At least in my university, MS students were usually paying full tuition, with the understanding that they'll take classes and leave for (presumably) high-paying job.
On the other hand, PhD students were usually paying no tuition at all -- instead, after getting their masters-equivalent, they were expected to do the research for a few years and therefore "pay back" by advancing the science.
(of course the fun fact was that one could drop out half-way from PhD program and get a MS degree.. but this did not happen very often)
Indeed, I've been considering getting a PhD. The situation in Sweden is quite different to yours however. To begin with, all university education is free, and we further get a student grant of ca. $300 USD / month and access to an almost free student loan for up to 6 years. PhD students all get a salary of ca. $3k USD / month. Also, here you don't get a PhD "instead" of a master's -- a master's is rather a prerequisite to getting a PhD, in practice if not formally. Generally, the path to a PhD in Sweden is: 3 years for bachelor's degree -> 2 years for master's -> 4 years for PhD.
