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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For the mom considering going back into the workforce…
20-odd years ago my mom went back to school after my father’s death. She hadn’t worked since before they were married, and we were all under age 11. She went to community college part-time ostensibly to get a certificate as a laser technician. (She already had a BA, if I remember correctly.) When she graduated, there weren’t any jobs available in that field.
But…she was able, after a couple of false starts, to get a good job that she enjoys (most of the time) with a good pension. She’s been there at least 15 years now.
What school got her, according to her, was a re-introduction to the world of grownups
and an opportunity to prove her competence to herself and others. Which seems to have been worth it.
(Plus: my mom knew how to build a LASER when I was in junior high. How frigging cool is that?!)
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The answer, as always, is “it depends.”
Three points that I don’t think have been made yet:
IF you go back to school, you don’t necessarily have to quit your full time job. Distance learning programs are available at lots of reputable schools for lots of fields/degrees (including MLS – master’s of library science), and at the master’s level, many universities offer classes in the evenings because they expect to have students working full-time jobs. Keeping that full-time income can help you avoid racking up significant debt.
Second, you may be able to volunteer to work in/around the field you are interested in, to get experience that can help you land a job without another degree. For example, you could help a nonprofit organization set up a donor database to get experience wtih database development — or volunteering to help in their office and assisting on some of those tasks. This will also help you figure out whether the new field is actually what you want.
Third, if you already have a bachelor’s degree, it’s very rarely a good idea to get a second bachelor’s. Look at master’s or a certification instead. (An exception might be something like nursing, if your first degree was in something completely unrelated.)
Good luck!
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I have yet to use my college education but wouldn’t take it back for the world! I went to a state school and worked my way through it so it was damn cheap. However, scared by college costs, I took out the maximum school loans allowed. They sat in my high-interest account earning interest while serving as my school emergency fund, should I need the $$$ for books, tuition, ect. Never did, and make a chunk of change from them.
I’m now working on a second degree, one in a subject that always interested me. I’ll probably never use it either, but I love learning. As long as I’m paying cash for my classes, it’s totally worth it to me.
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IMHO one of the great mysteries is why a Master of Library Science (or related degree) is necessary before one is able to get into the rather low paying librarianship profession.
And I am speaking as somebody who started an MLS program. I went through two quarters and left it for computer science when I got a really good look at the curriculum vs. the job and salary expectations for both. The sad thing is that I would really enjoy being a librarian, but don’t really care for the IT profession.
At any rate, I think library science should be an undergraduate degree.
As for going into debt for college — well I certainly know about that. And for the most part it was 75% a mistake for me, but 25% a good thing. It left me where I feel obligated to stay in a profession I learned I really don’t like. On the other hand, I also command a higher salary than average and have a demonstrated edge getting a job.
If I had to do it over, I’d probably have still gone to grad school but under different circumstances.
db
P.S. for the pathologist looking at law school — are you really sure? I hope you consider that move carefully and make sure you really want to go into law. Otherwise why not try to make a career move a different way?
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it’s a great coincidence to see this post, since i just took my last two tests of my very first quarter back at school today. i have two points to make:
- jethro: if you don’t want to be an admin, don’t get the admin degree. if you want to be an admin, and teaching is not holding your interest, get the degree. i think all the penny-pinching in the world isn’t worth taking a job you don’t want, or passing up on a job you do.
- for both of you: LOOK FOR SCHOLARSHIP MONEY. i can’t stress that enough. i thought there was no way i’d get any financial help with school, but a friend convinced me to keep looking and i somehow found a little-known bucket of state money and now 100% of my school is paid for, including books. call your prospective schools and talk to their financial aid people, check on the web, etc. i bet you’ll be surprised.
good luck!
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In my experience, the correlation between education and earning power is not that strong. Infact, the correlation between salary and any factor is kind of mysterious. I think it has more to do with your drive, your ability to sell yourself, knowing the right people, and finding your niche. It also has to do with outside factors like the economy, who’s hiring, where you live, interpersonal dynamics, etc. Consequently I can’t see going back to school for financial reasons – seems like you’d risk a much bigger loss than gain. Though it might be different if you had no degree at all or sought a position at a very structured/bureaucratic institution.
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Have to disagree slightly with Amy above. It really isn’t a complete mystery what determines salary, and I write about it every once in a while in my blog.
That being said, I had to make a choice between going to get a MBA or to continue earning, and I chose to continue working. The math didn’t make sense. I just looked at what I would make coming out, vs what I currently make and it was easy.
The equation gets very different if you want to change careers. In that case, I would focus on what you want to do, not what you can earn. The money will come, but finding happiness in your job may not if you only focus on the money.
Can you do what you really want to do without the additional education? If the answer is no, then getting the education makes sense and the cost of it should be irrelevant.
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as a teacher, unless you want to jump tracks and become a principal, why oh why would you bother getting a masters? at my school a masters is only 500 a year more in salary.
instead, i would encourage a move to Houston texas where it is insanely cheap to live (nice home for 100,000) and get a job at alief independent school district in houston texas. i am 5 year teacher making 46,000 with an upcoming additional stipend of 8k for tutoring after school.
oh, and no state taxes
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This was a decision I had to make about 3 years ago. I had a four-year Bachelor’s degree in Economics and a decent paying job for where I lived (about $35-40k, depending on bonuses). I was looking at going back to get an MBA and knew that I would have to take on about $36000 in student loans in addition to the money I would pay out of pocket.
What also drove me to do it was that I didn’t see a future with the company I was with at the time. I was mostly dissatisfied with management and my situation. They were willing to let me work while I went to school, so the income hit was somewhat negligible.
Deciding to do it was a complete leap of faith. I knew my potential income could be significantly higher, but there was also a risk that I might not find a good paying job before the student loan payments began.
I finished the degree this summer, and it did take nearly four months to find my new job, but now that I have it, it’s been well worth the wait. I have increased my income by a very big amount, and expect to be able to pay off the loans in a couple years.
Most importantly, though, is the job satisfaction I have now. I enjoy working again. The position I’m in would not have been available without getting an MBA and the upside to my career is almost unlimited now.
So, if you think getting an education will (1) help you find a more fulfilling career and (2) help you increase your income, then based on my experience, I would go back to school.
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This is a tough decision and I think it varies on the person. I wouldn’t waste time with a second undergraduate degree unless it’ll provide you with skills (such as engineering, computer science, etc.) that you didn’t get when you completed your first undergraduate degree.
I think a graduate degree is more likely to be worth the sacrifice.
I recently made this decision myself. I’m making $45,000/year and want to go back to school for an MBA. I’m looking at both full-time and part-time programs. If I go with a part-time program, I keep my salary, my stock in our company, my stock options, etc. The only real cost is the $35k/year (for 3 years!) for tuition.
However, if I do a full time MBA program, the tuition not only jumps to $45k/year (only for 2 years so it’s really about the same) but I also give up my salary, my unvested stock and options too. The decision is tough. However, I expect to make much more money after getting my MBA and to make that additional income for the rest of my life. (I’m only 28 now.) So to me, it felt like getting another degree was the right move.
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Yes, unfortunately it’s all situational. Teaching can definitely be one of those careers where the continuing education can really make a big difference, if you like what you’re doing–things really build on each other pretty easily once you’re in the profession.
There was no National Board certification when I started teaching, so I spent a few grand getting my Master’s (I scored a work study job and got a great discount). It took me 16 months. The pay raise paid for the tuition in a year, and after that I was making quite a bit more than previous.
Now I’m out of the teaching profession for a few years, expecting a baby, and planning to go back when the kiddo is a few years old. After that I do plan to get my principal’s credentials. It’s something I’m passionate about, and I can get the credentials in less than two years since I already have my Master’s. The whole program will probably cost me less than $8K and I’ll see a 10-15K raise with the first administrative job I land…so that is definitely worth it to me.
That said, I am now to the point where I can’t really recommend teaching as a career to anyone. The way the federal government is working at destroying public education, who knows if any of these jobs will be around in a few years…
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Absolutely not. I’m in college right now, and there are all sorts of people who do not belong here. They’re at college because their parents expected them to, have not declared a major, and are taking all sorts of random general education classes with no end in sight. Additionally there are all of those who are majoring in things that have little practical application in the business world. They might be fun to learn about, but you won’t make more money from doing it.
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Here’s another option to consider. There are companies who will pay for your education while you work part-time for them. The first that comes to mind is UPS. The only caveat is that UPS offers this only for part-timers at its US hub in Louisville, Kentucky. Education is very valued in Louisville and there are teaching opportunities here as well.
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Not to sound harsh, but I wouldn’t place as much importance on the financially optimal decision as many of the posters. I got a B.S. in finance and have been very fortunate in the income my career provides. My brother is pursuing a PhD in religious studies. Compare the two and obviously from a strictly financial perspective I made the better choice.
I’m fortunate in that I enjoy my career. My brother would not enjoy finance.
Don’t stress about a cost/benefit analysis if going to school would allow you to do something you truly enjoy.
Bottom Line:
You can get a 4 year degree and earn six figures, but you may not enjoy that career.
You could spend 100k+ on additional education and may not earn enough additional income to justify the cost, but if it allows you to do something you really enjoy, who cares?
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Sometimes with certain jobs, you need a college degree and more to get ahead. I’ve seen internal job postings that require only a high school degree or equivalent and they almost always pay the low $20-30s.
Do some research, talk to people in the industry or jobs you’re interested in to see what education/certifications is needed. It can save you alot of money and frustration! I have to invest $1100 into a course to become certified in a new industry so people will take me seriously and so I won’t have to take entry-level jobs.
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I went back to school to get a BA to set me up for becoming a therapeutic psychologist. However, upon completing the BA, I got a job offer in my previous profession, the one I’d been trying to leave.
I like to say I’m the Michael Corleone of computers; I keep trying to get out, and they keep pulling me back in!
So instead of going for the Masters, I took the job. I’d gotten a good look at what therapists actually do and decided to pursue this interest in other ways. The new job offer is much less stress, in a lovely location.
Financially, it didn’t make much sense, because I didn’t jump to the new profession and took on debt. But the BA is helping me in other ways, as I apply the knowledge to new creative efforts. I’m ready for a Masters in some other field, if that should arise. I wouldn’t have found this new job if I hadn’t moved to the new location to study for the degree. So I’m still looking at it as a win-win.
So, cost of the BA–quite a bit, but in a low interest loan.
Pay off–good job in an area with a low cost of living, so my living level has been raised. New job also offers much more free time to work on creative interests than I would have if I had gone on to the new profession.
The husband I met in Cultural Anthropology–priceless!
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I have an MS in Computer Science from the University of Illinois at Urbana-Champaign. A state school, but one with a great Computer Science program, probably one of the best CS programs in the US. I had a teaching assistantship, so I had a full tuition/fee waiver as a “member of academic or graduate stuff” and a small salary. At my time there was a significant difference in starting salaries between BS/CS and MS/CS. Additionally, I could get a lot more interesting job with an MS than with a BS.
There are two kinds of assistantships: teaching and research. The latter is more difficult to get because it depends on grants; and most professors prefer PhD candidates. But if you get it, and your research assistantship is in the same area as your thesis, you are lucky: you get paid for doing the work you’d have to do anyway to finish your thesis.
Where I went to school they had a constant shortage of TAs in CS because the professors wanted help not only with beginning courses but with advanced courses as well; also because other departments had graduate assistant positions for people with undergrad CS degrees.
In other fields, assistantships were more difficult to get. A friend of mine who was doing MA in linguistics couldn’t get one at all. She had a Fellowship which is free money, like a grant, but not that much money. I knew a woman who had a teaching assistantship in Italian literature at Northwestern University, but languages have labs where they may use TAs.
Not sure how many assistantships there are in Educational Administration, but it is something to check out.
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[...] Is Education Always a Good Investment? [...]
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One point which I don’t think has been made above: If you want to work for others, get the degree. If you want to work for yourself or own your own business, forget the degree unless you’re going to need it for marketing purposes.
There are all sorts of ways to make money in the world, many of them involve working for yourself. I’m completely self-taught, a college drop-out, and do fine. I have never been asked what my educational background is (I’m a programmer/artiste type).
