Ask the Readers: Is Education Always a Good Investment?
Published on - November 30th, 2007 (Modified on - December 22nd, 2009) (by J.D. Roth) 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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This article is about Career, Choices, Education
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huge believer in education but not all education is created equal. Some people are more focused on money while others want to do a specific job no matter what the pay is because they enjoy the work…school teachers, social workers,
For the mid-30′s lady it depends on her local region’s job market, where she wants to live, and what she wants to do. That will be the biggest factor in earnings potential at any level of education. I would tell her to explore her community and see if there is something that only requires a 2 year degree or certifications from a technical school to minimize cost and get in the work force soon if thats a priority for her. Back home a 1-2 year technical school program lands jobs that are for the most part equal or similar in pay to what a non-engineering bachelors degree gets you. It is laughable for me to see positions requiring a 4-year degree and several years of experience that pay less than my friend started out after a 16 month HVAC program. He has all the work he can think of doing and the company he works for pays for travel time in company vehicles so most of the summer he worked 3-4 days a week and has access to tons of overtime when he needs it. The majority of my friends went to technical or trade schools with only the minority having 4 year degrees from colleges. They are all doing well…not rich but firmly middle class and happy that they spent less than $10k for school rather than $50k and were able to enter the work force much sooner. My best friend is an accountant for Delloitte(#1 pick for new grads) and even with a 4 year degree in an expensive area he’s only making a little more than everyone else who went to tech school. He has a ton more income potential down the road than them but had to wait 8 years(military to pay for school then over 5 years of school).
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I do not believe teachers should automatically get their masters degree, especially if they are taking on more debt to do so. The best route is to get your national board certification. In my state, SC, a teacher will get an automatic pay raise of $10k with this certification and it lasts for 10 years. This is one year of hard work but by doing so you earn enough extra money to pay for most of your masters work or live comfortably on your new salary. My wife is a teacher and after looking at all the ways they can earn more money this is the best bang for the buck.
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I think that education can be a good opportunity, but the full time student/advanced degree option is not the best fit for all. Attending part-time may take longer, but could be less of a financial burden. Does his school system reimburse him for classes that he takes after the semester?
My mom is working on an advanced degree and is taking 2 classes a semester. In January, they reimburse her for the Fall.
I wish both of them well.
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I never went to college and I can’t say I ever missed it. There is plenty of free education online and, unless you want to become a rocket scientist or brain surgeon, it’s easy to get jobs that “require” a college education even if you don’t have one. Just get involved in the community (computer science in my case) you want to be a part of and never stop learning about it. Ever.
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I’m considering going into debt or raiding the EF in order to finish a masters. So in some ways I understand the OP’s position. But I enjoy education and do not see it as just a means to an end.
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Just from the perspective of money (not happiness, etc):
It’s quite “easy” to determine the optimal path.
What will it cost you to go to school (including time that you’re not working (“opportunity cost”), child care, tuition, extra health insurance, etc)? And how much extra will you earn per year? For how many years? Realize that an extra $1000 in salary in 10 years does NOT cancel out a $1000 expenditure today, keep as many variables equal as possible, and do the math. That’s called the Net Present Value of your decision — the income minus the expenses, all in today’s dollars.
First, compare apples to apples. Don’t consider what you’d make in Washington unless you couldn’t get a job with your current education in washington. (It’s unfair to compare a principal in WA to a teacher in UT — you should compare to teacher in WA instead.)
Next, I’d say don’t be concerned about debt. If the NPV is $100K, who cares if you have debt (as long as it’s realistically payable)? Even if you have to take out $100K in debt, if you “only” pay $20K in interest, you’re still ahead by $80K.
Next, consider other options. Measure the NPV of “stay the course” (no expenses, but less income) vs. NPV of school (see above) vs. NPV of, e.g., getting that cerficate at night school. Financially rationally, you should choose the highest NPV.
Well, that was the theory. What about practise? I remember seeing some graphs in university which compared the costs of school with the potential for income. The cut-off point was essentially after 4 years. Meaning that, on average, extra school doesn’t necessarily pay for itself after your bachelors. True, there are lawyers and doctors, but this is the average. I even question getting an MBA for myself — I’ve seen some employers say that they might pay you an extra $5K per year.
