Can You Get Financial Aid for Graduate School?

Financial aid for graduate school comes from five main sources: federal student loans, a single narrow federal grant, institutional fellowships and assistantships, the Federal Work-Study program, and tax benefits that reduce what you actually pay. Nearly all of it starts with one form, the FAFSA, and most graduate students end up combining several sources to cover tuition and living costs.

The mix looks different from undergraduate aid. Pell Grants are gone. Federal loan interest rates are higher, and the government no longer subsidizes interest while you’re enrolled. On the other side of the ledger, universities themselves put up more money for graduate students through fellowships, teaching assistantships, and research assistantships than they do for undergraduates, and some of that funding covers tuition entirely.

Federal Grants Available to Graduate Students

The Federal Pell Grant, the largest need-based grant program, is restricted to students who have not yet earned a bachelor’s or professional degree.¹ Graduate students cannot receive a Pell Grant under any circumstances.

The one federal grant still open to graduate students is the TEACH Grant. It funds students in programs preparing them to teach in high-need fields such as math, science, special education, bilingual education, and foreign language, and it’s available for a master’s degree or postbaccalaureate teacher certification.² There is a real catch attached. If you don’t complete the required teaching service after graduation, the grant converts into a federal loan with interest charged retroactively from the date of disbursement. Treat a TEACH Grant as conditional money, not free money.

Fellowships, Assistantships, and Scholarships

For many graduate students, the most valuable funding comes from the university itself. Awards vary widely by school, program, and field, so what’s available depends heavily on where and what you study.

Fellowships are usually merit-based. They can provide tuition support, a stipend, research funding, or some combination. Some come from the university, others from external organizations or federal agencies such as the National Science Foundation. Fellowships don’t have to be repaid.

Teaching assistantships involve leading discussions, grading, or running labs under a faculty member’s supervision. Research assistantships support a professor’s academic or laboratory research. Both typically pay a monthly stipend and often include a full or partial tuition waiver. Positions are competitive and tied to departmental needs, so contacting your department early in the application process is worth the effort.

A tuition waiver tied to a teaching or research assistantship carries a quiet but important tax benefit: under federal law, the waiver is excluded from your taxable income as long as you’re a graduate student engaged in teaching or research for the university.³ Stipend payments for living expenses are generally still taxable.

Federal Work-Study

The Federal Work-Study program lets graduate students earn money through part-time employment without adding to their loan balance. Jobs are often related to your field of study or serve the campus community, and graduate students can be paid hourly or by salary depending on the position.⁴ Your allowed hours depend on your financial need, and your school will weigh how work might affect your academic progress.

Two conditions govern eligibility: your school has to participate in the program, and funds have to be available. Not every school offers work-study, and those that do have limited allocations. Filing the FAFSA is the only way to be considered.⁴ At most schools you’re expected to find, apply for, and interview for positions yourself rather than being matched automatically.

Federal Loans for Graduate Students

Most graduate students borrow at least some money through federal loans. Two programs are available: the Direct Unsubsidized Loan and the Direct PLUS Loan for Graduate and Professional Students. Neither is subsidized, meaning every dollar starts accruing interest the day your school receives the funds.

Direct Unsubsidized Loans

Graduate students can borrow up to $20,500 per academic year in Direct Unsubsidized Loans. Your total federal student loan debt across undergraduate and graduate study cannot exceed $138,500, and no more than $65,500 of that can be subsidized loans from your undergraduate years.⁵

Starting July 1, 2026, students in certain professional degree programs (including medical, law, optometry, podiatry, and chiropractic programs) can borrow up to $50,000 per year in Direct Unsubsidized Loans, with an aggregate cap of $200,000. Nursing, physical therapy, and occupational therapy students are classified as graduate students and stay at the $20,500 annual limit.

Repayment begins six months after you graduate, leave school, or drop below half-time enrollment.⁶ Interest keeps accruing during that grace period. If you don’t pay it, the unpaid interest capitalizes onto your principal balance and increases what you owe over the life of the loan.

