Everything You Wanted To Know About The Finances Of Getting A PhD (But Were Afraid To Ask)

PhD-student_mainToday’s installment of our Afraid To Ask: TFD’s new expert interview series, is all about the experience and financial logistics of being a PhD student. The Afraid To Ask series is meant to provide a deeper insight into a variety of subjects, and shed light on topics people are sometimes ignorant about (myself included in every topic I cover!).

This week I sat down (via the internet of course) with Julia Reeding, who is here today to share whats she’s learned over the last eight years pursuing her doctorate degree in social sciences and psychology. She dives in deep to provide insight as to what the financing process for this looks like, reflects on what her work experience has been up until this point, and considers what lies ahead for her, financially and professionally, upon graduating. She has picked up invaluable knowledge about what it means to go for your PhD, and has prepared herself to face those challenges head on in an intelligent way.

Julia was kind enough to answer the questions that follow. This interview is extremely insightful, and reading it is a great way to learn more about what it takes to earn your PhD. If this is something you’re considering doing yourself, it’s a beneficial way to get a head start so you know a little bit more about what to expect. Check  it out!

You’re currently a PhD. student enrolled in the Psychology program where you hope to secure a tenure-track professor position – how long did you consider the decision to continue your education into the PhD level? Were there any financial considerations that made you take pause or reconsider doing it?

I really didn’t consider any other options besides graduate school. I started planning for graduate school around my second or third year of my undergraduate degree. To be a professor in the social sciences, a PhD is a job requirement, so there really is no way around this. From a financial perspective, it does delay my earning and income potential. I just flat-out don’t make as much money as many other people my age and it will probably take me some time to catch up. I cannot work full-time, so this obviously limits how much I can earn. Despite this, because I have been a full-time student for a decade now, I have found ways to live comfortably on a lower income living in a high-cost city as a student. One thing I did do was I worked for a year in between my Master’s and my first semester in my PhD program. Doing this allowed me to pay off credit card debt that I had accumulated and establish a healthy financial life (which was super important). I was not earning a lot of money by any means, but it was enough to live comfortably, do all the things I wanted to do, and still save. I was able to start my PhD consumer debt-free, and I’m happy to say I have stayed that way!

You go to school in Ontario, Canada where student loans, grants, and the scholarship process works differently. Can you tell us a little bit about how funding works for PhD students?

University is generally less expensive in Canada compared to many schools in the United States. However, students in Ontario pay the highest tuition fees in the country, which definitely hurts us all. As graduate students in Ontario, our funding comes to us through a few different ways:

University-provided fellowships: these are typically very basic packages that may cover tuition and some living expenses, but they are generally not enough to live on. They typically provide for guaranteed teaching assistant (TA) positions, which are paid, or some kind of similar paid academic work.

External funding awards and scholarships from the government: these are the ones you want. They are very competitive and can be multi-year funding awards. The smallest (but still competitive) award is provided by the provincial government and your university will top up your award to meet a basic standard living amount (which are university-dependent, so it can range between schools). The larger grants tend to be multi-year and can range from $20,000 – $50,000 per year, depending on the agency funding your award, how many years you are applying for, and how competitive the award is. In Canada, our federal government oversees what’s called the Tri-Council, which is three government agencies that fund natural sciences, humanities/social sciences, and health research. Each of these agencies administers Master’s, doctoral, post-doctoral, and operating grants for principal investigators. These awards are very competitive and the demand far exceeds supply, so many students have to apply multiple times and may not ever successfully win.

External scholarships from non-profits/private foundations: depending on your area of research, you may be able to apply for doctoral funding grants from non-profits and private foundations, like cancer, aging, or addictions-related research foundations. So, your ability to access this type of funding depends almost completely on whether or not your dissertation research fits in to their mandates.

After you’ve exhausted your university, provincial, and federal-level funding opportunities, you can find work as a research assistant (which you have to find yourself, usually) or teach a class (this also has to be applied for), or some other academic-related job. Some of my clinical psychology student colleagues work as psychometrists (administering psychological test batteries) or work as student therapists in studies. Though the last two are not options for me since I have no background in psychometry or any clinical training.

