Compounding the sticker shock is the dismaying reality that students can't count on the kinds of scholarships that helped them through their undergraduate years. Fewer than 4 percent of graduate students get a federal or state grant. Fewer than 20 percent get any kind of scholarship from their school. Fully 60 percent of grad students get no free money of any kind and have to borrow or otherwise raise the entire cost of their advanced degree themselves.

Luckily, a little financial help appears to be coming to students' rescue. The federal government is offering new and potentially lower-cost educational loans. A growing number of communities and government agencies are offering to repay loans for workers who agree to spend several years in lower-paying public-service jobs such as teaching. And more employers are subsidizing employees' tuition.

Most important, employers continue to reward better-educated workers with bigger paychecks, making the investment of time and money a good bet. While the average worker with a bachelor's degree makes a comfortable $42,000 a year, master's degree holders make about 25 percent more. And those with professional degrees earn, on average, more than twice the income of those who stopped at a B.A.

That's a key motivator for thousands of grad students like Doug Spencer, who is working on a Ph.D. in jurisprudence and social policy at the University of California-Berkeley. Spencer owes more than $100,000 in educational debt and says it sometimes feels like "a foot on top of my head pushing me deeper and deeper into the mud." But Spencer loves school, and as a law professor (his goal) he could start at $150,000 a year. "Maybe I'm just blindly optimistic," he says, but he's convinced that the education will pay off in a financially secure life for him, his wife, and their new child.

Of course, not all grad student optimism is blind. Financial aid for graduate students is much more decentralized, and thus more complicated, than aid for undergraduates, says Karen Klomparens, the dean of Michigan State University's Graduate School. But three types of grad students can be reasonably optimistic about getting some free money to ease school bills, she says:

• Science, math, or technology specialists can shoot for funding from foundations or government agencies, such as the National Institutes of Health.
• Very low-income students can qualify for need-based aid.
• Top students who apply to several schools can hope schools will compete for them by bidding up financial aid packages.

Extra perks. Students who aren't showered with grants can turn to one of the fastest-growing sources of free money for school: employers. Today, half of all workers are eligible for tuition benefits, up from 38 percent in 2000. And many employers focus on graduate training. Several big ones, for example, have signed on to California's new EnCorps program, which funds up to $15,000 of the educational costs for retiring workers who want to launch second careers as teachers. Even employers without formal programs can write off as a business expense any worker's tuition for a class that is job-related but doesn't qualify the worker for another job, says Bob Scharin, senior tax analyst for Thomson Tax & Accounting. It takes little more than a one-page description of an education plan for a business to take advantage of Section 127 of the IRS code and pay as much as $5,250 a year in tax-free tuition benefits for workers taking just about any course, Scharin says.

Many employers say education benefits pay corporate dividends by attracting and retaining top workers. UTC, the conglomerate that owns Sikorsky helicopters and Pratt & Whitney, has found that the workers who take advantage of its generous tuition program are retained at a 4 percent higher rate than those who don't. They also get about 4 percent more promotions than those who don't.