How The FAFSA Differs For Grad School for 2025

by Alex Hillsberg , MA

Student Finance & Loan Expert

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The cost of education is an age-old concern that has left numerous individuals with a hefty pile of debt long after graduation. As such, according to 2024 data, 87.3% of college students obtain financial aid to reduce their financial burden somehow. Regarding aid, the logical first option is the Free Application for Federal Student Aid (FAFSA).  

As a seasoned career planner, I created a guide about FAFSA for grad school. I also covered various areas of student aid, including the types of loans, repayment options, and FAFSA alternatives that learners might need to know.  

Key Things You Should Know About FAFSA for Grad School

• On average, 17.5 million students in the United States submit their FAFSA annually.
• The FAFSA form typically becomes available on October 1st each year for the following academic year.
• 71% of families in the United States apply for FAFSA.
• Federal loans are more budget-friendly and offer more security, while private loans have a higher financial ceiling but with higher interest.
• The average federal loan per graduate student is $17,490.

Table of Contents

1. How does the FAFSA differ for grad school for 2025?
2. What are the general eligibility requirements for FAFSA in grad school?
3. What are the key deadlines for filing the FAFSA for grad school?
4. What types of financial aid are available for grad school through FAFSA?
5. What are the differences between federal and private loans for grad school?
6. What factors should you consider before taking out student loans for grad school?
7. How can students with bad credit secure graduate school funding?
8. What common mistakes should grad students avoid when applying for FAFSA?
9. Which Graduate Programs Offer the Best Return on Investment?
10. What should I do if my FAFSA application is flagged or denied?
11. Do I need to submit additional documents besides the FAFSA for grad school aid?
12. Are online graduate programs a cost-effective alternative to traditional education?
13. When should you start applying for student loans?
14. Should I Consider Refinancing My Graduate Student Loans?
15. Are there alternative financial aid options for grad school besides FAFSA?
16. What repayment options are available for grad students after graduation?
17. How Can Students Manage Costs Beyond Loans for Grad School?
18. Can specialized certificate programs help offset graduate school costs?
19. Are there tax benefits associated with graduate education funding?
20. Could an Accelerated Bachelor's Degree Online Reduce Graduate Education Costs?
21. Other Things You Should Know About How FAFSA Differs for Grad School

How does the FAFSA differ for grad school for 2025?

There have been three major changes to the FAFSA, especially when comparing the experiences of undergraduate and graduate applicants. These are aid eligibility, the aid types on offer, and the application form. Let us delve into each area. 

• Aid Eligibility. Graduate students are generally considered independent, meaning their aid eligibility is based solely on their own financial information, not their parents'. This can simplify the application process and may result in different aid amounts compared to undergraduates. 
• Types of Aid Available. Different types of aid are available through FAFSA for grad school. While undergraduate students may qualify for Pell Grants and Federal Supplemental Educational Opportunity Grants (FSEOG), these are not available to graduate students. Instead, grad students can access Federal Direct Unsubsidized Loans and Federal Direct PLUS Loans, which have higher borrowing limits but accrue interest while in school.
• Simplified FAFSA Form. In 2024, the FAFSA form was streamlined to reduce the number of questions, making it easier and faster to complete. This update is part of a broader effort to simplify the application process for all students, including those pursuing graduate education.

Besides these, some of the differences established for FAFSA for grad school in previous years, like graduate students' higher annual disbursements and loan limits, still prevail. 

On average, 17.5 million students in the United States submit their FAFSA annually. However, less than 5 million applicants submitted their applications for this type of aid at the end of February 2024, so there could be more changes to the FAFSA in the coming weeks or months. 

How much does college cost in America? It is high enough that a large drop in FAFSA applications can raise concerns about student enrollment. 