Grad PLUS Loans

If the unsubsidized loan doesn’t cover your full cost of attendance, the Direct PLUS Loan for Graduate and Professional Students fills the gap up to the total cost of attendance minus any other financial aid you receive. PLUS loans require a credit check. The Department of Education looks for specific adverse events, including bankruptcy within the past five years, accounts currently 90 or more days delinquent, defaulted federal loans, tax liens, and unpaid collection balances.⁷

Adverse credit isn’t an automatic disqualifier. You can still receive a PLUS loan by getting an endorser who agrees to repay if you don’t, or by documenting extenuating circumstances to the Department of Education.⁸

Interest Rates and Origination Fees

Federal student loan rates are set annually based on the 10-year Treasury note yield and stay fixed for the life of the loan. For loans first disbursed between July 1, 2026, and June 30, 2027:

Both loans carry origination fees deducted from each disbursement before you or your school receives the money. For loans disbursed before October 1, 2026, the fee is approximately 1.057% on Direct Unsubsidized Loans and 4.228% on PLUS Loans.⁸ On a $40,000 PLUS loan, that fee is roughly $1,690 that never reaches your account.

Repayment and Forgiveness to Weigh Before You Borrow

Graduate borrowers tend to leave school with much larger balances than undergraduates, so it’s worth understanding your repayment and forgiveness options before you sign the promissory note.

Income-Driven Repayment

Income-driven repayment (IDR) plans cap monthly payments at a percentage of your discretionary income rather than tying them to your balance. For graduate borrowers with loans disbursed before July 1, 2026, two plans are generally available: Income-Based Repayment for new borrowers (payments at 10% of discretionary income, forgiveness after 20 years) and Pay As You Earn (also 10%, also 20 years).

Neither IBR nor PAYE will be available to borrowers whose loans are first issued or consolidated on or after July 1, 2026.¹⁰ The SAVE plan is currently on hold due to court orders and is set to be eliminated for all borrowers by July 1, 2028. The repayment picture for new graduate borrowers is unsettled, so check studentaid.gov for the current options before you commit to a borrowing plan.

One tax detail to keep in view: any balance forgiven under an IDR plan after 20 or 25 years may be treated as taxable income in the year of forgiveness. A temporary provision has excluded forgiven student loan amounts from taxable income, but that provision is scheduled to expire at the end of 2025.

Public Service Loan Forgiveness

Public Service Loan Forgiveness (PSLF) forgives the remaining balance on your Direct Loans after 120 qualifying monthly payments made while you work full-time for an eligible employer. Qualifying employers include federal, state, local, and tribal government agencies and tax-exempt 501(c)(3) nonprofits. Part-time employment does not count. The 120 payments don’t have to be consecutive, but each must be on time, for the full amount due, and made under a qualifying repayment plan (typically an IDR plan).

Unlike IDR forgiveness, PSLF forgiveness is tax-free under current law. Starting July 1, 2026, the Department of Education will have authority to disqualify certain organizations from PSLF eligibility, so confirming your employer’s status through the PSLF Employer Search Tool on studentaid.gov is worth doing before relying on the program.

Tax Benefits That Lower the Real Cost

The tax code offers a few provisions that reduce what a graduate degree actually costs. They’re easy to overlook while you’re enrolled and worth real money at tax time.

Lifetime Learning Credit

The Lifetime Learning Credit provides up to $2,000 per return, calculated as 20% of the first $10,000 in qualified education expenses (tuition and required enrollment fees). It’s available to graduate students with no limit on the number of years you can claim it. Income limits apply: your modified adjusted gross income must be below $90,000 for single filers or $180,000 for joint filers, and you can’t claim the credit if you file as married filing separately.¹¹

Employer Educational Assistance

If your employer offers a tuition assistance program, up to $5,250 per calendar year in educational benefits can be excluded from your taxable income.¹² It covers tuition, fees, and books your employer pays for graduate coursework and applies whether or not the education is job-related. Employers in healthcare, technology, and professional services often offer this benefit; ask about it even if it’s not advertised.

