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Funding Your Online Master’s Degree: How to Pay Less with Financial Aid

Understand your financial aid options as a future master’s student and begin building your tuition-payment plan with expert advice, valuable resources, and easy-to-follow steps.

Author: Kathleen Curtis

Editor: Staff Editor

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Advancing your education is a significant investment. Between tuition, fees, and the cost of books and supplies, it can cost a lot of money to earn a graduate degree. But getting this advanced degree is often worth it, as it can help you land your dream job or to level up in your current role.

Figuring out how to pay for your educational journey starts with researching your financial options. With so many types of aid available for future master’s students, understanding the type that works best for your budget and aligns with your ambitions is key. Learn how financial aid can put a master’s degree in reach for you, and to get actionable tips and expert insight on financing your future.

6 Steps to Begin Your Financial Aid Journey

For many, figuring out how to pay for school is the single biggest hurdle to starting their graduate studies. Does this apply to you? Here are six steps to get you on your way to higher education.

  1. Build your budget

    Before you start looking at financial aid options or checking the prices of individual programs, you need to know where you stand financially. By assessing your finances and creating a budget, you’re better prepared to understand how much money you have available for grad school. In addition to factoring in school-related costs, think about how much money you’ll need for things like housing, transportation, utilities, and food. Once you have all of these numbers plugged in, you’ll have a much better idea of how much you have to spend.

  2. Fill out the FAFSA

    Filling out the Free Application for Federal Student Aid (FAFSA) is one of the most important steps you can take. Submitting this form each year of enrollment allows you to qualify for federal student loans, grants, and work-study funds. Even if you don’t end up using federal funds, you still need to fill out the FAFSA, as many colleges and universities require you to complete it to be eligible for their scholarships, grants, fellowships, and other forms of school-specific financial aid.

  3. Apply for scholarships and grants

    Prioritizing scholarships and grants makes a lot of sense, given that you don’t have to repay them. You can find this type of funding via colleges and universities, professional associations, foundations, for-profit companies, and state governments. Scholarships and grants tend to be highly competitive but finding local or niche options mean far fewer applicants, which can increase your chances of receiving an award.

  4. Look into student loans

    After exhausting funding options that you don’t have to repay, it’s time to consider student loans. By looking at your budget and the amount of funding received from other sources, you can figure out how much to borrow. Prioritize federal student loans as these have fixed interest rates, are backed by the U.S. government, allow for deferment and/or forbearance, and do not require a credit check to qualify. Private loans, conversely, have far less student-friendly terms, including higher interest rates.

  5. Inquire about tuition assistance with your employer

    Depending on your employer and whether you’re looking to grow in your current role or change industries, you may be able to get tuition assistance. This can pay for some or all of your tuition costs. Just keep in mind that employers who offer this type of funding usually require you to agree to work at the company for a set number of years after graduating. Under current law, employers can provide up to $5,250 in tax-free tuition assistance per calendar year.

  6. Review what you’ve received

    Once all the financial aid you’ve managed to secure has arrived, or you’ve been notified, it’s time to sit down with your budget once more to see where you stand. Compare the cost of your education – and living expenses – against secured funding to decide the next steps. You may find that you’ve been awarded enough money to stop applying for funding, or you may decide you need to keep going a while longer.

Understanding Your Financial Aid Options

Financial aid comes in many forms, and there are certain things you need to know and keep in mind about each type. Whether applying for federal loans, tuition reimbursement, work-study funds, or an assistantship, this section gives you an insider look at each one.

Federal Financial Aid

Filling out the FAFSA gives you access to federal loans, with award amounts based on tax records and cost of attendance. At the graduate level, there are certain types of loans you can apply for via the U.S. Department of Education. These include:

  • Direct Subsidized Loans

    Not really an option, these loans only provide support to undergraduate students.

  • Direct Unsubsidized Loans

    These loans do not require you to demonstrate financial need. But unlike a subsidized loan, interest on the principal continues accruing while you’re enrolled.

