How to Reduce Student Loan Debt for Graduate School

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Brian O'Connell

By Brian O'Connell

February 6, 2020

With student loan debt load in the trillions and weighing on borrowers, the spotlight has been on undergraduate student loans. But a huge part of the student loan crisis is graduate student loans.

The average undergraduate debt load stands at $28,000, according to a study by Credible. Given that figure, the concern on undergrads is warranted – but it hardly explains the entire student loan debt crisis. Looming large in the student loan crisis scenario is an underreported student loan demographic – graduate college students.

The same study breaks down the alarmingly high level of graduate student loan debt – and it’s an eye-opener.

How much does graduate school cost? 

The average graduate school student loan debt (overall) is $84,300.

The average graduate school student loan debt for law and medical graduates (overall) is $186,000.

Broken down the price tag graduate school students face by degree shines ever a harsher light on graduate student loan debt.

Average MBA debt – $66,300

Master of arts – $72,800

Research doctorate – $108,400

PhD in education – $111,900

Average law school debt – $145,500

Average medical school debt – $246,000

Graduate college students comprise only 14% of all students attending U.S. colleges and universities – but they land 40% of all federal college loans, up from 32% in 2002 as demand for graduate degrees rise.

“We already know that the economic returns to graduate and professional degrees have been rising at a faster rate than returns to undergraduate degrees,” noted Jaymes Pyne, the report’s lead analyst.

“Combine increasing returns and increasing enrollments with a policy environment that views advanced degrees as a private rather than a public good, and you get more debt.”

Graduate students have one built-in advantage when managing student loan debt, as there are limits on the amount of loans borrowers can get on federal graduate school loans.While the actual amount of money a graduate student can borrow depends on his or her intended school, and the specific degree the student has in mind, graduate borrowers face these federal loan amount limitations:

Federal direct loans – $138,500

Federal direct loans for medical, dental, or veterinary students – $224,000

Federal PLUS loans – Up to school’s cost of attendance

How to Reduce Graduate Student Loan Debt

To work within the federal student loan mandates and get the loan you need without breaking the bank, graduate school loan borrowers should keep the following tips in mind, especially in saving for graduate school.

Take advantage of free money for graduate school. They do take more work to unearth, but digging for free graduate school aid in the form of scholarships and grants are abundant for students. Start with free financial aid websites that feature graduate student scholarships and grants – both Sallie Mae and are good places to kickstart your free graduate school college financial aid process.

Also, if your parents or grandparents opened a college savings account to help pay for your undergraduate degree and there is remaining money, you can use a 529 plan to pay for graduate school.

Get employer tuition assistance. Approximately 54% of U.S. companies do offer employee tuition assistance, making your own workplace a great place to look for graduate school financial aid. Yes, you’ll likely have to attend graduate school part-time, likely at night and on weekends, but it’s worth the time to save $50,000 or even $75,000 in student loan debt.

Your employer’s benefits officer or human resources department is the place to start asking about employer graduate school financial aid assistance. Make sure you meet with your direct manager and discuss how you plan to balance work and school (your company will want to hear your plan).

Ask specifically about any obligations attached to employer tuition aid (i.e., will you have to remain at the firm for a specific period of time after you graduate and any reimbursement issues you’ll need to cover if you leave the company.)

If your current employer doesn’t offer tuition assistance, consider finding a company that will.

Choose an affordable school and find ways to cut tuition. The cost of graduate school varies greatly by the college you choose and by the program. Compare the total cost of each program you’re interested in. Find ways to cut tuition. Inquire about opportunities for a teaching assistantship or research assistantship, which could result in a partial tuition waiver or living stipend. 

Work through school. Even if you can’t find a job that will pay for your graduate degree, it doesn’t mean you shouldn’t work throughout your time in graduate school. Every dollar you earn now is one less you need to borrow. Ideally, get a job that will continue to improve your resume, so you have an easier job landing your dream job after you graduate. Take advantage of federal work-study, if you qualify.

Choose the best student loan lender for you. If you are borrowing private student loans for graduate school, be sure to compare lenders. Of course you want to look for a low interest rate and manageable repayment options, but there are other perks to consider, too. For example, LendKey offers an opportunity to put loans in forbearance during an economic hardship. College Ave offers a nine month grace period for graduate school loans once you leave school. 

If you decide private loans are right for you, check out our objective list of the best private loans for graduate school

Keep college costs low. Do everything you can to keep costs low during graduate school. Keep living costs low by living at home with your parents (if you can), taking on a roommate or applying to be a resident assistant (which often comes with free housing). Borrow textbooks from the library or buy them used. Create a strict budget, and live within your means.

At, our goal is to help you make smart decisions about saving and paying for education. Some of the products featured in this article are from our partners, but this doesn’t influence our evaluations. Our opinions are our own.

A good place to start:

See the best 529 plans, personalized for you