Financial Aid and FAFSA Guide for Graduate Students

Editor’s Note: This article contains general information and is not intended to be a substitute for professional advice. Please consult a professional advisor before making decisions about financial issues.

Graduate school can be a good investment, but it can come with a hefty price tag. With the average cost of a master’s exceeding $70,000, you’ll likely need financial aid. In the 2024-25 school year, graduate students received almost $70 billion in grants, loans, tax breaks, and work-study funds.

Understanding the Free Application for Federal Student Aid (FAFSA) is a good first step for all students, including graduate students. But changes under the Trump administration’s One Big Beautiful Bill might leave you wondering what and how much aid you qualify for. This guide breaks down your options for graduate financial aid and what’s changing this year.

The FAFSA is an application for federal student aid. All students must complete the FAFSA to qualify for federal grants, work-study programs, and loans.

As a graduate student, you’re “independent,”” meaning you’ll only need to report your own income (and a spouse’s, if applicable).

During the 2024-25 academic year, full-time graduate students received an average of $29,160 in federal aid, according to the College Board.

The amount of financial aid you qualify for during graduate school depends on your FAFSA results and the amount you borrowed during your undergraduate years. Ending with the 2025-26 school year, you can qualify for up to $138,500 total, which includes the amount borrowed during undergrad. Students in certain health professions can qualify for up to $224,000 in loans.

Beyond federal loans, states and public and private institutions use the FAFSA to determine whether you qualify for scholarships, grants, fellowships, and other funding programs.

Congress passed the Trump administration’s One Big Beautiful Bill (OBBB) in July 2025. Among the most significant shifts are major changes to how students pay for graduate education.

Starting July 1, 2026, OBBB sunsets the Grad PLUS loan program, which previously allowed graduate and professional students to borrow up to the full cost of their program.

The bill also places caps on graduate and professional loans. Graduate students will have an annual borrowing limit of $20,500 and an aggregate limit of $100,000, which is about $30,000 less than the current max. Professional students will have a $50,000 annual limit and a $200,000 aggregate limit.

However, OBBB also narrows what degrees qualify as “professional.”

On Jan. 30, the Department of Education released a proposed rule change that revises the definition of professional degrees, limiting them to only the following fields:

If finalized as proposed, graduate students in fields previously considered “professional” — including nurses and social workers — would not be able to borrow at the higher professional loan limit, which could be a barrier to entry for many students.

The Department of Education says these loan caps will incentivize schools to lower tuition costs, but experts in impacted fields argue this is unlikely.

“The possibility of this proposal compelling institutions to lower tuition is possible but very unlikely,” Karen Fountain, an ER nurse and director of clinical services and nursing for Ingenovis Health/Fastaff Travel Nurses, an Ohio-based healthcare staffing firm, said.

“Advanced nursing programs often exceed current caps already, so schools have limited ability to cut tuition without having an impact on the quality of the clinical program. For these reasons, I do not believe it will compel institutions to lower tuition.”

Still, even if costs don’t come down and your program no longer qualifies as professional, you have options to help cover your graduate school costs.

You can utilize scholarships, grants, employer benefits, and other financial aid to pay for grad school while minimizing debt.

Some institutional scholarships only require you to file the FAFSA. But if you need more financial aid, consider applying for some private scholarships — which you don’t need to pay back — before you take out loans.

You can find merit-, need-, or demographics-based scholarships on sites like College Board, ScholarshipOwl, and Scholarships.com. BestColleges also maintains scholarship lists featuring some you might be qualified for, including:

Like scholarships, grants are a good option for graduate school because they don’t require repayment. Grants are typically awarded based on financial need.

Graduate students have fewer grant options than undergraduates, but you could qualify for some depending on your field of study. For example, graduate students pursuing teaching degrees can get up to $4,000 per year if they agree to teach in a high-need school post-graduation through the TEACH Grant.

Some professional organizations also offer grants for graduate students. One example is the American Psychological Association Graduate Students (APAGS) Student Diversity Initiative Award for doctoral students.

Institutional grants, offered by colleges themselves, were the second-largest source of funding for graduate students following federal loans in the 2024-25 school year, according to the College Board.

You can find more grant opportunities at sites like:

Fellowships, assistantships, and work-study provide funding in exchange for research, teaching, or part-time work. You also don’t need to repay these types of financial aid.

You can spend this aid on education-related expenses like housing, books, and food. Some graduate students are also eligible for employer-paid benefits like health care.

Tuition reimbursement is also a popular way to fund your graduate degree. Many graduate students are already working in their fields, and employers from massive companies like Apple to local nonprofits are willing to reimburse employees for a portion of their tuition costs.

This benefit allows you to upskill and become more specialized. Pay close attention to any corporate policy, however. Many employers will only reimburse funds for approved programs and will often require a certain GPA.

While money you don’t need to repay is always the better option, the rising costs of tuition make it increasingly difficult to graduate without student loans. Some 60% of graduate degree holders went into debt to pay for their education, according to the Federal Reserve.

The federal government offers two types of loans, often with more favorable terms than private options:

Both types of loans offer a six-month grace period before the repayment cycle begins. However, graduate students are only eligible for unsubsidized loans.

Lastly, private student loans can be a financial lifeline if you have exhausted all scholarship, grant, and federal loan options. Though they don’t always have as favorable terms as federal student loans, they can provide access to the funds you need to pursue your educational goals.

Several private lenders offer graduate school funding, including College Ave, Sallie Mae, and SoFi. Borrowers typically need a qualifying credit score or a co-signer.

According to research from the Federal Reserve Bank of Philadelphia, about 40% of graduate borrowers have low- or no credit, and would be unlikely to secure private loans. If they need more loans than what graduate student loan caps from the OBBB allow for, private lenders would need to extend credit to these borrowers to fill the gaps. However, the report notes it’s unclear whether private lenders would be willing to take on that level of risk.

“Some observers worry that many borrowers, especially those from more disadvantaged backgrounds, those with a poor or thin prior credit history, and those with no available cosigner, may not be able to get a private loan and will therefore be unable to pursue graduate study,” the Philadelphia Fed report said.