Is Graduate School Really Worth It?
Living in tough economic times, many people look towards education as a means to improve their financial situation. Their hope, understandably so, is that a better degree will lead to a better paycheck and, for the most part, they’re right.
The average monthly earnings of young adults with master’s degrees rose 23% between 1984 and 2009. Also, according to a 2013 report by the Bureau of Labor Statistics, the unemployment rate for master’s degree-holders is about 3.6%, while undergraduate degrees are 4.9%. That said, there are some factors that can significantly decrease the value of your graduate degree.
The current predicament undergraduate degree holders are facing is trying to determine whether or not a Master’s degree in their chosen field of study will provide them with a worthwhile return. According to an analysis performed by New America, it was discovered that the bulk of America’s student debt is primarily owed by graduate and professional studies students. On average, a graduate student will owe approximately $60,000 by the time they have finished their studies, roughly twice as much as undergraduate students. Not to mention, the time out of work while obtaining the degree could result in delaying their entry into the job market and entering it with less experience.
With conflicting opinions like these, it can make deciding on whether or not to go to grad school a massive headache. How can you really be sure the choice you’re making is right for you? Well, seeing how GRE season is almost upon us, I figured I’d share my wisdom on how you can determine whether or not continuing your education will give you a solid ROI (Return on Investment).
In order to find out if graduate school is the right choice for you, ask yourself the following questions:
1) Is My Master’s Degree Mandatory?
For some of us, the choice of going to graduate school has already been decided. Many positions, such as therapists (social workers, marriage and family), medical professionals (optometrists, physical therapists), and some educators (school administrator, school/career counselor), consistently list a master’s degree as a pre-requisite for entry-level positions. If this is the case, you already have your answer.
2) What does the job market show?
If Grad school isn’t a necessity for you, start researching the job market in your chosen field. It’s the first step in deciding whether or not graduate school will be the right decision for you. After all, how much you’ll make with your shiny new degree won’t matter much if you can’t find a job. Take your time learning all you can about openings in your industry, its upward mobility (the rate at which you might be promoted), if the industry is growing, and any predictions for the future of that particular industry.
3) Does the Debt Outweigh How Much You Make?
Determine the post-degree salary you‘ll be making and low-ball this figure (the more conservative the better). A salary estimation website, such as Glassdoor or Payscale, will give you insight to what people in your field and various positions are making. Compare this number to the estimated debt you’ll be taking on after graduation (Don‘t forget about interest, the time it will take to repay, and any undergraduate debt as well!). If your debt is more than your projected income, it‘s mostly likely not going to be in your best interest to attend grad school.
4) How Will Your Time At School Affect Your Future Savings?
Take your estimated salaries with and without a master‘s degree. Calculate how much money you’ll have saved by age 65 in a Roth IRA, accounting for the time you might lose attending grad school. You can do the same with saving for a home or new car as well. You might be shocked by how much more, or less, you‘ll have earned over time.
5) Should You Wait?
While immediately attending grad school after college might expedite the process, waiting a year or two might be even more beneficial. Taking time before attending graduate school can give you time to save money. In fact, you may even wind up working for a company that will be willing to foot some of (or even all of!) the bill for your education. Research some of your job opportunities nearby and see if they offer some sort of reimbursement for their employees when continuing their studies.
Despite its intimidating cost, there is really no rule of thumb when it comes to attending graduate school. The decision varies from person to person, from career to career and, ideally, should be carefully contemplated. As with all matters regarding your money, doing your homework is pivotal. (You’ve done a lot of homework to get to this point, so don’t slack on this assignment!) Sit down and take the time to make sure that the money you’re investing will really pay off for you and provide you with the most financially secure future possible.
What was your experience with grad school? Was it worth it? Was it a waste? Let us know in the comments! And feel free to share our blog on your favorite social network.