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Financial assistance is a partnership. As our part of this partnership, we will assist as many students as we can with our limited scholarship and fellowship resources. The students' part of the partnership is to eliminate consumer debt, maintain realistic expectations for standard of living as a student, investigate all possible sources of outside funding and save as much as possible. Even with this, attending will likely require significant borrowing. Only the student can decide how much debt can reasonably be incurred and still fulfill career objectives. Listed below are some key points students should consider as they plan to fund their graduate studies.
HKS has very limited scholarship and fellowship resources. At Harvard, each school maintains a separate endowment. Schools with long histories and numerous alumni have substantial endowments. Newer schools—such as Harvard Kennedy School—have a smaller number of alumni and more modest endowments. Therefore, the majority of our scholarship funds are derived from current income and resulting in more limited aid at HKS than at schools. Our modest resources results in a limited number of students receiving scholarship funding.
For most students, paying for HKS comes from a combination of personal savings and educational loan borrowing. A student in the two-year MPP program with no personal savings might borrow as much as $136,562 to cover the tuition costs and living expenses. At currently prevailing interest rates, this would result in monthly payments of $1,600 per month for 10 years. If a graduate were to devote 20% of his or her pre-tax income to making loan payments—an amount many would consider burdensome—the annual salary he or she would need to earn per year would be $96,000. This salary yields $5,280/month after taxes and student loan payments.
With many of our graduates committing to careers in public service, incurring $1,600 in monthly student loan payments can compromise their ability to commit to public service.
It is often possible—and encouraged—to reduce the amount you borrow. Every $10,000 reduction to borrowing will reduce monthly loan payments by $112 per month. Reduced borrowing is a function of minimizing expenses while attending school and eliminating any debt burden the student may have incurred before attendance.
HKS—as part of our partnership with our students—offers assistance to its graduates who take modest paying positions in the nonprofit and public sectors through our Loan Repayment Assistance Program (LRAP). However, funding is limited and eligibility is limited to a maximum of five years of assistance.
Every year a few students enroll and discover that they have not budgeted sufficient funds to meet their expenses. Often this occurs because of a lack of awareness that some expenses and obligations that students have are not necessarily expenses that can be financed through educational loans and financial aid. It is therefore important to make a realistic assessment of what these expenses are to ensure that the student begins the program with sufficient resources. For example, credit card debt is not included as an expense covered by financial aid. Therefore, if a student has credit card debt, they should make every effort to pay off the balance.
If a student brings their family to Cambridge, it is important to realize that federal regulations prohibit us from including the costs associated with dependents day-to-day maintenance in their expense budget. Therefore, the student must have sufficient savings to cover the costs that they will incur for this period.
If a student is in a two-year program, they must be sure to account for the expenses that they will incur during the summer between the two years. We will not be able to increase financial aid nor allow the student to borrow for the summer period since this period is not part of the academic year.
In planning for graduate studies, it is important to begin well in advance if the student will be depending upon financial assistance to achieve educational objectives.
When making a decision whether to attend HKS, a prospective student should consider the following: