Graduate school can be a daunting prospect for many students, especially when you consider the potentially high cost of a master's degree or other advanced academic credential, such as those offered in doctoral programs.

After spending so much time and money on your undergraduate studies, the idea of becoming a graduate student and taking on even more debt can be overwhelming. However, understanding the cost of a master's degree doesn't need to be stressful or complicated. In many cases, you may even end up with a lower-than-average cost.

1) Graduate Tuition: This is the component of your total cost that goes directly to the central university – not to the college or program. It is often referred to as a “pass through” amount because it passes directly through the college or program account and into a university-level account. This is same amount for every degree program across the university. It is usually set under very strict governance guidelines and is sometimes even regulated by state law.

2) Program Fees: Not all grad school programs charge separate fees, but in professional fields such as business administration, law, healthcare, social work, or engineering, the cost of a master’s degree often involves a separate program fee based on a market rate. These fees are derived from a complex set of calculations that consider factors including the brand equity of the program, the likely professional or salary outcome of the program, the general competitiveness of admission to the program, and the cost to the college to offer the program.

The program fee can be much higher than the university’s tuition, sometimes making it difficult for a prospective student to determine the overall cost of graduate school. At most universities, the program fee is the portion of your overall cost that stays within the college to finance its faculty and staff, state-of-the-art facilities, specialized software and equipment, and program-specific services such as career and student support.

3) Ancillary Charges: Graduate tuition and program fees make up the bulk of the total cost of a graduate program, but there may also be additional fees for expenses related to technology usage, off-site travel, or course materials. These fees are usually smaller and are specific to certain courses or programs.

In-State vs. Out-of-State: At undergraduate public colleges and universities, a student’s state of residence can make a big difference in the overall cost of attendance, as out-of-state students are often charged a higher rate than those with in-state residency. That model is exceptionally uncommon at the graduate level, where state residency is rarely considered in the determination of tuition. The vast majority of graduate programs are recruiting for highly qualified students from all over the country, so a tuition differential would not only be difficult to justify but may also deter many graduate degree applicants.

U.S. Domestic Student vs. International Student: At both the graduate and the undergraduate level, an international student is typically charged a significant tuition differential. This is generally justified by the additional costs to the university for supporting international students with specialized services and offices that focus on academic success, arrival preparation, visa support, and social and club events — all of which are designed to help international students have a smooth and inclusive experience while on campus. This differential is almost exclusively charged at the tuition level, meaning the university receives that portion of the overall cost, not the college or program in which the student enrolls.

Part-time and Online Cost Models: The number of part-time and online programs has dramatically increased over the last several years, and many of these programs have developed special models that make bearing the cost burden easier for students. For example, online models often charge a flat rate per quarter, per semester, or for the degree overall. They may also have payment plans that allow students to make several payments throughout the year instead of one large payment at the beginning of a term.

University-level Funding: Some universities have specific funds allocated for graduate students that are based on either merit or demonstrated need. These scholarships are traditionally limited to small amounts and are sometimes derived from a small percentage of the overall tuition revenue a university takes in during a year. It is important to note that university-level scholarship funding is exceedingly rare and is usually limited to relatively small amounts. This funding sometimes comes from a central graduate unit of the university; it is most often seen as an award to allow continuing students to complete a program of study.

College-level Funding: A college-level scholarship most often functions as a discount on the program tuition. It is often awarded as part of merit-based aid determined by an admission committee during the application review process. In general, the more competitive a candidate’s applicant is, the more likely it is that they will receive a college-level scholarship offer. Generally speaking, most scholarships in this category will be limited to the total program fee, and such scholarships at are quite rare.

Donor-funded Scholarships: Most colleges and some programs have specific scholarships funded by donors who have a connection to the college or program. These scholarships are usually named gifts (e.g, the Deborah E. Trautman Future Nurse Leader Scholarship) and typically have highly specific requirements.

External Funding Sources: There are many organizations — including non-profits, corporations, NGOs, and governmental agencies — that offer scholarships to graduate students based on specific criteria. The best way to find these scholarships and other forms of financial aid is to use one of the online scholarship funding aggregators that list scholarships for those pursuing a graduate degree, their requirements, and the process for applying.

Keep in mind, too, that you may need to consider student employment to help finance living expenses, such as student health insurance. Be sure to request information from the degree program you are considering to learn whether students are allowed to work while enrolled in grad school. If not, you may need to consider taking on some student loan debt.

By one account, the average cost of a master’s degree is more than $65,000. However, the amount you spend to earn a graduate degree will not necessarily be the same as the average tuition and fees cited in reports about paying for higher education — particularly if you are able to receive financial aid.

Understanding the cost of a master’s degree or other graduate school degree program is critical when deciding where to apply. By breaking down the total cost into tuition and program fees, you can gain a better understanding of what you'll be paying for and understand how the program fits into your needs.

It's important to consider all aspects before making a decision, but don't let the details about the average cost of a graduate program deter you from pursuing your dreams. With careful planning and research, you can find ways to finance your graduate education and make it a worthwhile investment in your future.