Lisa is trying to decide what to do with her life. She’s in her mid-thirties, has two young children, and for the past few years has spent most of her time parenting. Now that the kids are older, she’d like to go back to school. But she’s worried it might not be a smart financial decision:

Common wisdom says that education is always a good investment. Is that always true? If I already have a college degree, is it truly a good idea to invest in another degree, taking into account lost income, the cost of tuition, childcare expenses, and any interest accrued in loans? Is there a base salary that you should expect to earn before additional education is a good investment?

Jethro wrote with a similar dilemma:

I’m a middle school teacher in Utah, and I don’t make much: $27,859/year. I am getting my masters in my Educational Administration. If I stay in Utah, the lowest salary I will get if I am an Assistant Principal is about $45,000. If I move to someplace else — I am thinking Spokane, Washington — I could make $70,000, at least. My wife and I have about $34,000 in student loan/car debt between us. Here’s the rub: I don’t make enough to pay for schooling outright.

My question is: Should I go into more debt to ensure that I can get a better paying job? Or put off schooling to pay off debt by working two or three other jobs? If I put off schooling, my income will rise to about $29,000 from teaching in three years, which is probably how long it would take to pay off all that debt. Then I could start school again.

Lisa and Jethro both face the sort of tough financial decision for which there’s no clear answer. I believe that additional education is usually a smart move, but clearly that can’t always be the case. At some point, education becomes an expense not worth making. But where is that point?

When is debt acceptable? Should it be avoided at all costs? Or is debt for education worthwhile? How much debt for education is too much? Is there really any way to determine the “financially optimal” path? Are some types of education generally a better investment than others (e.g., trade schools)? More to the point, what are your personal experiences with educational debt? Do you wish you had never taken on the additional burden? Do you wish you’d done so earlier?

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