Here's What Graduates Have to Say About FAFSA in Grad School

"I was relieved to find that the FAFSA process for grad school was much simpler than I expected. It allowed me to focus on my studies without worrying about the financial burden. Now, I can fully immerse myself in my research, advance my career and pursue my passion without any financial stress." - Malia

"I never thought I could afford law school, but the FAFSA made my dream a reality. The grant money I received opened doors to a whole new career path. Now, I'm graduating debt-free and ready to pursue a career in public interest law. FAFSA truly makes a difference!" - Akira

"Receiving FAFSA funding for grad school opened doors I never thought possible. It provided crucial financial assistance that enabled me to attend conferences, buy essential textbooks, and network with professionals in my field. The experience has been incredibly enriching." - Erin

What are the general eligibility requirements for FAFSA in grad school for 2025?

To be eligible for federal student aid through FAFSA for grad school, applicants must meet certain criteria:

• Citizenship. They must be a U.S. citizen or an eligible noncitizen.
• Social Security Number. A valid Social Security number or Alien Registration number is required. 
• Enrollment Status. The applicant must be enrolled or accepted for enrollment as a regular student in a qualifying degree or certificate program at an accredited university. 
• Financial Need (for some programs). Demonstrating financial need is necessary for specific federal aid programs such as grants and work-study.
• Academic Merit. The applicant must demonstrate academic progress.
• Good Financial Standing. An applicant must be in default on a federal loan.

What are the key deadlines for filing the FAFSA for grad school for 2025?

The FAFSA form typically becomes available on October 1st each year for the following academic year. For instance, if a student plans to begin grad school in the fall of 2024, their FAFSA would have been available on October 1, 2023, with a deadline of June 30, 2024 (11:59 PM CT).

To qualify for federal financial aid such as grants and scholarships, students must submit a FAFSA annually, regardless of being an undergraduate, graduate, or professional student. However, after submitting the initial FAFSA, renewals might be possible in subsequent years if the applicant's financial situation remains unchanged.

The table below summarizes key FAFSA deadlines:

Beyond the federal deadline for FAFSA for grad school, there are additional deadlines to consider: college-specific deadlines and state deadlines. Students should take note of these dates to partially cover the cost of college over time without too many hitches,

What types of financial aid are available for grad school through FAFSA?

Through FAFSA for grad school, graduate students gain access to various types of aid, including federal grants and loans. It can also serve as a prerequisite for other types of student aid. This is why 71% of families in the country apply for FAFSA.

Here are the general types of aid one can access: 

• Federal Direct Unsubsidized Loans. These are the most common federal loans for grad school. Unlike subsidized loans for undergraduates, interest accrues from the time the loan is disbursed, regardless of financial need. Borrowers should be aware of borrowing limits.
• Federal Direct PLUS Loans. Also known as Grad PLUS Loans, these unsubsidized loans offer higher borrowing limits than unsubsidized loans but require a credit check. 
• Federal Grants. FAFSA can determine eligibility for need-based federal grants for graduate students, such as TEACH Grants for those pursuing careers teaching high-need subjects. The average grant aid per graduate student is $10,320.
• State and Institutional Aid. Some states and institutions utilize FAFSA information to determine eligibility for their grants, scholarships, and loans, which vary depending on location and institution. Be sure to check with your desired grad schools' financial aid offices to explore additional options they might offer.

What are the differences between federal and private loans for grad school?

As a general rule, federal loans are more budget-friendly and offer more security, while private loans have a higher financial ceiling but with higher interest. The average federal loan per graduate student is $17,490.

Below, I've highlighted some of their general differences: 

Federal Loans

• Cost. Generally offer lower interest rates and fees than private loans, making them a more budget-friendly choice. 
• Repayment Flexibility. Provide income-driven repayment plans, deferment, and forbearance options, easing the burden during financial hardship. 
• Forgiveness Programs. Eligible for programs like Public Service Loan Forgiveness and income-driven repayment forgiveness, offering potential debt relief upon meeting specific requirements. 
• Credit Check. Typically, they do not require a credit check for most borrowers (except for Grad PLUS Loans), making them more accessible. 
• Borrowing Limits. Have established borrowing limits for graduate students, with a total lifetime limit to manage overall debt.

