Lori Meadows
The Free Application for Federal Student Aid (FAFSA) covers graduate school, including master's programs. Graduate students are eligible for direct unsubsidized loans of up to $20,500 per academic year and can also apply for a Direct PLUS Loan. Additionally, students who demonstrate financial need may be eligible for the Federal Work-Study program, which provides part-time employment. There are also other financial aid options available, such as scholarships, grants, and employer tuition assistance.
| Characteristics | Values |
|---|---|
| Does FAFSA cover graduate school & masters programs? | Yes |
| Who is eligible for FAFSA? | Graduate students are eligible for direct unsubsidized loans from the U.S. Department of Education. |
| How much financial aid can be availed through FAFSA? | Graduate students can borrow up to $20,500 per academic year. |
| What are the alternatives to FAFSA loans? | Students can consider part-time classes, scholarships, fellowships, employer tuition assistance, military aid, etc. |
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What You'll Learn
Federal and state financial aid
Students pursuing their first master's degree may be eligible for state university grants, which can cover a significant portion of tuition fees. Additionally, some universities provide tuition waivers and stipends for certain graduate programs in exchange for 10-20 hours of work per week.
There are also external scholarships and loan forgiveness programs that students can explore. These vary depending on the type of master's degree and whether the program allows students to work during their studies.
It is important to note that the availability and eligibility criteria for financial aid may differ based on the university and the specific program. Students are advised to check with their university's financial aid office for detailed information on the types of aid available and the application process.
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Direct subsidized loans
FAFSA loans can be used to fund a master's degree, although there are many other financial options to consider for graduate degrees. Direct Subsidized Loans are low-interest loans offered by the US Department of Education to eligible undergraduate students who can demonstrate financial need. The Department of Education pays the interest on the loan while the student is enrolled in school for at least 6 credit hours (half-time) and during the 6-month grace period after the student ceases half-time enrollment. There is a limit on the maximum period of time, measured in academic years, that a student can receive Direct Subsidized Loans. This limit is based on the length of the student's current program of study and is generally 150% of the published length of the program. For example, if a student is enrolled in a four-year bachelor's degree program, the maximum period for which they can receive Direct Subsidized Loans is six years (150% of 4 years).
To be eligible for Direct Subsidized Loans, students must meet the general eligibility requirements and continue to be enrolled at least half-time (6 credit hours). Eligibility for these loans is also based on financial need. There are annual and lifetime limits to the amount that can be borrowed in Direct Loan funds, and there are dollar and time limits to the amount of subsidized loans that can be borrowed. First-time borrowers must complete a Master Promissory Note and Entrance Counselling before the loan funds can be disbursed. The Master Promissory Note is an agreement to pay back all borrowed Direct Subsidized or Unsubsidized Loans.
Direct Unsubsidized Loans, on the other hand, are available to eligible undergraduate, graduate, and professional students, but students do not have to demonstrate financial need to be eligible. Graduate students are not eligible for need-based aid, but they can still fill out the FAFSA to find out how much non-need-based aid they qualify for. There are also state and federal grant programs, such as Pell and NYS TAP, that are only available to students who have not yet received a bachelor's degree. Additionally, some schools may provide tuition waivers and stipends for certain graduate programs in exchange for 10-20 hours of work per week.
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Direct unsubsidized loans
FAFSA student loans can be used to pay for a master's degree. Graduate students are not eligible for need-based aid, but they can still fill out the FAFSA to find out how much non-need-based aid they qualify for. Direct Unsubsidized Loans, sometimes called Unsubsidized Stafford Loans, are federal loans provided through the Direct Loans program. They are available to undergraduate, graduate, and professional students, offering a fixed, low-interest rate and flexible repayment plans.
Unlike subsidized loans, borrowers are required to cover all the interest that accrues on unsubsidized loans until the loan is completely repaid. Interest begins accruing on these loans as soon as they are disbursed. Direct Unsubsidized Loans have a six-month grace period once the student drops below half-time enrollment or completes their program. For the 2025-2026 academic year, the fixed interest rate for graduate and professional students is 7.94%.
Undergraduate students can borrow up to $5,500 in the first year (varies for dependent/independent status) and up to $7,500 per year afterward. Graduate students are eligible for $20,500 in unsubsidized loans and a GRAD PLUS loan up to the cost of attendance. Income-driven repayment plans are dependent on the borrower's income and family size.
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Grad PLUS loans
Graduate and professional students can take advantage of Grad PLUS Loans to help pay for school. These loans are issued by the U.S. Department of Education and are available to students attending graduate school and professional school.
To be eligible for a Grad PLUS Loan, you must be enrolled at least part-time in an eligible school in a program leading to a graduate or professional degree or certificate. Additionally, you must meet the general eligibility requirements for federal student aid, including being a U.S. citizen or eligible non-citizen, having a Social Security number, and making satisfactory academic progress. It's important to note that the Grad PLUS Loan program has an elimination date of July 1, 2026, impacting those seeking new loans after that date.
The interest rate for Grad PLUS Loans is typically higher than for direct unsubsidized loans, and there is an origination fee charged by the Department of Education. The loan amount is based on the cost of attendance at the graduate school, and there is no borrowing limit. However, for loans disbursed between July 1, 2025, and July 1, 2026, the interest rate is set at 8.94%, and the borrowing limit is $20,500 per year for graduate students and $50,000 per year for professional students.
To apply for a Grad PLUS Loan, you must first complete the Free Application for Federal Student Aid (FAFSA). After submitting the FAFSA, you can start the Grad PLUS Loan application process, which requires providing personal and academic information, including your FSA ID, school name, and permanent mailing address. If you are eligible, you will need to agree to the loan terms by signing a Master Promissory Note.
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Scholarships
Graduate school can be expensive, but financial aid is available through the FAFSA. The FAFSA is a standard application used by educational institutions throughout the US to determine student eligibility for federally subsidized financial aid. This includes scholarships, which are a traditional option available to graduate students.
There are several scholarships that graduate students can apply for, including federally funded scholarships, state-funded scholarships, and locally funded scholarships. Federally funded scholarships can be accessed simply by filling out the FAFSA. Each state also has a variety of financial aid allocated for its residents, with many awards designated for individuals working in public service or for degrees in high demand in the area. For example, Massachusetts designates specific scholarships for residents pursuing a degree in the STEM or healthcare fields. Local aid is also available, and students can check with their city's chamber of commerce and local businesses to see if locally funded scholarship money is available.
Students can also explore employer-sponsored scholarships, which are offered by some employers to their employees, even if they are part-time or contract workers. Additionally, many universities offer their own scholarships, so it is important to check with the school's financial aid office to see what opportunities are available.
It is recommended to submit the FAFSA application as early as possible, as grants and scholarships are often awarded on a first-come, first-served basis. The amount of aid available through the FAFSA for graduate school also depends on the student's particular program and educational facility.
In addition to scholarships, graduate students may be eligible for work-study programs, fellowships, and federal loans through the FAFSA.
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Frequently asked questions
Yes, FAFSA covers master's degrees. Graduate students are eligible for direct unsubsidized loans of up to $20,500 per academic year.
There are many other financial options to look into for master's degrees, including scholarships, private graduate school loans, and state and federal grant programs.
FAFSA stands for the Free Application for Federal Student Aid. It is a free online form provided by the U.S. government to apply for financial aid for education.
