We hear all the time that money spent on education is never wasted because it’s an investment in our future. In many cases, this is 100% true. Recent data shows that college graduates earn 84% more money over the course of their lifetimes than those with only a high school diploma. This certainly makes a college degree a worthwhile expenditure.
However, concern about rising student loan debt carried by graduates is giving some people pause about pursuing higher education. In particular, many people – especially those already in the red from their undergraduate degrees – are questioning whether or not obtaining a graduate degree is a smart financial move. The answer to this question is highly personal and depends on your profession, if you’re considering graduate school, ask yourself these three questions before making the final decision:
Will a Graduate Degree Help Me Earn More Money?
This question probably seems obvious to some, but many people fail to consider whether or not pursuing additional education will pay off in terms of increased earnings later on. It’s worthwhile to do a lot of research about your field and whether or not graduate education will add value to your future paychecks before you commit to entering a program.
In addition to searching the web, be sure to talk to professionals in your line work (or the line of work you’re trying to break into) to assess whether or not getting a graduate degree is a good move. In particular, try to seek out others who have experience in hiring – does a graduate degree make an applicant more attractive? Does it help her fetch higher paycheck? These are the types of questions you should be asking in order to evaluate the return on investment you’ll get from a graduate degree.
What’s the Opportunity Cost of Going Back to School?
Economists define opportunity cost as the value of something that you’re giving up when you make a particular choice. For instance, when you choose to spend an hour watching T.V., the opportunity cost of that choice is an hour spent exercising or reading a book. While this a somewhat trivial example, the value of what you’re giving up if you choose to pursue additional education is anything but. If you’re going to need to stop working in order to go to school, income you’ll lose during that time needs to be factored into your decision. Is the boost in salary you’ll get as a result of getting the degree enough to make up for months or years of lost earnings?
[Free Resource: Check your free credit report and score]
In addition to the money, consider other “costs” associated with going back to school, even if you’re only going back part time. Are you willing to sacrifice time with friends and family in order to obtain a master’s degree or PhD? Perhaps the payoff will be worth it, but be sure you think carefully about this before you begin your studies.
Am I Considering a Graduate Degree in Order to Avoid Something Else?
Sometimes when people find themselves at a crossroads in their lives, they decide to go to graduate school in order to avoid making other difficult decisions or take a break from a career they don’t find fulfilling. While this doesn’t necessarily make obtaining the degree a bad decision, it’s probably worth digging deep to figure out what’s really driving your decision to pursue additional education. After all, looking for a way out of a bad relationship or trying to put off entering the workforce aren’t good reasons to spend thousands of dollars on a degree you may not need.
In many cases, going to graduate school is a great investment, but be sure you think very carefully before making this big financial commitment!