Assistantship Tuition Waivers

Tuition reductions for graduate students who teach or conduct research are excluded from gross income under federal law.³ A TA with a $25,000 tuition waiver owes no income tax on that amount. Stipend payments for living expenses are generally taxable.

Eligibility Requirements

Federal aid for graduate students has several baseline requirements. You must be a U.S. citizen, a U.S. national, or an eligible noncitizen such as a lawful permanent resident.¹³ You need a valid Social Security number and must be enrolled in an eligible degree or certificate program at a participating school. Most federal loan programs require at least half-time enrollment.

You also have to maintain Satisfactory Academic Progress (SAP) toward your degree. Each school sets its own policy, but federal regulations require the policy to measure both a minimum GPA and pace of completion (the percentage of attempted credits you’ve successfully completed).¹⁴ Falling below these thresholds costs you aid eligibility for future terms, though most schools offer an appeal process. You also cannot be in default on any existing federal student loan.

How to Apply

Every form of federal graduate aid starts with the Free Application for Federal Student Aid (FAFSA). Filing is free at studentaid.gov. For the 2026–2027 academic year, the federal deadline is June 30, 2027, but individual schools and states set their own deadlines, some as early as February or March, so filing promptly matters.¹⁵

What to Have Ready

Create an account at studentaid.gov before starting. That account serves as your electronic signature for the application and for future federal loan documents. Gather your Social Security number, federal tax return information, records of untaxed income, and current bank and investment balances. Your primary home is excluded from asset reporting. Have the federal school code for each institution you’re considering so your data reaches the right financial aid offices.

The FAFSA now pulls tax information directly from the IRS through a real-time data exchange, replacing the older manual entry.¹⁶ Review the transferred data for accuracy before you submit.

After You Submit

You’ll receive a Student Aid Report summarizing what you provided and flagging anything that needs correction. Your school’s financial aid office then puts together an offer detailing the loans, grants, work-study, and institutional funding available to you for the year.

To finalize your aid, accept the offer through your school’s student portal. Borrowers also complete a Master Promissory Note (MPN) for each loan type: one for Direct Unsubsidized Loans and a separate one for PLUS Loans.¹⁷ The MPN is a binding agreement to repay the loan plus interest and fees. First-time graduate borrowers also complete entrance counseling, which walks through your repayment obligations before any funds are released. Once these steps are done, money is disbursed directly to your school for tuition and fees, and any remaining balance is refunded to you for other education expenses.

1
Federal Student Aid. Student Eligibility for Pell Grants
2
Federal Student Aid. Eligibility for TEACH Grants
3
Office of the Law Revision Counsel. 26 USC 117 – Qualified Scholarships
4
Federal Student Aid. 8 Things You Should Know About Federal Work-Study
5
Federal Student Aid. Subsidized and Unsubsidized Loans
6
Federal Student Aid. Federal Student Aid – Grace Period
7
Federal Student Aid. Direct PLUS Loans for Graduate or Professional Students
8
Consumer Financial Protection Bureau. What Is a Direct PLUS Loan?
9
Federal Student Aid. Interest Rates for Federal Direct Loans First Disbursed Between July 1, 2026, and June 30, 2027
10
Federal Student Aid. Income-Driven Repayment Plans
11
Internal Revenue Service. Education Credits – AOTC and LLC
12
Office of the Law Revision Counsel. 26 USC 127 – Educational Assistance Programs
13
Federal Student Aid. US Citizenship and Eligible Noncitizens
14
eCFR. 34 CFR 668.34 – Satisfactory Academic Progress
15
Federal Student Aid. FAFSA Deadlines
16
Internal Revenue Service. Tax Information for Federal Student Aid Applications
17
Federal Student Aid. Completing a Master Promissory Note