Private Loans

• Cost. Interest rates are typically higher than federal loans, leading to potentially more significant overall costs. 
• Repayment. Often have stricter repayment terms, with penalties for late payments or prepayment, demanding more stringent financial management. 
• Forgiveness. Don't offer forgiveness programs or income-driven repayment forgiveness options, leaving borrowers with the full loan amount to repay. 
• Credit Check. Usually require a credit check, potentially making them less accessible for students with limited credit history. 
• Borrowing Limits. Can offer higher borrowing limits compared to federal loans, but these limits are often capped by the school's cost of attendance.

The chart below indicates historical data on the average amount borrowed by graduate students through federal loans.

What factors should you consider before taking out student loans for grad school?

Since students have varying financial situations and access various financial aid options, there are plenty of considerations when obtaining a loan, including the loan type, interest rates, and borrowing limits.

Below, I've identified five of the most significant factors: 

• Prioritizing Completing FAFSA for Grad School. Federal loans should be the primary focus due to their generally lower interest rates, more flexible repayment options, and potential forgiveness programs. Maximize these options before considering private loans, which often have higher interest rates, stricter repayment terms, and no forgiveness available. 
• Cost and Borrowing Needs. Accurately estimate the program's total cost, including tuition, fees, living expenses, and potential lost income. Factor in how much you'll need to borrow to bridge the gap between financial aid and the total cost. 
• Future Goals vs. Debt. Consider how significant student loan debt might affect your ability to achieve other financial milestones, such as homeownership, starting a family, or saving for retirement. 
• Reducing Loan Reliance. Explore cost-cutting strategies to minimize borrowing. Options might include attending a public university, living at home while attending school, or working part-time during your studies. 
• Long-Term Financial Strategy. Develop a comprehensive financial plan that considers your graduate school debt and its long-term impact on your financial well-being. This plan should outline how you'll manage your debt repayment and integrate it with your future financial goals.

How can students with bad credit secure graduate school funding?

While federal student loans remain a primary funding source for many graduate students, those with bad credit seeking alternative options might face additional challenges. However, there are viable solutions available. One often-overlooked option is seeking private student loans no cosigner bad credit, which cater to individuals who may not have a traditional guarantor or strong credit history. These loans typically come with specialized criteria, so students should carefully review terms before applying.

Another effective strategy is improving financial literacy and exploring institutional aid opportunities specifically tailored for students with adverse credit histories. Many graduate programs offer supplemental grants, fellowships, or work-study opportunities that do not require a credit check. Additionally, focusing on building a strong application portfolio, including relevant academic achievements or professional credentials, can increase eligibility for merit-based funding.

Lastly, ensure consistent communication with financial aid offices to uncover unique institutional funding solutions. By combining these approaches with careful financial planning, graduate students can navigate funding challenges efficiently, regardless of their credit score.

What common mistakes should grad students avoid when applying for FAFSA?

Grad students should avoid errors such as inaccurately reporting financial data, overlooking updated personal information, and missing deadlines at both federal and institution-specific levels. It is crucial to verify all details against official documents to prevent processing delays or denial of aid. Applicants must also resist relying solely on default application responses without reviewing their individual circumstances. Additionally, exploring supplementary financial solutions, like reviewing SoFi student loan requirements, can help create a balanced funding strategy.

Which Graduate Programs Offer the Best Return on Investment?

When assessing graduate program options, evaluating long-term career outcomes alongside financial aid decisions is crucial. Prospective students should examine factors such as industry reputation, employment opportunities, and post-graduation salary trends. Comparative research on program performance can reveal which fields offer a more favorable return on investment, particularly in sectors where high earnings are common. Detailed insights into market trends and alumni career trajectories provide a concrete basis for decision-making, ensuring that the benefits of educational funding align with future professional growth. For guidance on lucrative academic paths, review master's degrees that pay well.

What should I do if my FAFSA application is flagged or denied?

