Graduate Students Should Think Seriously About Their Financial Futures

financial planning graduate student

Reasons for Going to Graduate School

Think about your reasons for applying to graduate school. Is it to advance in your current occupation or change careers? Are you seeking the highest level of knowledge in your field? Maybe you're ready for the challenge, or you want to earn an advanced degree before starting a family. Whatever the reason is, make sure you're ready to invest money and time in this new journey. You're the one who will be spending countless hours studying, as well as making a significant financial investment.

Face the Financial Reality

According to, about 56% of graduate students took out loans for the 2007-2008 school year to pay for their degree programs. The average cumulative debt among those students was roughly $40,300. If you plan to apply for graduate school loans, it's important to assess how much money and debt you currently have. Ultimately, good financial planning will help you live within your means and prevent you from racking up more debt than you can handle.

Run the Numbers

Calculate your monthly expenses, including food, rent/mortgage, transportation, and credit card payments, then factor in your future school expenses, including tuition, books, and additional fees. If you'll be working full time or part time while earning your degree, factor in your earnings. These calculations can help you figure out not only how much money you'll need for graduate school, but also how much potential debt you'll be facing after graduation.

Scholarships, Grants and Fellowships

Unlike loans, scholarships, grants and fellowships don't need to be paid back. Some of these awards cover the full cost of tuition and living expenses, while others may only pay for part of your tuition. Similarly, you can trade work for modest earnings if you land a teaching assistantship. Consider contacting your schools of choice to find out more about graduate financial aid opportunities. It's worth asking how many graduate students receive grants, fellowships and similar awards in the academic departments that interest you.

The Reality After Graduation

Students in certain graduate school disciplines have few obvious job options other than post-secondary teaching. This isn't always a great track to rely on, though. A recent editorial in Inside Higher Ed points out that in some disciplines, like humanities, there is a less than 20% chance of landing a tenure-track professorship. The American Association of University Professors notes that about 50% of all postsecondary teachers in the U.S. are employed part time.

Even if you are one of the lucky few that get a full-time faculty position at a college or university, starting salaries higher than $50,000 are pretty rare. In addition, the average pay rate per course for an adjunct faculty member is $2,987, reports the Chronicle of Higher Education.

Make a Plan

It might be a challenge to land your desired job right after obtaining a graduate degree. Give yourself as many advantages as possible by being pro-active during graduate school. Expand your network by joining student associations or performing research with professors as often as you can. These kinds of connections may lead to career opportunities down the road.

It's also essential to have a back-up plan for post-graduation employment. Think about 'alternative' jobs you could take to cover your living expenses and pay off any debt. You may need to take a job outside your area of expertise in order to pay the bills. In addition, think about alternatives to your chosen career field. For example, a student who earns a doctoral degree in mathematics might not find a college teaching job right away, but he or she could find work with a government division, like the National Security Agency.

If you're considering an advanced degree and all this money talk is making you cringe, you might want to think about whether grad school is the right decision in the first place.

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