Personally, I went into debt for school. I didn’t /have/ to and spent far more than I needed to, but that’s a different story. I was in a $80K/year dot-com job that, if i were even able to keep, would have probably maxed out at about $120K. Four years of school, not earning that salary, and paying for tuition later, I’m in a $120K job and I’m not sure what the cap is.
James
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There are so very many factors and the answers will not be the same for everyone.
I am in the same place as the person in your first example. I am in my late 30s with a 5 year old and a 22 month old. I have been home with them since my oldest was born. I worked in advertising for 12 years before he was born and have determined that for a number of reasons that is not a field I want to go back to. However, now that my daughter is getting a little older I have been thinking about what it is that I do want to do. I have been giving serious consideration to going back to get my master’s in library science.
If I do go back to school, I would probably have to go part time at first because paying childcare as well as grad school fees is not possible as I would have to take loans for grad school. So, it would probably take me close to 3 years to get my degree. Then, I would feel obligated to go back to work full time to justify the expense and disruption to my family of going to graduate school. But I am not convinced that me going back to work full time is the right path for my family. So, although grad school would give me some more options it would also take away a lot of options.
My solution right now is to get some certifications that will allow me to go back to a field that I had left before starting advertising. It will be less time consuming and expensive than grad school and give me some options while I try to decide if investing in grad school is or is not the right thing to do.
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What will it cost you to go to school (including time that you’re not working (”opportunity cost”), child care, tuition, extra health insurance, etc)? And how much extra will you earn per year? For how many years?
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Unless you’re training for a specific career (e.g. teaching) you can’t assume extra earnings. Where I work there are three college graduates earning minimum wage.
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Some people say that a college degree is worth more than a million dollars in increased earnings. He says college is a good investment.Where’s FMF when you need him?
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I know there are a lot of scholarship and grant programs out there that are geared to stay-at-home moms who want to get a degree (and presumably advanced degrees too) and get back into the workplace. I definitely think Lisa should look into that. try scholarship search engines like FastWeb and Peterson’s.
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In my case it was definitely worth it. When I graduated from grad school I had 30k in student debt. My first job was a “dues-paying” one and I only made $24,500 a year (THAT was awful). The next year I got a job with a salary that doubled that. My salary has gone up exponentially since then (10 years ago). I would be absolutely barred from holding the job that I have now if I did not have an MS in my field (it is required).
I paid off my 30k loan about 5 years ago.
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I don’t think it’s worth it, and that isn’t really to say a higher education is a waste — it’s more a statement of how overpriced it has become.
I dropped out of University and landed a job, which I still have to this day, less than a week later. Had I finished my degree, I can never be certain of where I may have ended up, but I find it really unlikely that I’d have come out ahead of where I am now.
Hard work and determination have gotten me farther than a diploma ever could have. And best of all, it was free.
For those already in the corporate world — to hit the pause button to go back to school, and into debt — only to start over again at the bottom… well, I think it’s a bad idea.
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I think it’s not a yes or no question – you have to look at all options. My husband just finished getting his masters, which should boost his income by 25% or more. To us, that was worth it.
Getting a second college degree? I think way too much stock is put in getting a college degree. Yes, some jobs require one. But there are a lot of good jobs you can get with just having one. I never used mine specifically, but I think it helped me get better jobs because I had it.
You also need to take into account what kind of pay you’ll get with a degree in that field. If you’re just switching from one 30K field to another, it ain’t worth it. If you’re going from a 30K field to a 75K field just with having a different degree, yes, by all means, consider it.
You need to really look at what the options are without getting the added education and do everything you can to work it that way, leaving additional education as a last resort.
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I think one has to think long and hard about what they want to do before committing to school, or you end up like my fiancee. My fiancee, before I met him, went to graduate school for Government Administration. He went to a private university and it cost him about $50,000, most of which is debt we will pay for for the next 30 years. Now, this is a sound investment if he were interested in becoming a high or mid level government administrator, who would make 80-120k a year. But after working in that industry for a year it become really clear to him that he hated that world. His degree is still useful, but he’s more interested in budgeting and analysis in non profit work, which makes 45-60k a year. My career field pays about the same, so we’re stuck paying this HUGE debt for something we’re not getting much use out of. My advice is to get career experience in that area before making the huge financial committment to graduate school.
