Financial planning tips from Madhuri

Admissions GA MadhuriMadhuri is enjoying a well-deserved break after finishing her first semester at Fletcher. The prospective student experience is still relatively fresh for her, though, and she put together a number of helpful tips for financial planning (and you can expect additional future posts related to scholarship and financial aid on this blog). As you prepare to submit your application and await decisions, getting going on financial planning is an important process on which to focus.

As prospective applicants wrap up their essays and add final touches, the application season transitions into scholarship season. While preparing applications to graduate school and receiving acceptance letters feel like a gargantuan job, it’s only a task half done. The other mammoth part of preparing to go to the graduate school of your dreams is planning finances. Whether you’re an early admit or applying within the regular deadline, I hope the below tips will help to arrange for finances in a stress-free manner.

1.    Start early

A good rule of thumb to follow is that preparation, application, and receipt of financial aid takes about twice the amount of time it takes for graduate school applications. So, to all you early admits, now is a great time to gear up for financial aid preparation. And all those applying within the regular deadline, don’t wait till your admission decision in March to start looking for financing!

2.    Know the cost of your education

Depending upon the kind of university (state vs. private), location, and duration of your program, the cost of one’s education (including boarding and lodging) can swing wildly. Having estimates of such costs and their prospective increments can benefit your financial planning.

3.    Pay back old debt

Pay back old student debt and credit card bills as soon as possible. Having extra debt is not only a burden on your current finances but worsens the terms you can bargain on in case you decide to go for additional student loans.

4.    Cast your net far and wide, and hedge!

Given enough time you can research and apply to a plethora of financial aid providers, reducing the need and scope of self-financing. Also it is important to note that very rarely will one source of funding fulfill financial needs entirely, thus it is better to have more options. Below are some of opportunities I explored last year while preparing to matriculate at Fletcher.

a.    Graduate School Scholarships

This is a no-brainer! Applying for financial aid along with your application submission is one of the easiest ways to reduce one’s financial burden. My Fletcher scholarship was instrumental in planning my finances for grad school.

b.    Local Scholarships

Almost every state or city in all countries has local organizations that offer scholarships to students for higher education. For instance being in Mumbai, India I applied to and received scholarships from the American Alumni Association, Neterwala Foundation and TataChem Golden Jubilee Foundation. My research involved speaking to local GRE/GMAT test preparation providers, which invariably also have an exhaustive roster of financial aid opportunities.

c.    National Scholarships

Depending upon your country, background, and prospective area of study there are several national level scholarships available for graduate school. Again in India some of the common ones as the KC Mahindra Scholarship, JN Tata Endowment Scholarship and Aditya Birla Scholarship. These of course are more competitive than a city or state level scholarship so require extra attention while writing the required essays and providing recommendations.

d.    International / Global Scholarships

Lastly, one can look at global or international scholarships which are usually open to applicants from a whole host of countries. The Japan-World Bank Scholarship, Aga Khan Foundation Scholarship, and the American Association for University Women scholarship are some examples.

e.    Public Loan Providers

Beyond scholarship providers the next source of funding is from student loan providers. Public banks or federal loans usually have much lower interest rates which are beneficial for students but may have other constraints. For instance, in India most public banks require collateral and/or co-signers, and take inordinately long to process.

f.    Private Loan Providers

Private loan providers will charge a higher interest rate, but are also more convenient in terms of processing and the maximum amount requested. Also having good GRE/GMAT scores can help reduce interest rates substantially.

g.    Other Financiers

Lastly, there are financiers such as MPower Financing which are specifically catered to international students going for graduate programs in the United States. The rates provided are comparable to those by local private loan providers, however the upside they provide is financing in US dollars which hedges you from adverse currency risk fluctuation. I secured a certain amount of funding from MPower Finance and this was a major benefit for me as the Indian Rupee depreciated all of last year. Repayment of these loans helps you to build credit history, and they offer easy online processing with minimal paperwork and no need for collateral or co-signers.

Funding graduate school is an expensive affair and one wants to avoid being saddled in debt for years after completing a program. It is advisable to start searching for financing early and exhaust as many resources as possible to have a stress free experience at graduate school and beyond.

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