Graduate Financial Aid

A blog about how to pay for graduate school

04.29.09 | 4 Things to Consider Before Grad School

You’ve finally decided that now is the right time to get that graduate degree. You’ve put it off long enough and are mentally ready to commit the time and effort required. But before you get snug in that lecture hall there are a few t’s that need to be crossed and i’s that need to be dotted.

1) Admissions Test: You’re not getting in to any grad school if you haven’t taken your admissions test. Your major will determine which test you need to take to get in. Obviously if you’re a business major you’re not going to be taking the PCAT, which is the Pharmacy College Admissions Test. Instead you will need to take the GMAT. If you are unsure which admissions test you need to take read Knowing Your College Test (1 of 2) and Knowing Your College Test (2 of 2).

2) Selecting a Grad School: Find out which schools offer your graduate program. That may sound rather elementary but you’d be surprised how many students have their heart set on a particular school only to learn it doesn’t offer their program. U.S. News & World Report offers grad school rankings by location, tuition, school size, and test scores.

3) The Mighty Dollar: How much is this going to cost? If your company is not picking up the tab will you be able to afford the monthly payment when you get out of school? The Graduate Stafford loan and Graduate Plus loan are the most common loan options utilized.

4) Job Prospects: Perhaps the most important thing of all is knowing where your degree will take you. I know these days it is hard to predict with the economy in a state of flux, but knowing the demand in your field is important. You want a degree that will open doors not keep them closed.

04.28.09 | What will My Monthly Payment be?

Posted in Graduate Stafford Loan by The Wise One

After a while it’s easy to lose track of how much money you owe and who you owe it too. In fact many bury their heads in the sand until after graduation.

Well, if you were ever curious about how much interest you’ve been accring each month on your grad stafford loans feel free to peek your head up from your sandy refuge. Below is a simple illustration of how your monthly interest is accrued.

Lets see how interest accrues between payments on April 15 and May 15 with $20,000 in student loans at 6.8%.

Average daily balance: $20,000 x 6.8% = $1,360

Days between payments (30/365.25) = .08214

$1,360 x .08214

Monthly interest: $111.71

Please note any subsidized grad stafford loan does not begin accruing interest until after graduation.

04.24.09 | Grad Schools Cutting Enrollment

Posted in Program Specific Graduate Private Loans by The Wise One

This article from the Wall Street Journal explains why schools are being forced to reduce the number of students enrolling in certain graduate programs. Is anyone surprised? I am not.

So You Want to Be a Professor?
By NAOMI SCHAEFER RILEY

Late last month, the Web site Inside Higher Ed reported that several universities were shrinking the number of students admitted to their Ph.D. programs this year. Emory University is cutting its doctoral students by 40% — admitting 220 this fall, down from 360 a year before. Columbia is reducing its intake by 10%. New York University is planning a reduction, although a “very modest” one, according to school officials. And the University of South Carolina is considering a plan to have some departments admit doctoral students only every other year.

There are several reasons for this doctoral downsizing. For one thing, teaching graduate students costs universities money — at least on first glance. Ohio University economist Richard Vedder estimates that schools spend anywhere from five to 15 times as much on graduate students as on undergraduates. Grad students are taught in small classes with senior professors. And students in doctoral programs (as opposed to those who leave after taking master’s degree) are generally on some kind of fellowship. They pay no tuition and receive a school-year stipend between $10,000 and $20,000.

But graduates students also act as teaching assistants, doing a great deal of time-consuming classroom work (and grading) that professors themselves are thus not compelled to do. In all sorts of courses, especially in their freshman and sophomore years, undergraduates may find themselves being instructed more often by a 25-year-old doctoral candidate than by the university’s full-time faculty members, who, of course, already have their doctorates (and one or two books to their credit, too). It is an odd, upside-down arrangement, but it has an economic logic: By providing cheap labor, graduate students save college administrations millions of dollars each year in salary costs.

So why the cuts? Well, the calculations work out differently for different schools. For instance, universities in lower tiers might not have to do as much because they can get away with having a higher percentage of classes taught by graduate students. But some of the schools making doctoral cuts this year gave compassion as their reason. Catherine R. Stimson, the dean of Graduate School of Arts and Science at New York University, was quoted in Inside Higher Ed: Given the state of the academic job market, she asked, referring to would-be doctoral candidates: “Is it fair to bring them in?”

It sounds like a logical question, but is it really? After all, the dire academic job market is nothing new. As Peter Berkowitz recalls from his time as a graduate student and professor at Harvard and Yale in the 1980s and ’90s: “The departments knew that something like half the students they admitted to their programs wouldn’t get Ph.D.s.” And, says Mr. Berkowitz (who is now a senior fellow at the Hoover Institution), “something like half of those wouldn’t get tenure-track jobs.”

