Other ways to pay for graduate school

If you’re thinking about using alternative ways to fund graduate school, here are some factors to consider.

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.footnote 1
  • 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.footnote 2


  • If you default on your home equity loan, you may risk losing your home.

Sources of extra money for graduate school

These may not pay for all of your graduate school tuition, but they can help you with living expenses or even a book or two.

  •  “Found” money
    Your income tax refund, a pay raise, or those childhood savings bonds can mean additional cash for graduate school.
  •  Employer reimbursement
    Check with your employer to see if they offer some form of education benefit, particularly when the coursework is job-related. Even if there isn’t an official program in place at your job, it doesn’t hurt to ask.
  •  Work-study
    Resident assistant (RA): You can get free room and board or tuition in exchange for living in the dorm and overseeing a group of students, typically undergraduates.
    Teaching or research assistantships: These positions generally cover at least part of the tuition bill (sometimes plus a modest stipend) in exchange for teaching or researching. The experience you gain is a great resume builder.

To apply for work-study through the Federal Work-Study Program, fill out the FAFSA®.

Related topics

footnote 1. This information was gathered on 04/14/23 from https://www.creditcards.com/news/rate-report/.

footnote 2. This information was gathered on 04/14/23 from Bankrate.com, http://www.bankrate.com/home-equity.aspx.

footnote Sallie Mae does not provide, and these materials are not meant to convey, financial, tax, or legal advice. Consult your own financial advisor, tax advisor, or attorney about your specific circumstances.

footnote External links and third party references are provided for informational purposes only. Sallie Mae cannot guarantee the accuracy of the information provided by any third parties and assumes no responsibility for any errors or omissions contained therein. Any copyrights, trademarks and/or service marks used in these materials are the property of their respective owners.

footnote FAFSA is a registered service mark of U.S. Department of Education, Federal Student Aid.