Student at grad school

As you finish your undergraduate degree, you may be thinking of obtaining a graduate degree.  The first major consideration is whether the graduate degree is worth the investment.  The second major consideration in your decision is how to finance your graduate degree.

The value of a graduate degree varies by the degree you are pursuing.  A study by the Georgetown University Center on Education and Workforce documents this value.

Here are some considerations in deciding on the cost/benefit of a graduate degree:

1. Is a graduate degree required for the career you want to pursue (e.g., medicine, law)?

2. Will the graduate degree make you more employable in your desired field?

3. What is the financial gain short term and long term?

• See the study on the Value of a College Degree by Major. Remember you may be foregoing 1-2 years of salary to get your graduate degree.  The gain in value may take a while to pay back the lost wages you would have earned.

4. Will you be incurring additional student loan debt? How long will it take to pay off this debt?

5. Will a graduate degree give you more upward advancement opportunities than you would have with just an undergraduate degree?

6. Will you be accepted by a good graduate program?

7. What’s the placement history of the graduate program you are considering (offers, salary)?

8. Would a graduate degree be more valuable to you if you worked for a while before pursuing the graduate degree?

• For example, getting an MBA from a top school typically requires 4-5 years of work experience.

9. Think about the tradeoffs of attending a part time or full time graduate program.

• Full time programs allow you to build better relationships with your classmates and finish your degree faster, but can result in more debt.

• Part-time programs allow you to keep earning a salary while you’re in school, but can be very time consuming, and can make it more difficult to build strong relationships with your classmates.

 How can you finance the degree without adding to your student debt?

Let’s say that you decided to pursue a graduate degree.  Here are some strategies:

1. Get a job with an employer which has a reimbursement plan for graduate degrees. Many employers have this as a benefit.

2. Investigate the opportunity of working with a faculty member who has a research project with funded assistanceships. Many of these have tuition reimbursement plans.

3. Investigate if you can get a job on campus to offset the need for student loans. Typical positions include:  resident assistants, teaching assistants, tutors, etc.

4. See about going to graduate school part-time while having a job.

Think About the Different Graduate Program Options and Weigh the Tradeoffs

I decided to take on debt to get my MBA from the full-time program at UC Berkeley Haas School of Business. I feel like it opened up new career opportunities and helped me build long-lasting friendships with my classmates. For me, getting a graduate degree was worth it. However, it was a short-term financial setback giving up a salary for two years and taking on student debt. Luckily, I was able to pay off my loans within a few years after graduating and have been given access to more career opportunities due to my Haas connections.

Make sure you evaluate this debt vs. salary tradeoff before deciding to attend grad school. The general rule of thumb for financing a graduate degree is this:

“Don’t go into more debt unless the graduate degree has a virtual certainty of putting you on a significantly higher salary path.”

This article was written in partnership with University Survival.

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