  • Direct PLUS Loans

    These loans support graduate and professional students who have exhausted all available funds. The award is not based on financial need but requires a credit check.

Things to keep in mind

  • If you need to take out a loan, federal loans should be your first option.
  • Direct unsubsidized loans have a 7.05% interest rate, while direct PLUS loans are set at 8.05%.
  • Outside of the direct PLUS loans, no others require a credit check.
  • You can apply for student loan forgiveness if you meet requirements around education, type of employer, and qualifying payments.
  • The U.S. Department of Education offers payment deference and forbearance if you qualify.


Fellowships typically come from professional organizations and other entities directly involved in your area of study. They provide a flat sum that can go towards tuition, textbooks, housing, or other education-related costs, like research expense. As with grants and scholarships, you don’t need to repay them so long as you meet all the terms of the fellowship. If a fellowship sounds like a good fit, you should check with various professional associations and for-profit entities in your discipline to learn about funding options. You also need to make sure your school will allow you to take on a fellowship while enrolled.

Things to keep in mind

  • Schools don’t typically offer fellowships; instead, they come from associations, foundations, and companies in the field.
  • Fellowships are extremely competitive and require top grades and demonstrated excellence.
  • Fellowships allow for a wider variety of uses for funds received, although expenditures must relate to educational costs.


Scholarships provide a phenomenal option for covering your educational costs, given that they are gift-based. There are many different outlets that provide scholarships, including your college and program department. You can also check with professional associations in your chosen industry, along with companies in the field, nonprofits, and private foundations. Scholarships tend to be highly competitive and often factor in academic excellence. But you can limit the amount of competition by trying to find specific rather than generic awards. Look for those particular to your major, ethnicity, religion, gender, etc., and you’ll likely have fewer applicants.

Things to keep in mind

  • Start your search early to find the best options.
  • Use scholarship databases to help you locate fitting awards.
  • Ask the financial aid officer at your school for support.
  • Start pulling together required documentation early, so you don’t miss deadlines.

Tuition Reimbursement

Tuition reimbursement comes from your employer and allows you to receive up to $5,250 in tax-free education benefits per year. To take advantage of this type of financial aid, you typically need to already work for a company that offers tuition reimbursement. Even if it’s not advertised as an employment perk, check with your supervisor to see if it’s something the organization would consider. In addition to bringing cutting-edge skills and expertise to your role, most require you to stay at the company for a set amount of time after graduating.

Things to keep in mind

  • Because most employers require a time commitment in exchange for tuition reimbursement, carefully consider how long you want to be there.
  • Just because it’s not advertised doesn’t mean your employer wouldn’t consider tuition reimbursement on a case-by-case basis.
  • You do not have to pay taxes on the money you receive from tuition reimbursement (up to the $5,250 limit) because it goes directly to the cost of your education.


Work-study is arranged through the U.S. Department of Education. If you qualify as a need-based student when filling out the FAFSA, you can take on a job at the school and receive between $7.25 and $15.00 per hour – depending on where you live. Jobs can vary dramatically, ranging from ones that relate directly to your major to generic admin assistance. The amount of time you can spend each week doing work-study, as well as how much you can earn each year, will vary based on both your FAFSA and your school. Check with your school’s career center to learn about options.

Things to keep in mind

  • You must qualify for work-study via the FAFSA each year you’re enrolled.
  • Work-study requires you to work part-time for your college or university.
  • Like scholarships or grants, you do not have to repay this money.
  • Work-study probably won’t be an option if you are enrolled in a 100% online program.


Assistantships are far more common in graduate programs than undergraduate degrees and come in the form of both research and teaching assistantships. In exchange for using the knowledge gained while enrolled, the school will typically cover some or all of your tuition. Some schools provide a stipend in addition to or in place of a tuition discount. If working as a research assistant, you’ll be helping a professor conduct research on a topic of their choosing. A teaching assistantship involves teaching undergraduate classes, grading assignments and papers, and holding office hours. These are a great fit if you see yourself going into research and/or higher education positions after graduating.