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For Jethro another thing he should consider is whether or not he wants to go the administrative route. Many teachers have no desire to be an administrator. My mother is a teacher in TX and although she would like a Masters Degree in teaching, the salary difference is only about $2-3k more per year. That is not enough to pay for the schooling unless she goes into administration, which is not what she wants to do.
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As Ralph Waldo Emerson said, “Money often costs too much.” In any personal finance decision, people most often go wrong when a decision is primarily based upon “the cost.”
For example, here are some of the “wrong” questions to akd regarding the education decision:
How much will it cost me?
How much will my pay increase after receiving the degree/certification?
How long will it take?
Here are the “right” questions to ask:
Is there potential to learn more about something I am passionate about?
Will I actually enjoy the process of learning?
Am I doing this for me or someone else?
Does the education align with my “life goals?”
After answering the “right” questions, you will find that creating a financial solution becomes possible and, most importantly, the financial solution becomes a part of your plan…
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When I think about this, the major issues are whether the field I want to move into requires a certain amount of education and licensing. Different states require different levels of formal education and certification for the same position to get your foot in the door.
Whether it would be a “good investment” for you depends on costs for the school you go to, what field you’re going into, whether you’re going into a field for love or money, and how you’re going to pay for it.
Since we’ve married, DH and I have both been back to school — I test drove classes for a possible master’s (decided against that direction for now), while he got his BBA and MBA. He’s a stay at home dad, so did we waste our money? Nope — we paid cash for his degrees as we went along and don’t regret it a bit — he’ll always have those pieces of paper if he needs them. Now, if we were still paying off loans for those degrees, I’d be saying something else!
And in response to #16 . . . I would have completely agreed with you 7 years ago, before DH and I become completely interdependent financially with 2 small children. Now, I plan my education for practicality first, then love. Once the kids are gone, or after our first $2M (financially independent), I can go back to school for love.
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Education is usually worth it, but definitely NOT always. I think it gets more dicey once you have a B.S. and are considering going into debt to further it. You really have to run the numbers, as earlier commenter detailed.
Also, take into consideration personal gain. If education is a “break-even” effort, or even a slight financial loss, there may be personal fufillment reasons to doing it anyway. The most important thing is to understand what you are doing.
I went into debt for my undergrad and it was most certainly a good investment. Now my company pays for me to get my MS while working, which costs me time and hard work, but not money. But I wouldn’t get my MS if I had to pay for it myself, especially if I had to leave school for it. I’m in engineering, and in sciences it seems if you are a meant for full time grad school, you should be able to get stipends for full time study. This isn’t true for all fields
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This is my story. I started my Masters in Computer Science when I was 34 years old. I studied in a school that offered the lowest tuition possible. After a semester I obtained a grant that covers my tuition and gives me a stipend of 700 a month. During this time I lived very frugally and kept my focus that this is only for 2 years. Today I earn much more due to my educational background and I am much more confident. I think paper qualification helps, whether you like it or not.
Another option is the local community colleges that allow you to do a class at your pace. They are so affordable and I think this is another great way to get an education. You can also try to get a grant, the colleges are always happy to assist you in this…
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I’m finishing up my doctorate right now and the advice that I’ve been giving folk about graduate school is this: __Do not go to graduate school until you find that you cannot have the life you want without it.__ People tend to snicker when they hear me say this because they think I’m jaded or cynical, but I happen to love the choice I made for myself.
Thoughts:
1) Financial cost/benefit–see comments above
2) Learning can be done far outside of formal educational settings. Loving to learn is not equal to “MUST GET ANOTHER DEGREE”
3) Psychic cost/benefit–there are absolutely thrilling benefits to learning stuff. It’s fun, fascinating, etc. However, as a totally competent adult, what will be the psychic cost to be treated like a kid again? I mean do you want homework, grades, lectures? This is not like work where your work is rewarded with pay. In fact, you are paying the institution to do this to you. This is not like work where you get periodic performance reviews. You will be in an environment of constant evaluation and accountability for material that is new to you.
I was a teacher and I had some burning questions and interests that couldn’t be answered outside of a formal research environment and training to be a professor would allow me to teach (which I love) and do research (which I also love). I’ve been able to find money each year doing various things to pay for my education, so I’m not in debt. But this has been a grueling process both in terms of the work and what I attribute to being an adult but having to operate like a child–working for the approval of a teacher or advisor.