If your FAFSA application is flagged or denied, immediately review the account notifications and verify that all entries match your official documents. Use the correction process provided on the FAFSA portal to update any inaccuracies, and consult your institution’s financial aid office for specific guidance on next steps. Additionally, consider seeking advice from a financial aid specialist to understand any additional documentation or alternative funding strategies that may be available. To explore flexible academic programs with simplified funding options, review the easiest online master's degree.

Do I need to submit additional documents besides the FAFSA for grad school aid?

Yes, each financial aid type has its own set of requirements. The FAFSA is just one among several possible prerequisites. The following includes the most frequently requested documents for FAFSA for grad school: 

• Institutional Financial Aid Forms. Some colleges and universities require students to complete their own financial aid forms in addition to the FAFSA. These forms may collect more detailed information about the student's financial situation.  
• Tax Returns and Income Documentation. Students (and their spouses, if applicable) may need to provide copies of recent federal tax returns, W-2 forms, and other income documentation to verify the information provided on the FAFSA. 
• Verification Documents. If selected for verification, students must submit additional documentation to confirm the accuracy of their FAFSA information. This could include tax transcripts, proof of income, or other financial documents. 
• Graduate Program-Specific Forms. Some graduate programs may have specific forms or applications for department-based scholarships, fellowships, or assistantships. These forms often require information about academic achievements, research interests, or professional experience. 
• Letters of Recommendation. For certain scholarships, fellowships, or assistantships, students might need to provide letters of recommendation from professors, employers, or other professionals who can attest to their qualifications and potential. 
• Statement of Purpose or Personal Statement. Many graduate aid programs, especially merit-based scholarships and fellowships, require a statement of purpose or personal statement outlining the student's academic goals, research interests, and career aspirations. 
• Academic Transcripts. Official transcripts from previous academic institutions may be required to verify academic qualifications and performance. 
• Proof of Enrollment or Acceptance. Some aid programs require documentation that confirms the student’s enrollment or acceptance into a graduate program. 
• Residency Documentation. For state aid programs, students may need to provide proof of residency, such as a driver's license, voter registration, or utility bills. 
• Employment Documentation. For work-study programs or employer tuition reimbursement, students may need to provide proof of employment or a job offer.

Of course, this does not mean that students are required to have all the documents above for every financial aid application. However, having them around comes in handy in case the aid provider requests plenty of supporting documents.

Are online graduate programs a cost-effective alternative to traditional education?

Online graduate programs often present a financially viable alternative by reducing expenses associated with on-campus attendance. Reduced tuition fees, minimal commuting costs, and flexible scheduling can allow students to maintain employment while studying, thereby offsetting overall educational costs. Moreover, such programs may offer streamlined administrative processes for financial aid applications, including opportunities to apply for federal aid through FAFSA. Prospective students should evaluate program accreditation, available digital resources, and long-term career compatibility when comparing online and traditional educational models. For insights on affordable options, review online colleges in California that accept FAFSA.

When should you start applying for student loans?

Determining the right time to apply for student loans can significantly affect the overall cost and availability of financing options. Graduate students are encouraged to integrate their loan application timeline with academic program scheduling and financial planning. Addressing this proactively not only minimizes potential delays but also ensures that students secure competitive terms in both federal and private loan markets. For guidance on creating an optimal application timeline, refer to when do you start applying for student loans.

Should I Consider Refinancing My Graduate Student Loans?

Refinancing graduate student loans can be an effective strategy to lower interest rates and secure more favorable repayment terms. It involves replacing current loans with a new loan, potentially reducing monthly payments and overall debt costs. Evaluate various lenders by comparing interest rates, fees, and loan durations before making a decision. In some cases, consulting with a student loan company can offer personalized options that best align with long-term financial goals. Consider the trade-offs, such as losing certain federal protections, and ensure that the benefits of refinancing outweigh its costs.

Are there alternative financial aid options for grad school besides FAFSA?

Students can access many other financial aid options besides FAFSA for grad school, from institutional grants to private loans. According to 2024 data from College Board, the most significant source of graduate student financial aid is federal loans, with a 62% share, followed by institutional grants (25%), private and employer grants (8%), federal veterans' benefits (3%), and federal education tax benefits (1.57%). 