Things to keep in mind

  • Funds received from your assistantship do not need to be repaid.
  • Assistantships tend to be highly competitive, with only a small number available.
  • It’s important to ensure you have time in your schedule to take on the responsibilities associated with an assistantship.


While some nonprofit foundations may offer scholarships or grants, the most common type of funding found in this arena revolves around loan forgiveness. The Public Service Loan Forgiveness program, for example, allows qualifying professionals working for a nonprofit or government entity to have the remainder of their loans paid off after meeting set requirements. To qualify for this program, you must make 120 on-time monthly payments while working full-time at a nonprofit. Once you meet that benchmark, the U.S. Department of Education will forgive the remaining balance of your Direct Loans.

Things to keep in mind

  • The Public Service Loan Forgiveness program applies only to Direct Loans.
  • You must meet all requirements set forth to qualify.
  • You can change jobs during the qualifying 10-year period, so long as you continue working at a nonprofit.

State & School Aid

Both states and colleges offer various types of aid, typically in the form of grants or scholarships. The candidate pool for these awards tends to be smaller than national aid, as students must either live and/or study in that particular state or at that school. Some awards are generic in nature, providing funding to those who demonstrate financial need and/or academic excellence. Others focus on specific student attributes, such as a chosen area of study, race, religion, ethnicity, gender, or membership in the armed forces. Every state and school offers different awards with varied requirements. One of the great things about school-based scholarships is that you can sometimes use those awards to increase scholarship awards at other schools. You can contact one school and let them know you want to enroll there, but their scholarship award isn’t enough to pull you away from another school you’re considering. In some cases, the school you contacted will match or even exceed the other school’s scholarship award. Check with your state’s department of education and your school’s financial aid office to learn more.

Things to keep in mind

  • You typically need to live/study in that specific state to receive funding.
  • You must attend the college or university offering an award to receive it.
  • A variety of awards based on need, merit, and specific attribute exist, so exhaust each category.

Private Loans

Private loans should be the last option for funding your master’s degree after exhausting all other options. If you need to borrow loans, try to do so through the U.S. Department of Education. Private loans often require payments while in school, have variable and/or higher interest rates, usually aren’t subsidized, and require an established credit score. Federal Student Aid outlines all the differences between federal and private loans to help you may an educated decision.

Things to keep in mind

  • Private lenders typically do not offer loan forgiveness programs.
  • Your interest rate can change – and rise – over the course of your repayment.
  • Only some private loans allow you to defer payments while you’re in school, but the vast majority do not subsidize interest payments during that time.

5 Tips for Filling Out Your FAFSA

Filling out the Free Application for Federal Student Aid (FAFSA) is one of the most important things you can do to successfully fund your online master’s degree program. To make the most of federal financial aid, keep these tips in mind as you prepare your application

  • Tip #1: Fill it out, no matter what

    Even if you think you make too much money to qualify you for certain types of federal financial aid, you should still fill it out. Even if you don’t qualify for grants or work-study funds, you can still take out a federal loan if need be. Additionally, many master’s degree programs require students to fill out the FAFSA to be considered for school-specific financial aid awards.

  • Tip #2: Remember deadlines

    To receive consideration for federal funds, you must fill out the FAFSA by June 30 each year. That said, FAFSA applications are received on a rolling basis and can be submitted as early as January 1 – so long as you’ve filed your taxes. It’s important to remember that submitting your application earlier gives you a better chance of receiving funds – not just from the U.S. Department of Education but also from your school and/or state government. This is because many financial aid awards come from a limited pool of funds. Once that funding is gone, no more financial aid awards are possible until the next FAFSA application cycle

  • Tip #3: Get prepared early

    Remember that you can’t just decide to fill out the FAFSA and get it turned in 15 minutes later. The FAFSA requires you to provide important documentation confirming your identity, your income, your citizenship, and other important facets. Even if you’re not ready to fill out the FAFSA, you can start getting ready to do so. Make sure you have all income records, file your taxes as soon as possible, and ensure all your demographic information is up to date.