When you’re weighing whether to return to school, consider this as well.
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No. Not always.
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I think it may make more sense for the mom to go back to school. Being out of the work force for a while can hinder reemployment, grad school would probably help her get back on track. I’ve heard of grad school programs especially designed for moms coming back into the workforce, might be worth a look.
I went back to school (full time 3 years) for a professional degree and my first year of post school employment I tripled my salary.
My husband went to grad school part time (weekends for 3 years) partially paid by his employer. My husband took on about $27,000 in debt and I can’t say its been worth it yet (only a small return on investment thus far). But the degree, if he’d paid for the whole thing himself would have cost $50,000 so he got a ‘bargain’.
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As Dorothy Parker said, if you can’t be a good example, be a horrible warning. Well, I feel like that horrible warning. Go back to school. In my 30s I had two chances to go to excellent masters programs and didn’t because I didn’t want to take on the debt. I ended up with debt anyway as an underearner, and now at 50, having just lost my job this fall, I still feel I have to go back to school — but it’s a lot harder now. When you hit 40, you really begin to see that those with graduate degrees have more options. Since there is a clear career path evident from obtaining this degree, it seems like a very good idea to me.
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Educational debt is a double edged sword. If it wasn’t for the educations that we have, our income would be much lower than it is. Of course, thankfully our educations allowed for that, or we would never be able to pay back our educational debt.
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Is the cost of an education worth it? Well the answer is relative to each one of us. First, I would suggest that the mid-30′s women clearly define their end goal and then work back from there. It may turn out that they do not need school to meet their set goal. If they do go to school, I would recommend nothing less than a degree in business admin unless they have a better option to make money. Let’s face it she has kids and is going to need a solid 20 yrs of earning to keep pace with the costs she will incur.
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@Leslie:
not sure what your reasons for considering an ML(I)S, but don’t believe all the hype about the librarian “shortage”. There are many wonderful things about being a librarian but it can be a difficult field to break into without prior library experience and the cost of the degree can be high in the face of a $40K a year (or less)salary. One way some folks make it worth it financially is to find a non-librarian job in a library that will pay for at least part of the cost of your masters program. If you’re not there already, the nexgenlib group can be a great source of info: http://groups.google.com/group/NEXGENLIB
Though I thought it would be at the time, looking back I’m pretty sure my MLIS (out of state tuition, fully funded by loans) wasn’t a good financial move. The freedom and intellectual stimulation I get from my job is probably worth it though.
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I think that education is worth what your drive/goals are. It really depends on what you see yourself doing in the next 20-30 years. Education never goes away, and every year you get older it gets harder to accomplish.
I personally think my educational debt was well worth it. It cost me about $50,000 in loans to complete undergrad and grad school (I really worked it and got 2 Master’s degrees in 2 years full time) and my salary went from $17,000 post BA to close to 6 figures 7 years out of grad school. That being said, I also got several promotions and really focused myself. Many others with my degree are making significantly less, but still far more than they would in this field (social Work) without a master’s degree.
My husband went $70,000 into debt for an MBA, part time, and he is not even finished yet and was able to parlay the degree into a new field making well into the 6 figures.
So for us it payed off–but it is all what you make of it. Would it have made as much sense for him to pay $70,000 to go to a third tier MBA school instead of a top 5? Who knows.
The reality, however, is that earning potential continues as your career continues, and more often than not, that degree will pay off whether now or down the road.
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This is a situation where the non-financial questions are very important, if not more important, than the simple financial ones.
– Do you like the job you have?
– Will the education help you do better in your current job/field, or will it help you move into a different field?
– How sure are you that the different field is a good fit for you?
– How sure are you that you can manage the changes that come with going to school?
In Jethro’s case, yes, he could earn more as an administrator in another city. Is that what he wants? If so, that may be a very good choice – but if he’d rather be teaching, or if moving requires leaving family that he really doesn’t want to leave, then he might end up with an expensive education that leaves him overqualified for the job he really wants.
My BS in Computer Science got me from doing day care and clerical work to a salary job at Microsoft. So I’m not going to knock education. But if going back to school is going to leave you not knowing your kids or if the lack of sleep from school + work is going to cause major depression – find another way!
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Expensive education is only worth it if you reasonable can expect comparable payoff upon graduation.
In my field, law school is not as worth as much as it used to. Unless you are at the top of your class at a top tier school, lawyers average around $40,000 upon graduation but average around $75,000 in student loan debt. Clearly not always worth it.
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Jethro, I too am a middle school teacher, as is my husband. We work in Los Angeles, though, where the starting salary is over $45,000. Without even getting a Master’s, you can easily make over $50K after a few years. Sure, the cost fo living is higher, but you’d probably still come out ahead simply by moving to a better-paying area.
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One more thing to add: It really is not just additional education that gets you a great job, but really the choice of subject being studied, the demand in the job market and your personality in handling the job. I frequenty study people who have high paying jobs and find that they all have strong personalities and special strides that makes them who they are and what they are. You may have great education, but without proper dedication and determination, I don’t think it matters. You need to sit down and chart out your life on a paper and see what is the market demand for your profession, be realitic, look at your limitations and then decide whether an education will justify your progress.
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I took on $30,000 in student loan debt to get my MBA, which resulted in a new job making $32,000 more than my previous one. I would say that debt was an excellent investment – but I work in an industry known for high-paying jobs.
In the teaching profession, social services, and the non-profit sector, extra education does not necessarily mean tons more money. Depends where you live and what your life goals are.
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I went to graduate school a few years out of college–partly because with the TA-ship and other grants I was offered I was making as much (and got better health care benefits) than working at an entry-level job. In fact, one of my undergrad advisors told me not to go to any program that didn’t want to invest in me (this doesn’t work for professional training, but other kinds of MA/PhD programs usually try to offer support to every one they accept).
If one is willing to live the graduate student life, the debt load doesn’t have to be so great, I think it it’s when you try to maintain a “real” lifestyle (especially with kids) that higher education becomes a major debt producer. Even undergraduates seem to expect that they should have every electronic toy and lots of entertainment funds and so some of the debt they get into isn’t from tuition/fees/schooling per se but from a lifestyle choice at the same time.
That said, I think that you might have to accept that more education doesn’t equal more money down the line. BUT if you enjoy the process, then you have to weigh that against an equal number of years of 8-5 in a position you don’t like that might pay more.
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This is a personal decision that varies with the individual. If you are set on pursuing a higer education I would explore online programs which are relatively cheaper than any other brick-and-mortar institution. Not only will this save you money but also time. Online classes will allocate time to spend with your family since you don’t even have to leave your home to attend these classes. A lot of people do not even consider this option and belittle it. I would not jump on that bandwagon so quick. One of my professors is currently getting her PhD from an online institution and spoke highly of it. Albeit, taking online classes requires discipline and committment, if you are at this stage in your life, I think you meet the criteria.
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Before B.S. $16K
After B.S. $24K
After Masters $42K
Now (7 years later) $70K
Monthly school loan payment was $210 on loan of $26K. It’s now paid off but that’s due to an inheritance; I’d still be paying and happy to be paying the loan off (I had it down to $16K). I found it to be totally worth it.
And I work no where near the field I studied.
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I will refer you all to a recently published paper (that I just reviewed on my blog the other day) entitled : By a Thread The New Experience of America’s Middle Class(you can read it here: http://www.demos.org/pub1514.cfm)that states:
“As the difference in earnings between high school and college graduates hits record levels, a college degree is becoming a minimum requirement for the middle class. Over the course of a lifetime, a graduate of a 2-year college earns about $275,000 more than someone with only a high school diploma. Someone with a degree from a 4-year college earns nearly double. A 4- year degree translates to around a $1,000,000 more in lifetime earnings.
Greater earning potential means greater likelihood one will be able to own, save and invest—in short, to pursue middle-class security. The correlation between education level, income and ownership will undoubtedly continue in the future. In the past, a worker with a high school diploma, solid work experience, and stable employment could support a family and attain middleclass
security. Because of changes in the labor market, this is rarely the case today.
It is difficult to imagine that workers holding only high school diplomas will be able to support families and achieve security within 20 years. For this reason, our optimal education threshold
was set at requiring the head of the household or spouse to have a bachelor’s degree. Financial security was considered at risk if neither the head of the household nor spouse had education beyond a high school diploma.”
Going forward in the world’s economy it is going to benefit *most* people to have some sort of a degree.