Finally, you can take out student loans from the provincial government, which typically max out at around $11,000 a year (give or take). However, your ability to access these kinds of funds can be limited based on how much you have already borrowed from the province. You can also access student lines of credit through banks.

You said that “tuition and funding are always huge headaches for us” — can you tell me why that is? How long does it take a PhD student to find funding? Is it interest-free money, or do you have to pay it back with interest after graduating?

The only thing you are responsible for paying back after you graduate is student loans from the government or any private/bank loans you have taken out. Graduate students do not pay back scholarships, fellowships, or basic funding through their universities. So, if you have not taken out any loans, you don’t have anything to pay back. If you have leftover student debt from your undergraduate degree, then this loan is put on hold until you graduate and you are not responsible for paying it back until six months after you graduate. It begins collecting interest once you have graduated.

Funding is a headache, because it is so competitive to get! The big external funding awards require long, detailed, very carefully written applications and we are required to apply for them every year, because our applications are also used to determine any university-level funding if we are unsuccessful at securing external funding. If you are lucky and secure a multi-year award, you can rest easy during the fall when applications are due. If you only secure one year of funding or have yet to be successful, you must keep applying. The applications really matter a lot and they cannot be done the night before it’s due. Part of the reason funding also matters a lot as a PhD student is that “money follows money” – you aren’t just trying to live and feed yourself, you are also trying to develop a track record of successfully convincing an agency that your research matters and is worth funding. Ideally, you win doctoral funding; then you win post-doctoral funding; then you become a professor or researcher and secure larger grants to work independently. The earlier you can begin this, the better.

Tuition is a headache, because it’s expensive, and we have to pay for it out of our funding. Depending on the source of your funding, you may never actually see the money. It gets deposited into your student account, pays off your tuition amount, and then you get a refund check of the balance left over. Because we are enrolled 12 months a year, we pay for there semesters, not two, every year.

You said that non-student outside work is really discouraged when you’re working toward your PhD. What is the negative impact of not really working and saving money until you get out of school (finally) after almost nine years of higher education schooling?

To be very clear, doctoral level research training is work. I try to explain this as often as I can. Yes, I am a student, but I am training to be a professional researcher in much the same way law students are training to be lawyers and medical students are training to be doctors. Our days are filled with research meetings, supervising junior students and undergraduate research assistants and volunteers, keeping up with the literature, applying to conferences, writing manuscripts, and collecting and analyzing data (to name just a few of the potential tasks involved). Doing all of this is a full-time job, so this is why outside, non-academic work is discouraged. I have to be very conscious of spending my time in meaningful ways: what activities/work will help my professional development and training? Students can technically work outside of school if they need to in whatever job they find, but you cannot put on your academic CV that you bartended or worked retail. It might make you extra money, but if it costs you research productivity or delays you from submitting a manuscript for publication, you will suffer professionally. It often isn’t really worth it. The longer you take in your training, the more time you will spend as a PhD student, and that is not always seen as a good thing. This is why we are encouraged to primarily work in research- or teaching-related jobs, because it is: a) relevant to our career interests, and b) something we can put on our CVs.

If you are planning to work in research-related fields, this is actually not a downside, because it is the reality of graduate school and this type of experience is in fact what you are supposed to be working on. So I am actually learning and developing the skills I need for the job I want in academia. This is why a PhD can be really different from professional master’s degrees and undergraduate degrees, where your learning may be heavily course-based and require a lot of external efforts to find job experience. The very nature of a PhD trains you for a career in research, which is what I want. The larger issue is more financial, rather than professional. The good news is that new tenure-track assistant professors in Ontario (if you can get one) actually start out at quite healthy salaries. I have also seen and heard of other PhD grads who have left academia, but have taken jobs in management and business, higher education (non-teaching/research), and government, and also done well salary-wise. With your PhD, you actually do graduate with very specific and specialized training that is in demand. Things like statistical analysis and data management, program design and evaluation, and research consulting are just some of the myriad of skills PhD students in my field often have when they graduated.

What are some of the life events you’ve had to put on hold because of your higher education aspirations?