In an article called “Contingent Faculty and the New Academic Labor System” (2004), Gwen Bradley notes that an academic job shortage is rarely the result of some surprising lurch in supply-and-demand curves, since “the same institutions both manufacture and consume the Ph.D. product.” In other words, universities know very well that they are producing far more Ph.D.s than they need. Compare this situation with the medical profession. Even if medical residents are made to work long hours under difficult conditions, the vast majority of them will get jobs as doctors. The vast majority of, say, Ph.D.s in English literature will not. Given that the typical doctoral degree takes six or seven years to complete (during prime job-training and family-forming years), there is a moral problem here. It is no great exaggeration to say, as Mr. Berkowitz does: “Many lives are ruined this way.”

With more and more people going to college, one might reasonably wonder why there hasn’t actually been a shortage of Ph.D.s in recent years. Two decades ago William Bowen, a former president of Princeton University, predicted as much, claiming that there would soon be far more university teaching jobs than academics to fill them. He co-authored a study foreseeing “a real shortfall” in the humanities and social sciences starting in the late 1990s.

The shortage never materialized. Even during boom times, there was not much of an uptick in job listings for university faculty. Any increase in job demand was met by an overwhelming increase in labor supply. Universities began hiring adjunct faculty members. They typically teach courses at more than one school. (In California, they’re referred to as “freeway flyers.”) They don’t get benefits and, all told, probably earn less than minimum wage.

Not surprisingly, these adjunct faculty members are feeling exploited and getting angry. In recent years, their concerns have been taken more seriously by the American Association of University Professors, which now has committees engaged in rigorous hand-wringing over their ordeal. Marc Bousquet, the author of “How the University Works,” sees a couple of key ironies in the academic job market: Getting a Ph.D. now often means the end of an academic career rather than the beginning of one; and the American university, which claims to be an egalitarian institution, relies on people who can only afford to take badly paid adjunct teaching positions because they have another source of income, either from a spouse’s job or a second job of their own.

One response may be: So what? Is there any compelling reason that universities — as self-interested as any institution — should reconsider their employment policies? Why not staff classes with adjunct labor? Why not give customers the same product at a lower cost?

The last question points to a bigger problem, though: Is it the same product? Who knows? Higher education has gone so far off the rails in recent years that parents and students hardly know what they are supposed to have learned in a freshman composition course or in Sociology 101. And as long as there is a degree waiting at the other end, they hardly care.

Ms. Riley is the Journal’s deputy Taste editor.
Article link here

04.20.09 | One Stop Shop for Federal Loans in ‘10?

Monday Morning Rant…

President Obama’s recent plan to eliminate private lenders from the private student loan market would be damaging to students and take away a students right to choose.

At present there are two primary lending options for students; the government’s in-house program and private lenders such as Sallie Mae, Suntrust, Discover Student Loans, Wells Fargo, Bank of America, and Citigroup to name a few. Obama’s plan would move all federal loans such as the Grad Plus and Graduate and Undergrad Stafford loans over to the government’s in-house program leaving private lenders out in the cold.

The private sector has been supplying funding for students for years and now, by 2010, the government could pull the rug out from underneath them if Congress gives the O.K. This would have a crippling effect on the public sector costing thousands their job.

Having options is what makes this nation so great. If we didn’t have Burger King and Wendy’s than McDonald’s could charge $6 bucks for a cheeseburger with no competition. What kinds of fees will the government be attaching to these loans? What type of borrower benefits would exist? Private lenders help the student loan industry, not hurt it.

I don’t know about you, but I don’t want any one entity monopolizing the federal student loan industry. As a consumer I want options.

04.20.09 | Who is My Lender?

From Student Loan News, Updates and Blog Posts » Graduate Loans:

I’d say at least half the people I speak with have no idea who their lender is. And honestly, until you graduate and need to begin making payments it doesn’t matter. Those loans are out of sight and out of mind. But when the time comes when you need to be fiscally responsible or place [...]

Originally published by Student Loan News, Updates and Blog Posts » Graduate Loans.

04.17.09 | 5 Things to Consider Before Enrolling in Grad School

#1 How are you going to pay? Fee’s continue to climb at both state and private institutions making school a costly investment. If you are currently employed you may try drafting up a proposal to your employer to pick up part or all of the tab. Outline how your knowledge will help the company. If you can demonstrate how your new tools will effect the bottom line in a positive way you may have a shot.

Additional financial options to consider include: scholarships, graduate Stafford loans, graduate plus loans, and private graduate loans.

#2 What is the market outlook for your profession? No point in going back for your MBA right now if the demand isn’t there. The market is saturated with talented people with MBA’s and loads of experience looking for work. If you are the one fronting the money for the degree you obviously want to put it to good use immediately and not place it on a shelf to collect dust.

#3 When are classes offered? Does the school offer your program at times convenient for you? Can you substitute classes if needed? I can tell you it greatly improves your chances of getting your MBA if you are actually in the class!

#4 With MBA salaries down is it worth the investment? Like I previously stated it really depends on the market. However, MBA degree holders on average earn between 15-20% more per year than those with a BA.

#5 Can I have my graduate student loans forgiven? You may be entitled to student loan forgiveness. Both Perkins loan forgiveness and Graduate Stafford loan forgiveness are available. Public service, volunteer work, and military service are among the notable forgiveness categories.

04.15.09 | Update: Student Loan Big Wigs Want to Compromise?

