Graduate School Funding: Grants, Fellowships, and Work Options

Overview

Graduate students face high tuition and living costs, but multiple funding paths exist beyond federal student loans. Grants, fellowships, and work options (such as teaching or research assistantships, campus employment, and employer tuition assistance) are the primary mechanisms many students use to finance a master’s or Ph.D. Unlike loans, grants and fellowships typically do not require repayment, making them particularly valuable for controlling long-term debt.

This article explains how each option works, who typically qualifies, practical steps to find opportunities, and real-world strategies I’ve used while advising graduate students over the past 15 years.

How grants differ from fellowships and work options

• Grants: Usually need-based or program-specific awards that do not require repayment. Federal grant programs (e.g., TEACH Grant for eligible teacher-preparation programs) and some state or institutional grants can apply to graduate study. Note that the Pell Grant is primarily for undergraduate students and most graduate students are not eligible (U.S. Department of Education: studentaid.gov).

• Fellowships: Competitive, merit-based awards that often include a stipend and tuition remission or direct tuition payment. Fellowships support research, creative work, or professional development. Examples include NSF graduate research fellowships (NSF GRFP), NIH training grants and fellowships, Fulbright awards for study or teaching abroad, and foundation fellowships (NSF, NIH, Fulbright program sites).

• Work options: Paid roles tied to the university (teaching assistantships, research assistantships, and other jobs) that can include tuition remission and a living stipend. Federal work-study exists but is more common at the undergraduate level; many graduate assistantships are funded by departments or external research grants.

(For authoritative federal guidance on federal student aid and forms, see studentaid.gov.)

Where to look: prioritized search strategy

1. Start with the graduate school’s financial aid and departmental pages. Departments advertise assistantships, fellowships, and tuition remission packages for admitted students.
2. File the FAFSA early. Even if you expect scholar- or assistantship-based funding, many programs require FAFSA to determine institutional aid eligibility. See our detailed FAFSA guide for application tips and timing.
3. Search agency and foundation programs by field (NSF, NIH, Fulbright, discipline-specific societies). Professional associations often list external fellowships.
4. Consult your advisor and senior faculty for research grant-funded RA positions. Faculty grants (e.g., NIH R01, NSF awards) commonly support research assistants.

Internal resources you may find useful:

• FAFSA: https://finhelp.io/glossary/fafsa/ (guides to completing the FAFSA and what it affects)
• How College Work-Study Affects Your Financial Aid Package: https://finhelp.io/glossary/how-college-work-study-affects-your-financial-aid-package/ (explains work-study and student employment differences)
• Using Employer Tuition Benefits Without Losing Financial Aid: https://finhelp.io/glossary/using-employer-tuition-benefits-without-losing-financial-aid/ (how employer tuition assistance can intersect with other aid)

Typical funding packages and what they cover

• Full funding (common in many Ph.D. programs): tuition remission, health insurance, and a living stipend via a combination of fellowships, TA/RA positions, or institutional scholarships. These packages aim to allow full-time study without outside employment.

• Partial funding (common for master’s students): may include tuition discounts, partial scholarships, or graduate assistantships that cover a portion of tuition and provide a modest stipend.

• External fellowships: may pay a stipend and sometimes tuition directly to the institution. External awards can be prestigious (helping CVs) and flexible, but may not fully cover all costs.

Eligibility and application mechanics

• Grants: Often require demonstrated financial need and a completed FAFSA for federal or institutional need-based awards. Some state grants have residency and program-field restrictions.

• Fellowships: Typically merit-based. Application packages commonly ask for a CV, research or project proposal, personal statement, transcripts, and letters of recommendation. Deadlines vary widely—many are at least several months before funding begins.

• Assistantships and on-campus work: Departments set requirements. Typical conditions include enrollment in the program, minimum credit load, and maintaining satisfactory academic progress (GPA). Some assistantships are renewable; others are semester-to-semester.

Real-world examples and my observations

• STEM Ph.D. candidate: A student I advised combined an NSF GRFP fellowship with a departmental RA. The NSF stipend reduced dependence on departmental funds, and the RA provided tuition remission and access to lab resources.

• Professional master’s student: A former client received a university merit scholarship plus part-time employment in the career services office. The combined package covered most tuition and improved her post-degree networking.

• Mid-career worker using employer tuition assistance: I’ve worked with professionals whose employers paid tuition under a $5,250 employer exclusion or through formal tuition benefit programs. Always check how employer benefits interact with other aid and tax rules (see our guide on employer tuition benefits).

Tax and reporting notes

• Employer tuition assistance up to $5,250 per year may be excluded from taxable income for qualified education benefits (IRS rules). Amounts above that may be taxable. Consult your tax advisor or IRS publications for details.

• Stipends and fellowships used for living expenses are often taxable unless they cover qualified tuition and required fees and the recipient is a candidate performing services as an employee (tax treatment can vary). Keep careful records and consult a tax advisor.

Common mistakes and how to avoid them

• Assuming Pell Grants apply to graduate study: Pell is mainly for undergraduates; verify eligibility before counting on it.

• Missing internal deadlines: Departmental assistantship applications often close earlier than general financial aid. Contact the graduate program coordinator as soon as you apply or receive admission.

• Failing to read award terms: Some awards are contingent on enrollment level, research progress, or service obligations (e.g., TA duties).

• Overlooking nontraditional sources: Professional societies, foundations, and state programs sometimes offer smaller awards that add up.

Practical application tips

1. Build a strong dossier—research statement, polished CV, and targeted recommendation letters help for fellowships.
2. Apply broadly—submit to both internal (departmental) and external (foundation, federal) opportunities.
3. Negotiate intelligently—if you receive multiple offers, ask admitted programs about matching funds or additional assistantship opportunities (institutional aid offices can confirm whether an offer is negotiable).
4. Track deadlines with a spreadsheet and set reminders 6–12 months before program start dates.
5. Use university career and financial aid offices to review award letters and compare net cost.

FAQs

• Will filing the FAFSA reduce my chances of getting merit-based scholarships?
  Filing the FAFSA does not reduce your chances; many schools require it to determine institutional need-based aid and to verify eligibility.

• Are research assistantships better than fellowships?
  They serve different needs. RA positions often tie you to a specific project and faculty mentor and can provide tuition remission; fellowships may offer greater autonomy and prestige. Evaluate both for financial value and career alignment.

• Can I hold multiple awards?
  Often yes, but read the terms. Some external fellowships may prohibit concurrent institutional funding; others allow stipends plus tuition remission. Ask the awarding offices in writing to avoid conflicts.

Closing advice

Treat graduate funding as part of your academic strategy. Prioritize programs that offer transparent, renewable funding packages if reducing debt is a primary goal. In my advising practice, students who combined early research engagement with disciplined fellowship applications had the highest success rates securing multi-year funding.

Professional disclaimer

This article is educational and does not constitute personalized financial, tax, or legal advice. For individual guidance on tax treatment or complex award interactions, consult a certified public accountant, tax professional, or the financial aid office at the institution you plan to attend.

Authoritative sources and further reading

• Federal Student Aid (U.S. Department of Education): https://studentaid.gov
• National Science Foundation (GRFP): https://www.nsf.gov/funding/education.jsp
• National Institutes of Health training and fellowship programs: https://www.nih.gov
• Fulbright Program: https://us.fulbrightonline.org