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It depends on what you’re studying. I’m still young enough that people are constantly encouraging me to get back in school, and telling me I “need” a college degree. I wanted to be a baker, but rather than getting into a LOT of debt getting a 2 or 4 year degree in baking at a private school (http://www.jwu.edu/sfs/tuition.htm 20,000 a semester, 3 semesters a year) I paid about $1,000 to get my 1 semester baking certificate at the local community college.
Flash forward a few years- I’ve got a job I like, I’m above and making more than someone who went to a “real” culinary school and I’m not in horrible debt. I’m 21 and I haven’t had to rely on my parents for money since I moved out at 19. I’m building up my emergency fund and after Christmas I should have enough to start an IRA.
I’ll eventually go back to school, because I would enjoy it, but not until I can do it without going into debt. For my career it doesn’t make financial sense. The idea that one should get into debt to go to school 100% of the time is insane but people still expect me to do it.
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I found your blog some months ago and am absolutely loving the content! I may have something to contribute in answer to this post, although only to Lisa – i’m unfamiliar with Jethro’s situation:
I would raise two points for Lisa. One is to take the chance to tailor the courses and qualifications she studies towards a specific career choice. My first degree contributed *nothing* towards me getting my current professional position, my boss tells me. Generic qualifications can be helpful, but tailored courses that work towards a specific job are sometimes essential, and could make Lisa’s chance of paying back her study loans a lot more certain.
The second point is to second the idea of part-time study that Laura raised. I’m studying my second degree (just for fun this time) this way, and i love paying as i study. I am not gathering more debt, i am enjoying the subject immensely, and i am simultaneously paying off my debt from my first degree! If Lisa is okay with the idea of the study taking around twice as long, part-time may be a workable compromise.
Keep up the fantastic content, i’ve got some great ideas and motivation from this blog, and i’m really enjoying hearing about your own personal struggles and successes.
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I know two people with this dilemma. One did her bachelor’s late in life and had a couple job offers before graduating BUT applied for grad school because they offered 100% full assistantships (like scholarships except you have to do graduate asst. work while getting your degree). The irony is she will probably get paid similar to what she would’ve had she not gone back to school, but this way she will be able to get her master’s without paying any tuition.
Someone else I know did 1 year of graduate school but left to take a job offer. It’s been a few years and he might now slowly go back to school part time to get his master’s because now his workplace will pay for his tuition as long as he keeps working for them.
Because the Utah reader works full time, he will not really have time to do graduate work/TA’s to help pay for his tuition. And it doesn’t sound like he has an employer who will pay for his degree. If he decides to go back and take out student loans, see if because he is a teacher he could get his rates/amount reduced by teaching in certain areas or in more rural areas etc . . . there is a program that does that.
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I definitely don’t want to go through college right now, but education is such a must these days. People have brought up the standards including Asians (I’m Chinese too) and it just sucks for some of us.
-Mike
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My other solution (it might be a crazy one) but see if you can get a job on campus (I mean an office position, asst. to professor, researcher etc, PR work, computer/tech work . . . ) Someone I know got a $12/hour job doing PR work on campus but ended up later applying to grad school there and because of her job, got an 80% tuition reduction BUT she had to work full-time (at least 30 hours a week) to maintain that discount. I also know someone who was assistant to one of the deans and she got the same tuition discount for her masters. Also, if not you, what about your spouse getting a job there? Then you’d qualify as well. Most universities give staff/employees huge tuition discounts for themselves and their families (including their children) if they decide to attend the school.
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I guess that it depends on the field in which you are interested in… you could always do a net present value calculation.
http://en.wikipedia.org/wiki/Net_present_value
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I would check with your school department to see if it offers any sort of tuition reimbursement or assistance plans. My former high school gets vouchers to take classes at Northeastern University for free. They’re released to teachers first, and then students and residents can take advantage (they always have extras). I took a class on Personal Finance over the summer, and now everything I’ve been reading here and in other similar blogs makes much more sense!
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A great topic, one I have been thinking about ever since I hit my 5 year reunion time from undergrad!
Recently I enrolled in community college. It was a long road to this decision but finally I decided on a goal that offered no other path than more education.
Originally, I desperately wanted to be a social worker and felt I had to have the MSW to get there. You can’t get that at a community college, and I still am paying off my B.S…. so I did not relish the idea of going another $40,000 into debt to finance a career that would involve making that… or less.
