If you’ve ever heard someone say they’re getting paid to go to grad school, they weren’t lying. Every year, thousands of graduate students attend programs where their tuition is fully covered and they receive a monthly stipend to cover living expenses.

The two most common ways this happens 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. It typically includes a tuition waiver and a stipend (a payment meant to cover living costs). The defining feature of a fellowship is that it comes with no work obligation. You’re being funded to focus on your studies and research. Fellowships are awarded based on academic achievement, research potential, or fit with a program’s goals.

An assistantship, by contrast, is essentially a part-time job at the university. Graduate assistants work 10–20 hours per week and receive tuition coverage plus a stipend in return.

Assistantships come in three main types:

• Teaching assistantships (TAs), where you help teach undergraduate courses
• Research assistantships (RAs), where you work on a faculty member’s research project
• Administrative or graduate assistantships (GAs), where you support a department or office with operational tasks

In both cases, you’re not taking on student loan debt for the portion covered by the award.

How Do You Get Grad School Funding Work?

For most programs, you’re automatically considered for funding when you apply for admission. This is especially true at the PhD level, where many departments build assistantships or fellowships into their admissions offers. You typically don’t need to fill out a separate application—your admission application, personal statement, writing samples, and letters of recommendation serve double duty.

That said, some fellowships do require a separate application. Prestigious awards like the 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.

For assistantships specifically, departments sometimes post open positions on their websites or internal job boards. Reaching out to faculty whose research interests align with yours can also open doors to RA positions.

Master’s vs. PhD: Who Actually Gets Funded?

This is where expectations need to be set clearly. PhD programs are significantly more likely to offer full funding. At many research universities, admitted PhD students receive a multi-year funding package that includes tuition, a stipend, and health insurance. It’s standard practice in fields like the sciences, engineering, economics, and the humanities. If a PhD program admits you but doesn’t offer funding, that’s often a signal to think carefully about whether it’s the right fit.

Master’s programs are a different story. Full funding at the master’s level is less common, especially in professional programs like MBA or counseling degrees. However, funded master’s positions do exist – particularly in STEM fields, at large state universities, and in programs that need TAs for undergraduate courses.

Some universities also offer partial assistantships at the master’s level, covering tuition but offering a smaller stipend.

How Much Do You Get Paid?

Stipend amounts vary widely by institution, field, and degree level. PhD stipends for a half-time (20-hour) appointment generally range from about $20,000 to $45,000 per year. Master’s-level stipends are typically lower. To give a few examples from the 2025–2026 academic year: UW Madison set its minimum annualized stipend at $35,636 for half-time appointments, while Georgia Tech’s doctoral minimum was about $27,500 annually and its master’s minimum was roughly $14,200.

These are not salaries that will make you rich, but combined with free tuition (often worth $30,000–$60,000 per year at many institutions), the total value of a funded position is substantial. Many packages also include health insurance, which adds thousands more in value.

How Do Taxes Work For Stipends?

This catches many new grad students off guard. Both assistantship and fellowship income are considered taxable income by the IRS. But the way taxes are handled differs.

Assistantship stipends are treated like wages. Taxes are withheld from each payment, and you’ll receive a W-2 at tax time. This works the same as any other job.

Fellowship stipends are different. Universities generally do not withhold taxes from fellowship payments, and you won’t receive a W-2. Instead, you’re responsible for reporting this income yourself and may need to make quarterly estimated tax payments to avoid penalties. Many first-year graduate students miss this and face an unexpected tax bill in April.

Tuition waivers can 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 complicated, and some portion of a tuition waiver may be taxable depending on your specific situation. Check with your university’s graduate school office and consider consulting a tax professional during your first year.

What You Should Do Next

If you’re planning on graduate school and are looking for fellowships and assistantships, here’s what to do:

1. Ask every program you’re considering: “What funding is available, and how do I apply?” Don’t assume the information on the website is complete.
2. Look at external fellowships early. The NSF GRFP, Ford Foundation Fellowship, and others have deadlines that often fall before or alongside grad school application deadlines.
3. 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 go a long way.
4. Compare the full funding package, not just the stipend. Tuition coverage, health insurance, and fee waivers can vary dramatically between offers.
5. 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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