I don’t think I’ve put any life events on hold for graduate school. I never really perceived any other options, like finding a full-time job, since my plan was always graduate school. I don’t think graduate school is necessarily prohibitive against major life events like starting a family or home ownership, since I know many grad students with kids and mortgages. All of these things are possible in graduate school with some planning, but they do of course depend on your individual circumstances. Since I am planning on an academic career, I do have to think about timing of kids and major life transitions, because major career transitions in academia tend to happen around the same time as people decide to get married, have children, or buy a home. There isn’t really an objectively “good time” for any of these though, and I think concerns about career trajectories and personal life milestones are felt by women in all fields, not just graduate school and academia.

Is it possible to save money while in grad school? Are there any rules that you live by in order to make it possible to save a little bit of money.

It’s totally possible. However, your ability to save definitely depends on your funding situation and personal priorities. Some students just have access to more money, either because they have received prestigious awards or they have a supervisor with a major operating grant who can pay them a stipend or provide a research assistant position. A personal strategy I have used for saving in graduate school is allocating particular income sources to particular goals. A lot of graduate students work on short-term or brief contracts for work (e.g. 100 hours of research assistance) in addition to any funding from school or external sources. So, when I have multiple streams of income coming in, I allocate certain paycheques to certain bank accounts. This semester, my advisor paid me a stipend for research assistance, so I put the entire stipend into my rent and bills account. I supervise undergraduate exams right before the holidays, so I allocate that income to my holiday shopping bills. These are not really long-term savings strategies, but they help me make sure that I will have the money I need when I need it.

What financial advice would you give someone a few years behind you so that they felt more financially prepared for what’s to come when they arrive at the PhD level?

Get rid of any consumer and student debt you can before you start. You should be prepared to live on a relatively small income, so you will not have a lot of room for debt repayment and only student debt can be put on hold while you are in graduate school. Think about small ways that you can use your limited money responsibly while you are in school: minimize coffee purchases on campus, bring your own lunch at least a few times a week. These things do make a difference when your monthly income is low. Plan and save in advance for conference travel, and apply for every travel grant you possibly can to get reimbursed. Conferences are a necessary evil and you usually have to pay for them up front.

How would you suggest one pays of credit card debt if they are busy with schooling and coursework? Are there ANY side hustles that lend themselves to a student’s hectic schedule?

A random side hustle I did last year was walking a neighbour’s dog everyday, since I have a dog as well and we go on multiple walks a day anyway! If you can find small jobs like that which you are already doing and wouldn’t take away from your academic productivity, then anything is possible. If you happen to have some kind of skill like graphic design or something similar, you could totally take on freelance work whenever you can and let your academic schedule determine when you have some time freed up for it.

If it was me and I had credit card debt to pay off, I would try to find an academic side hustle and direct all income from it towards my debt. I’d try and pick up a short-term research assistant contract or add some extra TA hours to my schedule. This way, you make extra money while also adding to your CV. I know some people have tapped into their pre-PhD research networks and found small side jobs for extra income. You can also consult with your advisor about asking for their help reaching out in their network for any paid opportunities. Even if it’s a small amount of work, you can direct that money just to debt repayment.

Do you feel like the financial investment of higher education is worth it? How do you see these investments in yourself paying off five-10 years down the road.

It is absolutely worth it for me, because a research career is what I want, and a PhD is necessary to do the kinds of things I want to do. In an ideal world, in five years I’ll have finished my PhD and will be in a funded post-doctoral fellowship. In 10 years, I’ll be a professor (school to be determined). I really enjoy my field and the nature of academia, and I am really glad I’ve made the choices I have. My semester has been extremely busy and often stressful, but I am ultimately glad I’m here.

What specific ways can PhD students begin planning for their financial lives while in school to be implemented when they get out of school. How do you plan on taking control of your finances, and how can others plan to do the same?

I try to read and absorb as much financial information I can. There’s still so much I don’t know and can’t even really begin to think about it, because it’s just very far away for me still, like applying for a mortgage or purchasing investments. If you can do those things while as a PhD student, definitely do it – it’s just not possible for me right now. At its most basic level, living within your means and avoiding unnecessary debt is are the cardinal rules to live by for everyone, not just graduate students, and I don’t think the short-term downside of a low income in graduate school is an excuse for unnecessary debt. I think it’s important for PhD students to consider the costs of living and average salaries in the career tracks and locations they want to live in post-graduation, and determine if these are aligned with their personal financial goals.

