescholarship.org’s Scholarship Search Engine.

Consider scholarships based on:

Your field of study: Whether you are studying biotechnology or earning your EdD, there are scholarships available in your field.
Your ethnicity: Some organizations offer scholarships for students of a certain ethnicity. For example, the Hispanic Scholarship Fund offers scholarships ranging from $500 to $5,000 to students with Hispanic heritage in any field of study. You can also find general minority scholarships that are available to a wide range of ethnicities and aid opportunities for certain nationalities.
Your university connections: You may be able to earn a graduate scholarship or tuition discount by applying to your alma mater. Northeastern, for example, offers the Double Husky Scholarship, which gives Northeastern alumni a 25% discount on their graduate education in over 120 eligible programs.
Your unique life circumstances: Do you live with disabilities, or have you overcome adversity in some way? There is a good chance there is a scholarship for your unique situation.

Grants

Grants, like scholarships, do not need to be repaid upon graduation. Grants are typically awarded based on financial need - calculated, in part, by your FAFSA results. State grants: State-level grants are available to residents and, in some cases, residents of nearby states. Institutional and organizational grants: School-funded grants are given by graduate schools to encourage diversity, support field-specific research, or help graduate students with financial need. Many private organizations also offer grants to help students pursue an education in the fields they support. Many organizations have created grants to help graduates pursue an education in the fields they support. For federal and state grants, fill out the Free Application for Federal Student Aid (FAFSA®). You’ll be notified about any grant money when you receive your financial aid package from your school.

Fellowships and Assistantships

Graduate students also can become more specialized and gain experience by working part time in their field in exchange for funding. Fellowships are grant funding tied to specific research or fieldwork. They are awarded by universities, as well as by other public and private institutions. Awarded for academic excellence, graduate fellowships can be found in many fields and often include an internship or other service commitment. A primary benefit of a graduate fellowship is the exposure to research and experts in your field. Graduate student fellowships can be highly competitive. They can also involve an extensive application process that includes nominations, interviews, and presentations. Fellowship programs look for highly motivated individuals with demonstrated leadership, knowledge, and drive. Be sure to reach out to related professional associations and other nonprofit research organizations that support your area of study. Assistantships are typically awarded by universities in exchange for work as a teacher’s assistant or research aid. Graduate students can apply for several kinds of assistantships, either upon program acceptance or at any time throughout their studies, depending on the institution. Research assistants perform research duties under faculty supervision, while teaching assistants help with direct student tasks, such as grading or holding office hours.

Tuition Reimbursement

Tuition reimbursement is also a popular way to fund your graduate degree. Many graduate students are already working in their fields, and large employers like Apple, Amazon, Google, and Disney are willing to reimburse employees for a portion of their tuition costs. Approximately 48% of employers offer some type of tuition reimbursement as an employee benefit, although only 2% of eligible employees take advantage of this benefit. The average tuition assistance provided by employers annually is $10,500 for graduate education, which can dramatically reduce your tuition costs. Even select part-time or contract positions offer these benefits to employees. If you work for a smaller company without an HR department, arrange a meeting with your boss to discuss the possibility of tuition assistance. They might have to do more research on the matter, but mention that there are tax benefits available to them if they offer partial tuition reimbursement. Pay close attention to any corporate policy, however. Many employers will only reimburse funds for approved programs and will often require a certain GPA.

Student Loans

You’re likely familiar with the idea of student loans-federal or private funds that will need to be paid back, with interest, after graduation. The federal government offers two types of loans, often with more favorable terms than private options. Subsidized loans don’t accrue interest as long as you are enrolled in school full-time. Unsubsidized loans start accumulating interest immediately after they are issued, regardless of enrollment status. Both types of loans offer a six-month grace period before the repayment cycle begins. However, graduate students are only eligible for unsubsidized loans.

Lastly, private student loans can be a financial lifeline if you have exhausted all scholarship, grant, and federal loan options. Though they don’t always have as favorable terms as federal student loans, they can provide access to the funds you need to pursue your educational goals. There are several private lenders that offer graduate school funding, including College Ave, Sallie Mae, and Ascent. Borrowers typically need a qualifying credit score or a co-signer. If possible, federal student loans should be favored over private student loans.

Military Benefits

If you spent time serving this country, your college costs might be covered. Look for Yellow Ribbon schools that will pay for most, if not all, of your tuition if you are a post-9/11 veteran. Discover how you can fund your Northeastern education with our diverse financial aid options. Department of Veterans Affairs (VA).

Tips for Securing Financial Aid

Treat the pursuit of financial aid as your job. Don’t rush your applications or essays, and don’t reuse the same answers for different award submissions. Instead, take your time with each submission, personalizing it to that specific prize or opportunity.

If your scholarship or grant application allows you to answer optional questions or submit extra documents, such as a personal essay, take advantage of the opportunity.
Be on the lookout for financial aid opportunities all year long. Some scholarships or internship opportunities open up at the beginning of the year, while others align their deadlines with the school’s fall semester.
With thousands of available financial aid opportunities, it’s impossible to keep track of the details of every scholarship or program. Use a simple planner dedicated only to scholarships, grants, and other aid opportunities. Use the planner’s calendar to track submission deadlines, and make sure to mark down when you should start working on the application. Write down essential points of each aid opportunity, such as which documents to send, essay questions to answer, and reference letters to gather.

Managing the Cost of Graduate Education

Managing the cost of attendance for graduate education can be challenging, but several strategies can help ease the financial burden.

Seek out scholarships and grants: Scholarships and grants specifically designed for top graduate schools and students.
Assistantships and Fellowships: Apply for teaching or research assistantships that cover tuition costs and offer a stipend.
Part-Time Work: Balancing a part-time student part-time job with your studies can help manage daily living expenses well.
Budgeting Effectively: Create a detailed budget to track your income and expenditures.
Student Loans: Federal student loans often have lower interest rates and more flexible repayment options than private loans.
Utilize Campus Resources: Many institutions offer resources like discounted transportation passes, free software, or subsidized health insurance that can reduce overall costs.

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