A common refrain/question that sometimes surrounds discussions of financial aid is, “I do not consider loans to be financial aid, why do you note them as a financial aid option?”
It might not be the best analogy, but the majority of people that buy a home do so by obtaining a loan from a bank. This could be defined as “home aid” in the sense that many people cannot afford to pay for their home in cash. If a loan was not available, there would be no other option.
It is not a reach in my eyes to look at financing a graduate school education the same way. To use a personal example, without the option of taking out a loan, there is no way I would have been able to pay for my graduate education. I considered loans to be an aid in helping me to achieve my goal of a graduate education. I also took out loans for my undergraduate degree and to me loans for both programs were a worth while investment.
I have purchased and then sold one home in my life and I can tell you for a fact that my graduate degree was a far better investment. The skills and earning power I gained from my graduate degree mean more than any equity I could have earned in a home. As a bonus, my degrees do not need to be repainted or re-shingled.
To continue the home analogy, it would be rare for someone to walk up to a home with a “For Sale” sign in front and without any footwork have a realistic chance of buying it. Typically people considering a home purchase will first contact financial agencies to determine if s/he is eligible for financing and if so, how much. Buyers then engage in a search for homes that fit into their budget.
While the analogy to purchasing a home is not a perfect one, I do not think it is wise to apply for graduate school and wait until after you receive an offer to start thinking about the cost and aid options. While SIPA does allocate around $7 million each year on fellowships for students, a limited number of first year students receive funding (around 10-15%). Therefore it is wise to start thinking about how you are going to fund your education and for the average SIPA student, loans are aid that helps make attending possible.
It is not necessary to start applying for loans now, that can come if you are admitted. But it can help to read about loan terms and repayment plans. In a previous post I gave some advice on researching financial aid options so I will not revisit them here – but the moral of the story is, the more time you spend looking the better prepared you will be.