So, what are the foremost options?

Scholarships

• Merit-based Scholarships. Awarded based on academic achievement, research experience, test scores, or other talents. Research opportunities offered by your program, professional organizations in your field, and national scholarship databases. 
• Need-based Scholarships. Awarded based on financial need. Check with your program's financial aid office, your undergraduate institution (if applicable), and scholarship resources targeted towards your specific demographics (e.g., minority scholarships, women's scholarships).

Grants

• Federal Grants. Certain federal grants, like the TEACH Grant for aspiring teachers in high-need subjects, are available for some graduate programs. Utilize the FAFSA for grad school to determine eligibility. 
• State Grants. Some states offer grants specifically for graduate students in certain fields. Research your state's financial aid office for details.

Tuition Reimbursement Programs

Some employers offer programs that reimburse employees for tuition costs associated with approved graduate degrees that align with their work needs. Speak with your human resources department to see if this benefit is available.

GI Bill

The GI Bill provides financial assistance for education expenses for veterans and eligible dependents. Explore the Department of Veterans Affairs website for details on eligibility and available programs (e.g., Post-9/11 GI Bill).

Professional Associations and Organizations

Many professional associations offer scholarships or grants specifically for graduate students in their fields. Research your field's professional organizations to see what financial aid opportunities they might offer.

Work-Study Programs

Federal Work-Study programs are less common for grad students than undergrads, but some universities might offer limited work-study opportunities for graduate students. Students should check with their program's financial aid office.

Teaching Assistantships and Research Assistantships

Many graduate programs offer teaching assistantships (TAs) or research assistantships (RAs) that provide financial aid in the form of tuition reduction or stipends in exchange for work performed in the program.

Besides the aforementioned options, students can get creative and leverage unconventional ways to raise funds for their education like crowdfunding and freelancing online. They can also ask friends and family for help paying their educational dues. 

The chart below provides details how much graduate students get from different sources of financial aid, including federal and nonfederal sources.

What repayment options are available for grad students after graduation?

There are plenty of ways to repay loans or at least reduce one's outstanding balance, from leveraging a standard payment plan to pursuing loan forgiveness. Here are some of the most popular options available to individuals after they graduate: 

• Fixed Payment Repayment Plans. These plans are based on the amount borrowed, interest rate, and repayment length. Options include the Standard 10-Year Repayment, Graduated Repayment, and Extended Repayment plans. 
• Income-Driven Repayment (IDR) Plans: These plans are based on family income, family size, state of residence, and repayment percentage. Options include Income-Based Repayment (IBR), Saving on a Valuable Education (SAVE), Pay As You Earn Repayment (PAYE), and Income Contingent Repayment (ICR). 
• Deferment and Forbearance. These options allow borrowers to temporarily suspend or reduce payments due to financial hardship or other circumstances. Options include deferment for up to 36 months and forbearance for up to 12 months. 
• Ascent Graduate Student Loan. Offers a nine-month grace period and 24 months of forbearance. 
• College Ave Graduate Student Loan. Offers a flexible repayment plan and a nine-month grace period.
• Federal Student Loan Forgiveness. Available for borrowers working in public service, including government, non-profit, and education sectors.

Helpful Resources 

• Federal Student Aid Website. Provides information on repayment options, loan servicers, and other financial aid resources. 
• Loan Simulators and Calculators. Tools to help borrowers compare repayment plans and make informed decisions. 
• Public Service Loan Forgiveness (PSLF) Information. Available on the Federal Student Aid website. 
• Financial Wellness Tools. Resources and calculators to help borrowers manage credit, student loan repayment, and other financial aspects

How Can Students Manage Costs Beyond Loans for Grad School?

For many graduate students, managing the cost of higher education requires a multifaceted approach beyond relying on loans. While federal and private loans serve as critical financing tools, incorporating other methods can significantly reduce the financial strain.

