Funding graduate school

NEW YORK (Money Magazine) -- Q. I have been considering an advanced degree. Are there any loans or other kinds of financial help for graduate students?  Robert, location withheld

Gerri Willis, contributing writer and host of Your Bottom Line, says ...

A. Before you worry about funding, I'd urge you to make sure that you're choosing school for the right reasons. These days many college graduates are opting for more school simply because they know the job market is tight. While extra education is generally a plus for job seekers, you'll want to be confident that you can handle the payments on any debt you take on.

Use sites like careeronestop.gov to get an idea of starting salaries for your future profession, and consider going part-time to defray the cost.

Should you decide to go for it, there's plenty of help available. Grad students are eligible to take $20,500 a year in federal Stafford loans (the interest rate is 6.8%). You can cover the remainder of the cost with federal Grad PLUS loans, which have an interest rate of 7.9% to 8.5%, depending on the school (to research loan options, go to finaid.org).

And take advantage of a new tax break: The stimulus package includes a $2,500 tax credit for students (to qualify, a single person must have an adjusted gross income under $80,000).

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