Image via Unsplash

  • I think your financial experience can vary widely from field to field. I’m in a STEM area, and it’s not uncommon in my department (I’m in the US) to get a stipend of about 20k USD a year without having to apply for funding, scholarships etc or teach. Rather, your adviser includes student support in grants he or she applies for. My current adviser does not have that sort of funding, so I’m TAing, but my salary includes tuition and a large discount in health insurance. 20k isn’t great money, but if you share an apartment it’s enough in my area to get by and save a little.

    I think it would be interesting to do follow up articles about phds with people in different areas, and how it compares to their starting salaries afterwards.

    • Marium

      I agree, I just got my masters in chemistry last year, and was only required to pay for my student fees and books. For my program we received a stipend (~14k/yr) and had our tuition and health insurance covered, in exchange for TAing. I am currently applying to phd programs in chemistry and i have found that the stipends range from 18-30k/yr in addition to tuition and insurance.

    • Sara

      FWIW, I am currently in a U.S. Ph.D program in the social sciences that covers tuition along with a $23k stipend/year five-year funding package, which is very livable where I am. I would recommend only applying to programs that are fully funded (aka tuition, stipend, health insurance), and many are. There’s just no good reason to pay for your Ph.D and accumulate debt, especially when academic job prospects are so dismal.

    • Lauren

      Claire, I think that’s a really helpful idea for a couple of follow-up interviews that explore those topics — keep on eye out for those!

    • Tiffany

      I’m in my 6th year of a STEM PhD program in the US, and we get a guaranteed package for 4 years of full tuition, 100% of health insurance, and a ~$30k/yr stipend. Most students take 5-6 years to complete in my department, and no one has ever (since I’ve been there) gone without funding. You may have to TA or do some work on another project, but you will always be fully-funded. I recently started working full-time (I have left academia and my field completely), so am no longer considered a full-time student; this means my tuition is reduced to 10%, and I lost my health insurance & stipend package (duh, I’m working). In this case, even the 10% is being picked up by my advisor’s grant money, while I wrap up my dissertation.

  • On a formatting note, I feel like this would be a lot easier to read if you bolded or italicized the question bits. Just a thought!

    • Lauren

      Thank you for that suggestion!

  • saltwaterlily

    I completed my PhD in Australia (STEM field), and I had one of the less generous research awards – but it still worked out to about 22k a year (tax free), free tuition, and extra grant money for conferences, research expenses etc. I was allowed to work 12 hours a week too. Recommended doctorate finishing time here is 3 years though, so the funding runs out after 36 months. Luckily I was able to finish in time! I know a lot of people who have had to keep working on their thesis long after their funding dries up, so they’ve had to work full-time whilst completing on the final stages of their PhD. On a side note, the system here seems really different in the US – although it takes them longer to complete, I’ve noticed that US PhD grads are much more well equipped for professional careers.

  • Irisgeist

    Thanks a lot for the insightful interview! I really do agree with how you emphasize that doing a PhD is actually a *real* job.
    In Germany (where I did my PhD in a STEM field), you are either funded by a scholarship (from organisations like DAAD, or other international programs), or by your PI, by means of granting you a working contract. Jobs in universities are payed according to a grading system that takes into account your education + professional experience. Unfortunately, PhD are paid 50%-65% of what otherwise you would be paid given your education background (B.Sc. + masters, for example), with the argument that “you will be paid better after completing the PhD”. I really hate this kind of thought, because despite of being paid 50%-65%, you are not working 50%-65% of a normal working day, but in fact quite often people in my institute would work 12 hours per day, weekends included. As someone who went for the PhD right after finishing a B.Sc., I strongly recommend anyone interested to consider working at least for a year in order to have a safety fund once you start the PhD. And if your PI to be will be funding your position, ask clearly for how many years (some colleagues were in the situation in which the PI had funds for them for only a couple of years, without disclosing the full information to them when they started).