One practical solution is exploring small student loans as a complement to larger federal loans. These smaller loans often come with competitive interest rates and are designed to bridge gaps in funding.

Additionally, financial planning plays a pivotal role. Students can create a monthly budget to manage costs effectively and avoid unnecessary expenses. Leveraging institutional financial aid programs, applying for multiple scholarships, or participating in teaching assistantships can further offset rising educational costs.

Lastly, maintaining ongoing communication with financial aid offices helps graduate students stay updated on new opportunities for grants or reductions in tuition fees. By incorporating these strategies, graduate students can achieve a more balanced approach to funding their education without becoming overly reliant on loans.

Can specialized certificate programs help offset graduate school costs?

By integrating specialized certifications with graduate studies, students may diversify their skill sets and improve job market competitiveness. These credentials, often obtainable in a shorter timeframe and at a lower cost than traditional graduate degrees, can provide supplemental income opportunities and mitigate overall education expenses. For instance, exploring certificate programs that pay well can broaden career prospects and create alternative revenue streams during or after graduate study.

Are there tax benefits associated with graduate education funding?

Graduate students may qualify for specific tax deductions and credits that help reduce the overall cost of education. For example, the student loan interest deduction allows eligible individuals to deduct up to $2,000 of interest paid on qualified loans, subject to income limitations. Additionally, while certain tuition and fee expenses might qualify for credits, current tax laws vary, and leveraging these benefits often requires careful record keeping and consultation with a tax professional. Exploring these tax advantages as part of a broader financial strategy can effectively complement other cost-management measures—including investigating options like cheap online school.

Could an Accelerated Bachelor's Degree Online Reduce Graduate Education Costs?

Exploring alternative undergraduate pathways can minimize cumulative education expenses and alleviate future debt pressure. Accelerated bachelor's degree online programs offer a streamlined curriculum, often reducing tuition costs and shortening the time needed to earn a degree. This efficiency potentially enables earlier workforce entry and faster progression to graduate studies without excessive financial strain. For detailed program options, consider reviewing accelerated bachelors degree online.

Key Findings

• 17.5 million students in the United States submit their FAFSA annually. However, at the end of February 2024, only less than 5 million applicants submitted their applications.
• The biggest source of graduate student financial aid is federal loans with a 62% share, followed by institutional grants (25%), private and employer grants (8%), federal veterans' benefits (3%), and federal education tax benefits (1.57%).
• The FAFSA for grad school typically becomes available on October 1st each year for the following academic year.
• The average federal grant aid per graduate student is $10,320.
• The average federal loan per graduate student is $17,490.

Other Things You Should Know About How FAFSA Differs for Grad School

When is the best time to apply for FAFSA?

The best time to apply for FAFSA for grad school is as soon as possible after it becomes available on October 1 for the upcoming academic year. Applying early increases the chances of receiving aid from federal, state, and institutional programs, which often have limited funds and early deadlines. An early application also ensures timely processing and award notifications.

How often should you submit FAFSA?

A student should submit the FAFSA every year they plan to attend college, whether as an undergraduate or graduate student. Annual submission ensures federal, state, and institutional financial aid eligibility for each academic year. Even if a student's financial situation remains unchanged, they must complete the FAFSA each year to continue receiving aid.

Does FAFSA require accredited programs?

Federal student aid through FAFSA for grad school is only available for programs at accredited institutions. This accreditation, verified by a recognized agency, guarantees quality education and ensures federal funds support legitimate programs preparing students for their careers.

References: 

1. College Board (2023, October). Amount of graduate student aid provided in the United States in the academic year 2022/23, by source and type. College Board
2. College Board (2023). Trends in college pricing and student aid 2023. College Board
3. Coursera (2024, May 4). When is FAFSA due? Important deadlines for 2024 and beyond. Coursera
4. Hanson, M. (2024, May 25). Financial aid statistics. Education Data Initiative
5. Safier, R., Pentis, A., & Lowery, K. (2024, June 19). FAFSA 2024 application guide: How to access federal financial aid. CNN