When and how should students going to college plan a budget for graduate school? That’s the question author and blogger Jenny L. Maxey returns to answer for POCSmom readers. Take a look at Jenny’s two prior guest posts, also packed with great info: 7 Tips to Help Your Child Decrease Their Loan Debt BEFORE Graduation Day and The Political Side of Student Loans. Higher education is a huge investment that requires careful planning:
College students can prepare themselves financially for grad school in many of the same ways they budgeted for their undergraduate degrees. However, a few new problems may arise that make it more challenging. While there are still many scholarships available for graduate students, scholarships for a particular area of study will be narrow, which means more students gunning for the same scholarships. Further, those applying for grad school are those that are more academically successful as undergrads. This means that the competition is fierce for those scholarships. Moreover, income from part-time work may also be hindered as grad school takes up more time during the school year and some programs even have work-hour caps, causing budgets to be less flexible than during undergrad. Not to mention, you’ll find costs for grad school to be generally more expensive such as tuition, textbooks, professional networking groups among other miscellaneous costs.
It may seem easiest to just throw your hands up and give in, relying on more loans or credit cards for financial assistance. Although the budget may be a little tighter in grad school, try to resist this urge because there are ways to continue to save.
Begin planning during the final year of undergrad. There will be admission exams (GRE, MCAT, LSAT) to pay and prepare for. Keep track of deadlines and take advantage of early bird discounts. Look for free resources to help with preparation for the exam, personal statements, and building up résumés.
Continue to apply for scholarships. Look for need-based and merit-based scholarships during the admission process, but don’t stop there. Apply for scholarships for each year of graduate school. For example, employers and agencies offer scholarships for reaching a certain level of grad school (i.e. a scholarship specifically for a second year law student). Some schools even give scholarships based on academic performance throughout the duration of the program. For instance, most law schools award students with scholarships for achieving a certain rank within their class (such as the top 10%) after the first year.
Review the school’s valuation of costs and don’t accept it “As Is.” Visit your school’s financial aid website or office to locate the estimated costs. There are fees that count towards the cost of tuition, but can be opted out of. If your student prefers to jog instead of using the gym, try to opt out of the gym fee. Or, did your student get a new computer for an undergrad graduation gift? Opt out of the computer lab fee or the cost allotted for the purchase of a new lap top (which is included in most grad school costs when calculating the loan). Every school is different, so be sure to check with the financial aid office to determine what can be cut.
Multi-task experience and income. Have your student look for opportunities to multi-task. Building a résumé with experience is a must in this job climate even with a graduate degree. Positions such as a teacher’s assistant can offer experience and an income, and are generally flexible with school hours. In law school there are search engine and bar preparation student representative positions, which allow students to receive an income plus discounts on study materials and programs. If students can receive course credit for internships that also come with pay, definitely jump on the opportunity.
Make sure undergrad loans are deferred. Most federal and some private loans will allow for continued deferment of payment if the student is enrolled in grad school (varies on full or part-time enrollment). Make sure the loans are deferred. This allows the payments to be delayed without interest accruing (although you’ll need to look at your specific loan agreement because terms can differ). If the loans are in forbearance then interest will accrue, which causes you to pay more over the life of the loan. If you haven’t talked to the lender about repayment, then payment may become due and may set your student into default if they cannot pay – so make sure undergrad loans are situated! If your student is able, try to make interest payments on loans, even if not required, in order to keep the outstanding balance low and the amount paid over the life of the loan less.
Create the budget. Once you and/or your student have implemented these tools to carve out a little more flexibility in a budget, it’s time to set the budget. Look at spending for a few weeks to a month to see where it’s all going and determine areas that can be cut back. Ask upperclassman for unexpected costs they came across so you can be prepared for them. Use student ID cards to get discounts on food and entertainment. Purchase used books, eBooks, or use books from the library to get textbooks at a lower rate. Use Microsoft Excel or free smartphone apps to create a budget that is easy to enforce. And, if the budget goes belly up, don’t quit! Keep at it until it becomes habit.
Jenny L. Maxey is the author of Barrister on a Budget: Investing in Law School…without Breaking the Bank, which is available on Amazon and Barnes & Noble on November 17, 2014. Visit www.JennyLMaxey.com for more information.