An Alliant Visa Platinum credit card could help you take control of your finances.
Consolidate debt, pay for home renovations or cover an emergency expense with an Alliant Personal Loan.
A HELOC could be helpful when large expenses come your way, whether they’re planned or unexpected.
Work toward your savings goals — college, a down payment or the holidays — with a goal-specific Supplemental Savings account.
Alliant helps your money make more money with high deposit rates and low loan rates.
Return to The Money Mentor Blog
By Thomas Muellner
Trying to work out the math in my head, I stood patient and cold at the subway station closest to campus. It was mid-December and class had just let out.
“…two nights per week for 16 weeks… carry the one, subtract for holidays and absences…”
After a few moments, I landed on a number and pulled out my smartphone to check my math: 384. Over the past three years, I’d taken roughly 384 train rides to and from night school while earning a master’s degree after work.
But this night was different. Like nearly one million graduate students each year, I finished my final class and was on my way to graduation. As the train doors closed behind me, there was only one question left to answer: Was it worth it?
It’s a familiar question that’s often tricky to answer. With rising tuition costs and an evolving workforce, the reward may or may not justify your investment.
If you’re on the fence about starting a new graduate program, be sure to take a hard look at these financial pros and cons of grad school before you make your decision.
Before digging into whether or not attending graduate school is a smart money move, let’s take a step back. Graduate school is a broad term that refers to a wide range of advanced degree programs. Though it’s commonly used to reference master’s degree programs, it also encompasses doctoral programs and professional degree programs, including law school and medical school. Each type of graduate program has its own unique costs and requirements, so it’s best to keep a relatively narrow scope when researching your options.
Any way you slice it, grad school is not cheap. A two-year master's program at most public universities now runs upwards of $20,000 per year. Programs at competitive private universities and out-of-state tuition rates can be more than double that.
If you’re a full-time student, you’ll also need to consider how you’ll pay for everyday living expenses, school supplies and miscellaneous needs without a steady income. This can require drawing from savings or taking additional loans to cover costs. Even if you’ve secured financial aid or have tuition offset by an assistantship, you could still be struggling to make ends meet while in school. By the time you get your hands on a diploma, it’s realistic to plan for $50,000 to $100,000 (or more) in total expenses.
Yes and no. At first glance, the outlook is rosy – on average, individuals with graduate degrees tend to have higher salaries and lower unemployment rates than those without. Moreover, research from Georgetown University suggests that advanced degrees can be particularly valuable in industries such as computer science, finance and engineering.
However, real-life outcomes vary widely by field, and obtaining an advanced degree doesn’t always guarantee an immediate financial gain. In all likelihood, you’ll end up paying for your education before seeing the monetary benefits of it.
On the other hand, having additional schooling is seldom going to count against you in a job interview. And while it may take time for you to see a lift in your paycheck, your long-term earning potential will be greater as the result of your diploma.
Prior to jumping into a postsecondary program, think about whether or not the degree you’re seeking is a formal requirement for the job you’re after. Outside of medicine, law and certain academic positions, there’s a good chance having a postsecondary degree is simply favored rather than mandatory.
If you’re already working in the field you’re looking to advance in, a good first step is to tap your professional network to get some perspective from the front lines. A candid cup of coffee with a mentor or senior staff member may be the difference between making a necessary investment or taking a costly detour on your career path.
All things being equal, an advanced degree has the potential to put you a step ahead of your peers, but relevant work experience and professional skills can be just as important to potential employers. It comes down to knowing your industry and having a feel for what’s necessary for success.
On the bright side, according to the Bureau of Labor Statistics, jobs that require a master’s degree or a doctoral degree are projected to see double-digit growth for the remainder of this decade. So, if you’re dead set on going back to school, it’d be wise to focus on an up-and-coming industry.
By choosing to attend grad school, you’re giving up short-term income and (probably) taking on long-term student loan debt. It’s an investment, and the payout is not always worth the risk.
Before taking on additional student loan debt, work to understand what your income will be, realistically, in your first year of work after getting a new degree. As a basic rule of thumb, your starting salary should be more than the total amount of debt you plan to accrue while attending school. If that ratio is out of whack, or if your loan payments are expected to be more than 10 percent of your monthly income, it probably doesn’t make economic sense for you to go back to school.
If there’s not a clear-cut answer, don’t be afraid to pause. It’s okay to go back to the drawing board and ask yourself some important questions. Will the cost-benefit ratio change in a year or two? Can I save money to reduce the student loans I’ll need? Could attending a public school rather than a private institution lower costs without sacrificing my education?
By being honest about potential outcomes and diligent with your research, you can be sure your decision to attend grad school passes the smart money test with flying colors.