How The FAFSA Differs For Grad School

For the past seven years, Kat has been helping people make the best financial decisions for their unique situations, whether they're looking for the right insurance policies or trying to pay down debt. Kat has expertise in insurance and student loans.

For the past seven years, Kat has been helping people make the best financial decisions for their unique situations, whether they're looking for the right insurance policies or trying to pay down debt. Kat has expertise in insurance and student loans.

For the past seven years, Kat has been helping people make the best financial decisions for their unique situations, whether they're looking for the right insurance policies or trying to pay down debt. Kat has expertise in insurance and student loans.

For the past seven years, Kat has been helping people make the best financial decisions for their unique situations, whether they're looking for the right insurance policies or trying to pay down debt. Kat has expertise in insurance and student loans.

Caroline Basile is Forbes Advisor’s student loans and mortgages deputy editor. With experience in both the mortgage industry and as a journalist, she was previously an editor with HousingWire, where she produced daily news and feature stories. She ho.

Caroline Basile is Forbes Advisor’s student loans and mortgages deputy editor. With experience in both the mortgage industry and as a journalist, she was previously an editor with HousingWire, where she produced daily news and feature stories. She ho.

Caroline Basile is Forbes Advisor’s student loans and mortgages deputy editor. With experience in both the mortgage industry and as a journalist, she was previously an editor with HousingWire, where she produced daily news and feature stories. She ho.

Caroline Basile is Forbes Advisor’s student loans and mortgages deputy editor. With experience in both the mortgage industry and as a journalist, she was previously an editor with HousingWire, where she produced daily news and feature stories. She ho.

| Mortgages and Student Loans Deputy Editor

Updated: Jan 30, 2024, 10:41am

Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.

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Returning to school for a graduate or professional degree is a big decision that more people are choosing. In fact, the National Center for Education Statistics (NCES) estimates that enrollment in master’s, doctoral and professional degree programs will increase 6% by 2031.

Graduate school can be expensive, but many students don’t realize financial aid is available. Besides loans, you can use grants, assistantships and work-study programs to finance your degree.

To access financial aid, you must complete the Free Application for Federal Student Aid (FAFSA)—the same form you filled out during undergrad. However, the FAFSA works differently for graduate students.

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Do I Need To File a FAFSA for Grad School?

Earning a master’s degree can help accelerate your career, but you may be worried about the high cost of graduate school—and with good reason. The average annual cost of tuition and fees is about $20,000 for full-time graduate students, according to the NCES.

However, there are many financial aid opportunities available, if, you fill out the FAFSA.

Submitting the form, which should take under an hour, could result in major savings. The most recent data from the NCES shows the following statistics for the 2019-2020 award year:

• 74% of graduate students received some form of financial aid
• 43% of graduate students received grants, averaging $11,300 per student
• 12% of graduate students received assistantships, worth an average value of $18,800
• 39% of graduate students took out direct unsubsidized loans
• 11% of graduate students loans took out direct PLUS loans

If you skip the FAFSA as a graduate student, you could miss out on valuable financial aid, including gift aid that doesn’t require repayment.

How Does the FAFSA Work for Grad School?

The FAFSA for grad school is pretty similar to the FAFSA for undergraduate students. You’ll need the following information for the FAFSA form:

• Federal Student Aid (FSA) ID to sign into StudentAid.gov
• Social Security number or Alien Registration number
• Account statements for your checking and savings accounts
• Information about investment accounts
• Federal income tax returns
• Records of untaxed income

However, the FAFSA for graduate school differs in several key ways:

• Dependency status. Almost all graduate students are considered independent for financial aid purposes. This means you’ll only have to enter your own income and asset information rather than your parents’.
• Aid options. Graduate students have different loan and aid options than undergraduate students. As a graduate student, the only loans you can qualify for are direct unsubsidized loans and grad PLUS, so you’re responsible for all interest that accrues on your loan. Most grad students are also ineligible for Pell Grants, though you may qualify for other types of grant aid.
• Borrowing limits. Undergraduate student loans have annual and aggregate borrowing limits. Graduate unsubsidized loans also have borrower caps, but grad PLUS loans have no borrower maximum. You can borrow up to the total school-certified cost of attendance.

Grad School FAFSA Eligibility

As with undergraduate students, graduate school applicants are only eligible for federal financial aid if they meet the following requirements:

• Are U.S. citizens or eligible noncitizens
• Are planning to attend an accredited university in an eligible degree program
• Demonstrate financial need for programs like grants and work-study

In general, any degree you pursue after earning a bachelor’s degree is considered graduate school from a financial aid perspective. Graduate school financial aid includes financing for master’s degrees, business school and doctorate programs, as well as law, medical or dental school.

Financial Aid Options for Grad School

There are several forms of federal financial aid you can receive as a graduate student, based on your FAFSA information:

• Student loans. The government uses the FAFSA to determine your eligibility for federal student loans, which tend to have lower interest rates and more repayment options than private student loans for graduate school.
• Grants. You may be eligible for federal, state or local grants based on your FAFSA information. Grants are a form of gift aid and don’t need to be repaid. For federal grants, graduate students pursuing an education degree may be eligible for the Teacher Education Assistance for College and Higher Education (TEACH) Grant.
• Work-study. Another federal program available to graduate students, the work-study program helps you get a part-time job to offset your education expenses.

Grad School Loan Limits and Fees

If you’re like most graduate students, you’ll borrow some money to pay for your degree. On average, graduate borrowers took out about $26,000 in loans for the 2019-20 school year alone. For federal loans, there are two borrowing options:

• Direct unsubsidized loans. Direct unsubsidized loans for graduate students have an interest rate of 7.05% for the 2023-24 school year. The annual borrowing limit is $20,500 and lifetime limit is $138,500; any federal loans you took out for your undergraduate degree also count toward the lifetime maximum. The loan disbursement fee for unsubsidized loans is 1.057%.
• Grad PLUS loans. Unlike direct unsubsidized loans, PLUS loans don’t have an annual or aggregate limit. You can borrow up to the total cost of attendance in your program. However, PLUS loans have the highest interest rate of all federal loan options, at 8.05% for the 2023-24 school year. They also have a disbursement fee of 4.228%.

What To Expect After You Submit Your Graduate FAFSA

Submit your FAFSA as soon as you can after the application opens each year. After you submit it, you’ll receive your federal Student Aid Report (SAR). The SAR summarizes the information on your FAFSA and explains your eligibility for financial aid. For the 2024-25 award year and onward, the SAR will be replaced with the FAFSA Submission Summary.

Contact your intended school’s financial aid office to see if there are any other steps you need to complete. Some universities have their own financial aid applications you’ll have to submit, or you may have to send in additional information to be considered for scholarships or other institutional aid.

The university will review your FAFSA information and other documents to determine your financial aid awards. They will send you a financial aid award letter detailing what grants, scholarships and student loans you’re eligible for and what steps you must complete to accept.

Once you’ve received your financial aid offer from the university and are enrolled at least half-time, any federal student loans you have from your undergraduate studies should be automatically deferred. If they’re not, you should ask the school you’re attending to report your enrollment to make you eligible for in-school deferment.

Planning for Graduate School

If you’re pursuing a master’s or another professional degree, filling out the FAFSA is an essential first step in paying for grad school. While the FAFSA for grad school has slightly different requirements than it does for undergraduate students, it can help you qualify for grants, work-study programs and federal student loans. To get the maximum amount of financial aid you deserve, apply as early as possible.