  • Tip #4: Double-check for mistakes

    The FAFSA has several different components, and it can be easy to make a mistake if you aren’t paying attention or haven’t done it before. Before submitting the document, take time to carefully review each section for mistakes. Pay close attention, especially to numbers, such as your social security number or your school code, as getting these wrong could significantly delay your application being processed.

  • Tip #5: Apply online

    After gathering all your documentation, filling out the application, and checking it for mistakes, it’s time to submit it. We recommend submitting your FAFSA online. In addition to bypassing the time it takes for it to reach the U.S. Department of Education via the mail, the information then has to be typed in by someone before you become eligible for financial aid consideration.

Common FAFSA Mistakes to Avoid

  • Leaving out an income source

    In addition to earnings from your employer, you must also include untaxed income such as disability, workers compensation, child support, and veteran benefits. If filing as a dependent and your parents are divorced, make sure to include the income of both.

  • Filing late

    The later you wait to submit your FAFSA application, the less of a chance you have to receive funding. Financial aid is released on a rolling basis, and once it’s gone, it’s gone until the next year.

  • Not following directions

    Thinking you know how to fill out the form without carefully reviewing directions for each section can lead to disaster. If you’re not sure about something, reach out to your school’s financial aid office for support.

  • Failing to sign the application

    If turning it in via mail, you and your parents must all sign the document. If submitting online, you’ll need to use your FSA ID.

  • Leaving fields blank

    If a question doesn’t apply to your situation or you don’t have a number for a question (for instance, if you don’t receive child support), put a zero in the field. Otherwise, the application processor will think you forgot to answer and send it back as incomplete.

Q&A with College Financial Aid Experts


Antonio Cruz is a mentor with Ivy Scholars, a private college consulting firm. A graduate of the University of Chicago, he knows the ins and outs of top schools.

Lindsay Fried holds a B.B.A. in Business Management from the University of Miami. After graduating, she worked on marketing and investor relations teams for several alternative investment funds, with assets up to $3 billion. Lindsay went on to discover a passion for college planning and founded Simply Admissions after receiving a Certificate in Independent Educational Consulting from the University of California, Irvine. She is a current member of the Georgia College Counseling Association (GCCA), Southern Association for College Admission Counseling (SACAC), and a professional member of the Independent Educational Consultants Association (IECA).

Q. What are the most common mistakes students make when approaching financial aid?

Fried: Many students do not submit the FAFSA (and CSS Profile, if required) because they do not believe they will receive financial aid. I always recommend that my students submit these applications for the following reasons:

* There is no downside in submitting the FAFSA/CSS Profile, and depending on the total cost of the program, you may be happily surprised!
* Certain colleges require the FAFSA/CSS Profile even for merit aid
* Certain states use the FAFSA as their state-run scholarship program application

In my experience, many times, people tend to be on one extreme side of the spectrum. On one side, there are those that expect tons of financial aid, even from schools that are not historically financially friendly. On the other side, some students often don’t expect any financial aid and think they can only afford in-state options. This tends to be a mistake because if you’re realistic and open-minded, there are likely many colleges you can afford.

Cruz: The most common mistake many students make when approaching financial aid is only considering it as an afterthought. Many schools offer very good aid, but many do not. If financial aid is central to paying for college, it should be one of the first factors students research when applying to colleges. Waiting until applications are sent, and acceptances are coming to make financial aid decisions is much riskier.

Q. What resources do you think go the most underutilized?

Fried: Formswift is an amazing free resource to help students appeal their financial aid packages. Colleges often have separate applications for institutional scholarships, which can easily be ignored or forgotten but are a great resource for additional institutional scholarships!

Cruz: There are many small and local scholarships which are often under-applied. These often only offer a small amount of money, but due to how few people apply, they can be a good resource for students who need a little extra help.

