- Fellowships are merit-based awards that require no work, while assistantships require 10–20 hours of teaching, research, or administrative work per week in exchange for tuition coverage and a stipend.
- PhD programs are more likely to offer full funding packages than master’s programs, although funded master’s positions do exist, especially in STEM and large research universities.
- Fellowship and bursary income are both taxable, but the way taxes are withheld differs – taxes are automatically withheld from bursary pay, while fellowship recipients are responsible for paying the taxes themselves.
If you’ve ever heard someone say they were getting paid to go to graduate school, they weren’t lying. Every year, thousands of graduate students participate in programs where their tuition is fully covered and they receive a monthly stipend to cover living expenses.
The two most common ways for this to happen are through fellowships and assistantships and understanding how they work is one of the smartest things you can do before applying to graduate school.
What are fellowships and assistantships?
A fellowship is a merit-based financial award given to a graduate student. This usually includes tuition waivers and stipends (payments to cover living costs). The defining characteristic of the fellowship is that it comes with no work obligations. You are being funded to focus on your studies and research. Fellowships are awarded on the basis of academic achievement, research potential or alignment with the goals of a program.
In contrast, assistantship is essentially a part-time job at the university. Graduate assistants work 10-20 hours per week and receive tuition coverage and a stipend in return.
Aid comes in three main types:
- Teaching Assistantships (TAs), where you help teach graduate courses
- Research Assistantship (RA), where you work on a faculty member’s research project
- Administrative or graduate assistance (GA), where you support a department or office in operational tasks
In both cases, you are not taking out student loans for the portion covered by the award.
How do you get grad school funding work?
For most programs, your name is automatically considered for funding when you apply for admission. This is especially true at the PhD level, where many departments include assistantships or fellowships in their admission offers. You usually don’t need to fill out a separate application – your admissions application, personal statement, writing samples, and letters of recommendation work double duty.
As noted, some fellowships require a separate application. prestigious awards such as NSF Graduate Research Fellowship Or university-wide fellowships often have their own deadlines and requirements. If you’re applying to graduate school, ask each program directly: “How do I apply for funding?” and “What percentage of students in your program are funded?” Those two questions will tell you a lot.
In need of specific help, departments sometimes post vacant positions on their websites or internal job boards. Reaching out to faculty whose research interests match yours can also open doors to RA positions.
Master’s vs PhD: which one is actually funded?
This is where expectations need to be clearly set. PhD programs are much more likely to offer full funding. At many research universities, admitted PhD students receive a multi-year funding package that includes tuition, stipend, and health insurance. This is standard practice in fields such as science, engineering, economics, and humanities. If a PhD program admits you but does not offer funding, it is often a sign to think carefully about whether it is the right fit.
Master’s programs are a different story. Full funding at the master’s level is less common, especially in professional programs such as MBA or counseling degrees. However, funded master’s positions do exist – particularly in STEM fields, at large state universities, and in programs that require TAs for graduate courses.
Some universities also offer partial aid at the master’s level, which covers tuition but provides a small stipend.
How much salary do you get?
Stipend amounts vary widely by institution, field, and degree level. PhD stipends for a half-time (20 hours) appointment typically range from around $20,000 to $45,000 per year. Master’s level stipends are generally lower. To give a few examples from the 2025-2026 academic year: UW Madison set its minimum annual stipend for half-time appointments at $35,636, while Georgia Tech’s doctoral minimum was about $27,500 annually and its master’s minimum was about $14,200.
These are not salaries that will make you rich, but combined with free tuition (often $30,000-$60,000 per year at many institutions), the total value of a funded position is substantial. Many packages also include health insurance, adding thousands to the price.
How do taxes work for stipends?
This makes many new graduate students cautious. Both bursary and fellowship income are considered taxable income by the IRS. But the way taxes are handled varies.
Aid stipend is treated like salary. Tax is withheld on each payment, and you will receive a W-2 at tax time. It works just like any other task.
Fellowship stipends are separate. Universities generally do not withhold taxes from fellowship payments, and you will not receive a W-2. Instead, you are responsible for reporting this income yourself and may be required to make quarterly estimated tax payments to avoid penalties. Many first-year graduate students miss this and are faced with an unexpected tax bill in April.
Tuition waivers may also have tax implications. Under IRS rules, tuition benefits for graduate students engaged in teaching or research activities are generally excluded from taxable income under Section 117(d) of the Internal Revenue Code.
However, the rules can be complex, and some portion of the tuition discount may be taxable depending on your specific situation. Contact your university’s graduate school office and consider consulting with a tax professional during your first year.
What should you do next
If you’re planning on graduate school and looking for fellowships and support, here’s what to know:
- Ask any program you’re considering: “What funding is available, and how do I apply?” Do not assume that the information on the website is complete.
- Look for external fellowship early. NSF GRFP, Ford Foundation FellowshipAnd others’ deadlines often coincide with or coincide with graduate school application deadlines.
- Contact faculty directly. If a professor has grant funding, they may be able to offer you an RA position. A thoughtful email about their research can help a lot.
- Compare the entire funding package, not just the stipend. Tuition coverage, health insurance and fee waivers can vary dramatically between offers.
- Plan for taxes from day one. Set aside money for taxes if you’re on a fellowship, and understand what your W-2 or 1098-T will look like before filing season arrives.
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