Cover Story

Brie Kohrt has always been leery of taking on too much debt. The second-year clinical psychology doctoral student expects to owe just $25,000 by the time she leaves the Catholic University of America. That's $35,000 less than the median debt-load of new psychologists in 2005.

Even in the best of times, she points out, psychology is hardly a lucrative career. "It's really scary to think about having to pay back all this money without having the same job security you'd have in other fields."

The university gives Kohrt tuition remission and a stipend of $2,000 per semester, which doesn't go far in pricey Washington, D.C. To make ends meet, she works 20 hours a week as a research fellow at the National Cancer Institute, doing both research and clinical work.

"It's certainly applicable and I enjoy it, but at the same time I wish I could just devote myself to my graduate studies," she says. Kohrt also takes out an $8,500 federal loan each year. But even with meticulous planning and frugal spending, she had to borrow rent money from her dad in September.

Grad students have always had to keep careful tabs on their funding, but the current economic crisis "has certainly raised the anxiety level," says Kay DeVesty, director of the Office of Financial Aid and Scholarship Programs at Syracuse University. However, students still have plenty of options when it comes to finding funding, whether that means loans, fellowships or gifts from family members or even strangers, say experts.

  • Focus on money you don't have to pay back. Try to find funding sources that aren't loans, such as scholarships, assistantships and jobs, says DeVesty. "We always say that should be people's first choice," she says. Ask your department chair or director of graduate studies about fellowships and assistantships, or search such sites as www.apa.org/science/apassc-funding.html and www.fastweb.com.

  • Borrow wisely. If you need a loan, turn to the federal Stafford loan program first. If you need more than the Stafford program maximum—$138,500 total for your undergraduate and graduate education combined—go for a federal graduate PLUS loan. These allow you to borrow up to the entire cost of your education, including tuition, room and board, travel and the like. PLUS loans are especially useful if you unexpectedly hit your Stafford loan limit and find yourself scrambling. That's because you can apply for it up to the last day of classes, says DeVesty. But only borrow what you need, she cautions. Graduate students can borrow up to $8,500 a year through the Stafford loan program, "but just because you can doesn't mean you have to."

  • Get a little help from your friends. If you have to go for a private student loan, you'll probably need a credit-worthy co-signer. "Lenders use the higher of the two credit scores to determine eligibility and to determine fees and interest rates," explains Mark Kantrowitz, publisher of www.finaid.org. If your family or friends won't help out by co-signing loans, lending you money directly or offering gifts, cast a wider net. Peer-to-peer lending sites such as www.fynanz.com, www.greennote.com or www.virginmoney.com allow would-be borrowers and lenders to connect over the Internet. But be sure to check the interest rate and other details before you commit. In some cases, says Ann Tran, a student at the California School of Professional Psychology, their rates are higher than a credit card's.

  • Ask about payment plans. Can't write a giant tuition check all at once? Ask the bursar's office at your university if you can pay in installments. "Maybe you won't have to borrow so much if you can spread out the payments," says DeVesty, noting that Syracuse offers a monthly payment plan. At some schools, there may be a small fee.

  • Stay calm. Living within a budget can help calm your nerves. "As graduate students, we don't have that much to begin with," says Tran. "I think we're being more conscious about budgeting than we have been before." Among Tran's peers, eating out has been the first expense to be cut.

However, students need to keep the wider economic turmoil in perspective, she says. "I think that all of us need to take a deep breath," says Tran. "We need to stay focused and not let this stress us out more."

By Rebecca A. Clay


Rebecca A. Clay is a writer in Washington, D.C.