With the economy imploding, more professionals are ditching their day jobs to ride out the recession in graduate school.
“I really didn’t have to go to graduate school, says Jillian Cohen, a second-year student at Rutgers’ Blaustein School of Planning, who left a career in television to enroll in a graduate program. “But I wanted more security than I could get in the [television] business.”
Admissions consultants such as Graham Richmond, president of the Association of International Graduate Admissions Consultants and principal of Philadelphia-based Clear Admit, LLC, say that they're seeing renewed interest in graduate professional programs.
“We’re seeing people from Lehman, Bear Stearns and AIG these days,” says Richmond. “Sales of our publication have increased by 150% and consulting is up 20% since this all began.”
How to Get Money for Graduate School
If you have applied, or are considering applying, to graduate school, one of the biggest pieces to the puzzle is how to pay for your degree. Unless you have a trust fund or managed to stash a considerable amount of money away before your company went belly up, you’re going to have to find the funds for up to three years of education or more.
Generally, students have four options:
1. Federal Student Aid
Financial aid is not a free ride. The point from an administrator's perspective is to figure out how much you can afford to pay and then to provide for the difference in the form of a loan.
The current interest rate for the Graduate Stafford Loan is fixed at 6.8% until June 30, and the interest on the PLUS Loan is at 8.5%. Specialized Stafford and PLUS loans are available for law, business and medical school. Also, you’ll have to pay origination fees of up to 3% on the loan and a federal default fee is 1%.
However, the future doesn’t look too bright for these loans as the recession continues to hammer the economy. Lending giant Sallie Mae (Stock Quotes: SLM) took a $216 million net loss at the end of last year and has entered into a 12 and a half year, $1.5 billion dollar deal with Goldman Sachs (Stock Quote: GS) to help fund private loans. At the same time, MRU Holdings (Stock Quote: UNCL) (also known as “MyRichUncle”) has just filed for chapter 7 bankruptcy.
If you’re going to go for it, fill out a Free Application for Student Aid or FAFSA online.
Free money is always a good thing and, according to The College Board, there is more than $3 billion in scholarships for graduate and undergraduate students. If you’re looking for someone else to pay for your education, you can start your search on The College Board’s web site or contact the National Scholarship Providers Association.
3. Private Loans
Interest rates of up to 19% haven’t stopped many students from getting private lenders to finance their educations but, if you’ve been out in the workforce for any time, chances are that you already have enough debt in your life. Moreover, if you have outstanding loans, you may not be able to borrow as much, if at all.
4. Get a Job
Believe it or not, you can work and go to school at the same time. Many programs offer teaching assistantships. The average salary for a teaching assistant is $48,000, according to the employment database Simply Hired, based in Mountain View, Calif. That number can change depending on where you’re teaching and how much money your department has to spend.
Of course, no matter what your situation, the first step is applying and getting in. “If you look at it like an investment, now is a great time to retool for when the economy bounces back,” says Rosemaria Martinelli, associate dean for student recruitment and admissions at the University of Chicago’s Booth School of Business. “It’s a good time to sit out of the job market.”
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