Q. Where can students turn for help with applications?

Fried: Independent educational consultants are always happy to help! Just make sure that you use a consultant that is part of a professional organization such as IECA or HECA.

Students can also turn to the colleges’ financial aid offices directly for help! Students tend to forget there is a human on the other side of the computer that is usually eager to assist however they can.

Cruz: Many colleges have resources to help students with college applications, although this varies by institution. Some students hire private consulting agencies, although cost constraints make this option far less available to most. They are some non-profit organizations designed to help students apply to schools, and many of the for-profit consulting companies put a lot of resources out for free online designed to help students with their applications.

Finally, many colleges put out their own resources to help students apply to their school specifically, including blogs and YouTube videos discussing the application and admissions process for that particular school. The quality of these offerings varies a lot by the school, however.

Q. In your estimation, why do students get turned down for funding (as in things they do wrong)?

Fried: If we’re talking about need-based aid, it may be because the college requested the student to verify something or send additional documentation. Those requests can be easily missed by students, allowing deadlines to pass by!

Cruz: Many students send in their applications too late. Most schools have a very limited pool of both merit and need-based aid, and a significant number of schools operate by no longer offering aid once their budgeted amount is gone. Thus, students who apply Early Action or Early Decision are more likely to be in time for aid. Very few students do anything materially wrong beyond that; there just isn’t enough aid for all of the students who want to attend colleges.

Q. What advice would you give to learners trying to maximize their financial aid options?

Fried: As you’re putting together your college list, take the time to understand how each specific school deals with financial aid. Some questions to answer are:

* How many students normally receive financial aid?
* How is the financial aid historically split between need-based and merit aid?
* What is the average institutional aid package?
* For public universities, how many out-of-state scholarships are available?

Cruz: To maximize your financial aid options, get both high test scores and good grades, then apply to several state schools, especially ones attempting to raise their academic profile. These schools are competing with top schools for good students, and they do this by offering very generous merit aid packages to students who they think will succeed, based on grades and test scores. By applying to a number of public and private schools, you increase your chances of one offering aid. Further, you should apply early to as many schools as possible, but don’t apply with the binding Early Decision unless it is to a school where you will definitely qualify for need-based aid. Early Decision can lock you into attending a school, regardless of how much (or how little) financial aid it offers.

Additional Financial Aid Resources

  • How to Pay for Grad School: 8 Ways to Finance Your Master’s Degree

    Getting a graduate degree is one of the smartest decisions you can make to invest in your professional future. Here are eight ways to finance that degree.

  • Grad School Prep Checklist

    Federal Student Aid offers this guidance on getting yourself ready to take advantage of graduate financial aid – even while still working toward a bachelor’s degree.

  • Get Financial Aid for Graduate School

    Sallie Mae offers actionable tips on making the most of funding options available for master’s degrees.

  • Financial Aid for Graduate or Professional Students

    Use this guide from the U.S. Department of Education for practical advice.

  • Free Application for Federal Student Aid:

    Fill out the FAFSA to learn about federal funding options. Complete the FAFSA as quickly as possible, as some forms of financial aid are first-come first-served.

  • Financial Aid for Master’s Degrees: 5 Big Questions to Ask & Research

    Franklin University compiled this thought-provoking list of considerations.

  • FAFSA for Grad School: Tips to Maximize Your Financial Aid

    Learn how to get the most financial aid possible. Here, you’ll learn whether filing as an independent or taking out only unsubsidized loans are the best financial aid options for you.

  • Eight Ways to Get Through Grad School Debt-Fee

    Learn how to get a graduate degree with as little debt as possible. This Investopedia article offers several actionable ideas.

  • How to Pay for a Master’s Degree: 6 Big Tips for Working Adults

    Time is at a minimum when working and going to school, but you can still find ways of saving.

  • How to Get Employer-Sponsored Degrees

    This article discuss ways to get an employer to help cover the cost of a master’s degree.