Posted in Graduate Stafford Loan by The Wise One

Sallie Mae has turned up the heat in Washington my lobbying a hybrid approach that would combine both thehandshake Federal Family Education Loan Program and the Direct Loan Program. The FFEL program is the program that Obama as proposed eliminating, and which would ultimately put many student loan companies out of business. It looks like student loan giants like Sallie Mae are taking the, “we can work together” approach, but it remains to be seen if Obama will consider this instead of completely eliminating the loan program the way it currently stands.

The student loan giants have hired two Democratic lobbyists, tony Podesta and Jamie S. Gorelick, not to necessarily lobby against Obama, but to introduce the idea of a compromise between the two programs. It’s definitely an interesting approach to such a sensitive issue. Martha Holler, a Sallie Mae spokeswoman, was quoted as saying, “We agree that it’s time to remake the loan programs…We support the president, and we want to help him reach his objectives by proposing a constructive alternative that would pull the best of both programs.” So what exactly is Sallie Mae proposing? They introduced the idea of allowing private student loan companies to originate the loans and then turn them over to the Department of Education for a fee. This could help to prevent the Department of Ed from being overwhelmed at the amount of loans they would have to originate, should Obama’s proposal pass…considering that the Dep’t of Ed currently originates only 21% of Federal Stafford loans per school year, that increase may be too much to handle, especially if the proposal is pushed through before there is time to prepare Direct Loans for the influx.

While Sallie Mae’s proposal is still not fully developed, it is still interesting to see the king of approach they are taking to deal with a proposal that could ultimately bury not only Sallie Mae, but many other lenders who participate in the Federal Family Education Loan program.

04.13.09 | Grad Plus Interest Rates Must Come Down

Monday Rant…

The fact that Grad Plus loans have an 8.5% rate in this market is nauseating to me. Home equity lines and 30-year fixed mortgages are in the 3.75% to 5.75% range these days. It just really baffles me how the Fed Funds Rate, which is the rate at which banks and other depository institutions lend money to each other, can be as low as 0.25% but yet we continue to let students burn.

I applaud the efforts of the Obama administration for increasing the amount of Pell Grant and Stafford loan funds, but why not hit the trifecta and address the inflated interest rate issue on Plus loans? The rest of us are benefiting from low interest rates, why can’t grad students?

Recommendation: Maximize scholarship and grant money first. Next, turn your attention to the Graduate Stafford loan before you consider the Grad Plus loan. The Grad Stafford has an interest rate nearly 2 percentage points lower than the Grad Plus. Let the Grad Plus loan be your fallback plan.

04.09.09 | Getting into Grad School, No Easy Task

Back in October I wrote a blog entitle, No time like the present to get your M.B.A., which spoke to the point that while the economy was on the down swing it made sense to jump back into the classroom and re-enter the workforce at a later time with your newly polished weapon, your MBA. Of course that was back when the unemployment rate was a merely 6.6 percent. Today the unemployment rate is a jaw dropping 8.5 percent, which is the highest it’s been since November of 1983 according to the Bureau of Labor Statistics. It makes last October feel like the good ole days.

As the workforce gets smaller the education pool increases making grad school more competitive than ever. My recommendation, as it was last year, is to apply to as many schools as possible. Strength in numbers is the way to go. Don’t limit yourself to just one state. According to the U.S. Census Bureau those who hold a master’s degree make on average 21% more per year than those with only a bachelor’s degree.

If you are considering graduate school and need a grad plus loan (click here). For a private graduate loan (click here).

04.07.09 | How Long Will It Take to Earn My MBA?

Time is money. Those three simple words can take on a multitude of meanings. For hourly employees each tick of the clock holds monetary value. For those enrolled in graduate school, trading time for knowledge now in hopes of making the big bucks down the road is of paramount importance. But how many credit hours will it take to secure a graduate degree and what is the expected time table?

As most know 120 credits will earn you a bachelors degree, but the exact number of credits needed to complete a masters degree program is dependent on the college or university, course of study, and whether the individual is required to take prerequisite courses. Generally speaking, however, between 30 and 40 credit hours should get the job done.

The length of time it will take to complete a graduate program will depend on how many courses you are able to take per semester and the sequential nature of course offerings. For someone who is working, it will most likely take between two to three years.

In my friend Brian’s case it will take him 39 credits to earn his graduate degree in computer science because he elected a grad major that was completely different from his undergrad major (History). He also has little job experience in the computer science field, which may have helped him bypass those three prerequisite courses had he been able to demonstrated some level of competency in a professional environment. Still, schools generally want to work with graduate students to help anyway they can.

Graduate programs tend to offer greater flexibility than traditional undergrad programs due to the limited number of classes that are offered. You generally have your required courses to fulfill and your elective course, however, substitutions for required courses are allowed in order to aid the student at most school’s. If the department head notices the next time a certain class will be offered is a year down the road he or she will not just make you wait around for a year until that course comes up again. Just be sure to bring this to the attention of your advisors, or department headso they may work with you on a solution.

- To apply for a grad stafford (click here).

- To apply for a plus loan (click here).

- To apply for a grad stafford (click here).