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)
Considerations
- 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
Considerations
- 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
Considerations
- 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
Considerations
- If you default on your home equity loan, you may risk losing your home.footnote 2