Is grad school worth the money?
Before you head to grad school, it’s vital to consider the debt you’ll incur — and whether you’ll even get a better job out of it. Is grad school always worth the money?
Sunk costs
People leave graduate school with a typical debt load of around $60,000 (this includes outstanding undergraduate debt) — and one in ten borrowers is saddled with over $150,000 in loans. Plus, tuition costs are rising faster than inflation – and almost everyone requires financial aid. So have a plan in place for saving and/or borrowing to back up your academic and career aspirations.
Not all degrees are created equal
If you want to be a doctor, medical school is a must. (Though you can save an average of $20,000 if you choose a public med school!) Yet not all other graduate degrees are required for advancement in the field, and in some fields a stable income is far from guaranteed. For example, if you take out $41,000 in loans (that’s two years at the maximum Stafford loan amount allowed per year) to help pay for a two-year journalism school program at an average $31,000 a year, it will take you 10 years of monthly payments of a whopping $472 to pay off your loans at the standard 6.8 percent. But the average journalist makes only $34,360 a year. Was school worth it?
Ask questions and be prepared
Research salary ranges in your area (try payscale.com), and compare to your debt load, including what your monthly payments will be. (You can find a helpful loan calculator at finaid.org.) Can you afford to go without a salary or with a diminished salary while you attend school? Talk to people in the field you’re considering to see what they advise. Do they consider their degree a good investment? When you’re ready to apply, apply for loans if you need them. Educate yourself about Stafford Loans – that’s where you’ll start, and most grad students can borrow up to $20,500 a year at a low 6.8% interest – and GradPLUS loans, and also about Income Based Repayment, a relatively new program that lets you make payments based on your income rather than your debt load. Go to finaid.org and studentaid.ed.gov for more information, and to fafsa.ed.gov for the forms you’ll need to apply for federal loans.
Big picture: Education pays
Even in a down economy, the better-educated you are, the more you earn and the less likely you are to be unemployed. There’s a direct correlation. According to the Bureau of Labor Statistics, people with doctorate degrees have a miniscule 1.6% unemployment rate, and earn a whopping $1,664 a week. College graduates have 2.7% unemployment and earn $1,156 a week. And high-school grads have 5.2% unemployment and a weekly income of $692. The point is not to give up on a dream of an advanced degree – it’s to carefully consider costs before you go.
What do YOU think? For those considering grad school, are you questioning the cost? For those who went to grad school, do you regret your debt?
This post originally appeared on The Takeaway.
