Alternative ways to pay for graduate school
Here are some benefits and considerations for alternatives you may be considering to help you pay for graduate school.
Borrowing or withdrawing money from your 401(k)
- You can withdraw or possibly borrow money for graduate school (if your employer’s plan allows it) from your 401(k) account.
- You may pay a penalty on a withdrawal from your 401(k).
- Lost investment growth for retirement
Using a credit card to help pay for graduate school
- You can pay for graduate school quickly and easily if you already have a credit card.
- You should research current credit card rates in comparison to other financing options for graduate school.
- Your school may charge you a processing/convenience fee for paying for graduate school with a credit card.
Using a personal loan to help pay for graduate school
- If you have excellent credit and apply for a personal loan, you may be able to get money for graduate school in a few days.
- Some personal loans don’t let you use them for educational purposes.
- The interest rate on a personal loan may be higher than federal and private graduate student loans.
- Personal loans may come with a shorter repayment term, which can mean higher monthly payments.
- Since they aren’t designed to pay for graduate school, personal loans generally won’t have features like grace periods, repayment options, or deferment.
Borrowing against the equity of your home to help pay for graduate school
- You can use the equity of your home as collateral for a loan to help pay for graduate school. You should research average HELOC (Home Equity Line of Credit) interest rates to learn more.
- If you default on your home equity loan, you may risk losing your home.