At some point I came back to what I wanted to do – help people – and realized I had been ruling out nursing for no particular good reason. It has the opposite cost benefit analysis – I can get an Associate’s for less than half as much, become an RN, and demand a solid middle-class salary if I apply myself.
When I showed up to transfer my credits the academic adviser asked me why I wasn’t going to a 4-year school. I asked him if he’d noticed how much they cost nowadays?
I’m basically trying to transition sideways, salary-wise; I will come out in about the same place. But I hope I will have ten times more fulfillment as a result.
An interesting point I’d love to see real analysis of is a path for transitioning from being a full time salaried employee to being a full time student when your days as a dependent are long gone.
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I am considering going back to school at age forty. Looking at my situation purely financially, there is no question that going to school would be a foolish decision. My income in my new field would be about the same as it is now. Depending on which school might accept me, the degree could cost over $100K in tuition alone, and the lost wages are huge.
However, I could pay for it entirely out of savings without touching retirement accounts. I would have much more flexibility in terms of where to live than I have in my current field, so I could move to an area with a much lower cost of living. And as The Financial Philosopher says, I would have the chance to do something I love: in my case, veterinary medicine.
The financial decision is frightening. I don’t want to wipe out that much of my savings. I worked hard for that! But on the other hand, I’ve been burned out in my current career for well over a decade. The full cost/benefit analysis has to cover more than the accounting books alone, and this might turn out to be the best thing I ever did.
I’m still thinking hard about it. I know it is not a good investment in terms of future income. It is important to face that honestly. Then it is important to decide whether it is a good investment in terms of future happiness.
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I have a Master’s, but haven’t worked in my field (chemistry) for 20 years. I’m a web programmer instead. But the degree still matters — I wouldn’t be the supervisor without it. And that translates to an extra 30K/year.
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I curse writing my student loan check every month, but the opportunities my PhD has brought make it worth every penny.
We figured how much I’d make given the career path I was on compared to how much I’d make after school (minus how much I’d lose while in school). The math made it clear that if I could find a job post-graduation, it would be worth it.
Don’t forget to consider all the other costs of going to school full-time, like books and photocopies, coffee and convenience foods, and possibly, therapy!
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Whatever you do, dont’t go to law school (unless it’s NYU or Ivy League). My friend was a financial analyst making $40K when she decided to go to a private law school at the age of 25. Just before graduating, she asked her job placement advisor what the average salary for starting attorneys might be. The answer was 35K/year. Sure, law schools websites tell you that starting salaries are over 90K. What they don’t tell you is that those are the salaries of a few of their seasoned graduates who filled out their schools’ surveys. The ones who didn’t fill out those surveys work for $15-20 per hour reviewing legal docs (see a recent article published in The Wall Street Journal). As far as my friend … she passed her bar exam on the 1st try, she’s diligently repaying her 60K student loan, and often laments how low her salary is.
Now, those with MBA degrees … how many of you can calculate such basics as cap rate or a discount interest rate?
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Keep in mind that your compensation does not always coincide with your job satisfaction.
I am a 46 year old female physician (pathologist), extremely highly financially compensated, who is completely unhappy and disgusted with my chosen profession. I spent 7 years in college, 4 in medical school, and 5 in residency, finishing with approx. $120,000 in student loan debt. I just paid off the last of the debt last year at the age of 45. I am so disgusted with the current state of pathology in general, and of the practice of medicine that I am about to embark on a new educational goal-I plan to apply to law school. I will be taking the LSAT in February and applying to a local private university to attend law school part time while I continue to work as a pathologist full time. I know that this sounds absolutely crazy, so I have not shared this with any family, friends or colleagues. Only my husband and children know!!
I will be taking on enormous student loan debt all over again (or else depleting some our current assets) to pay the private school tuitition. If I eventually leave the practice of medicine for the practice of law, I will most likely be taking a pay cut.
From my perspective, you simply cannot put a price on pursuing your life goals, especially when a great education can help get you there.
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I think teachers are not paid enough and that the extra education to earn those few bucks for such a tough job, I think it’s a must, he will pay of the deb very soon once he hits it. The last post is just so right, you can’t put a price on education, it’s just too misguided to finance and math themes, there is no sane reason to go into social jobs from a debt perspective.
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