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@Disgusted Pathologist
Why don’t you do a fellowship in derm. or surg. path or something to change your perspective? Law school is a huge undertaking, and it’s VERY different than medicine. Take it from me, it’s day and night. Medicine is so exact and precise, law is frustratingly opposite. There is no right or wrong answer on the final exam questions…it’s all about how you argue.
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@ Disgusted Pathologist
Before you toss away all the years you spent in med school and residency I think you should evaluate what your expectations of medicine/pathology were and where they fell short or you risk repeating this same situation with law school.
Did you have any idea during the process that you were heading in the “wrong” direction (for you)? Were there no other areas of medicine that seemed appealing while you were a med student or intern? Did you have some huge misconception as to what being a pathologist would be like? Are you struggling with hospital politics or red tape?
You could spend the time and money to become a lawyer, specializing in a particular area of law, and find that you disliked it as intensely as you currently dislike pathology. (Particularly if politics or infighting is part of what you’re disgusted by; law is by nature adversarial and political.)
Is there some way you could still find what you’re looking for in medicine, even in a different specialty? Or could you combine your interest in law with your present expertise and become an expert witness?
At 46 I would think long and hard before going back into serious debt, when you’ve only just gotten out of debt in the past year.
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To disgusted pathologist–apply for financial aid/scholarships. My sister receives grants for law school and I have known others who also receive aid. You seem like a prime candidate for merit based aid, especially if your goals are to try to reform the profession, or somehow serve society.
To Lisa–The most important thing is for you to figure out what your goals are. This is left out of your email. If you would be going to a program solely to make more money, or if it is to escape from trying to find a job, it is a bad idea, regardless of the financial picture. In both of those situations it would be better for you to start dipping your toes into the field professionally, through volunteer work or joining a professional association first. If it is a moneymaking field, then try to find a job that will value the completion of an advanced degree, and hopefully that will pay for at least part of it. That will also ensure that your focus will turn out to be in line with what you enjoy doing.
If you feel “lost” Penelope Trunk on Brazen Careerist writes about why it is a bad idea to go back to school, at least on your own dime.
Some grad degrees will open doors and some won’t. For example I read that Ph.D.’s in English have a 10% chance of getting a tenure track teaching job. But a lot of professional degrees have a payoff, and there are references if you google enough that talk about which degrees “pay off.” And there are other factors, like the quality of program, to consider. Or your location.
Either way, grad school isn’t an easy option. It is challenging. Even if you are really smart. For a lot of people it is disheartening. So it is best to go in with a very clear idea of why you want to be there. You don’t have to be 100% convinced, but when a class goes worse than expected, you struggle with your advisor or your thesis, you want to at least have something inside you that encourages you to go on.
I don’t think finances can be the chief factor in your decision, but they should be a factor. If it is a Ph.D. program, you should not pay for it. Google this to understand why. But it is usually not a good idea to go into debt for a Ph.D., particularly if you want to teach at the university level afterwards. If it is a professional program, make sure you are realistic about the payoff versus debt.
I just finished a master’s degree in a non-professional field and am very content. It was much harder than I thought it would be. My degree was fully funded so I have no debt. I would have no qualms about incurring debt for education in the future or spending large sums of money on education if I could afford it and I felt like the learning would be interesting and possibly lead to more fulfillment on the job front. Best of luck.
To Jethro, it sounds like you have a pretty clear cut issue. If you want to go into administration in Washington, get the master’s. If you want to stay put and don’t care that much about learning for learning’s sake, don’t get the master’s. If you want to stay put and you do want to learn, wait a little until you get a handle on your debt, or find out if there are fellowships available or tuition reimbursement.
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A surprising number of the posters above seem to have forgotten that the point of education is to educate people, not to put letters after their names that can be cashed in for money. By all means, let students take an assortment of courses in whatever catches their fancy! That’s what distribution requirements are for, is to give people an exposure to a wide variety of learning experiences, enriching their personal life and giving them opportunities to explore options they might not have considered otherwise. And if, heaven forbid, they choose a major in the humanities and a less-than-profitable career doing something they truly, passionately love, I’d say they’re a lot better off than someone who tosses away eight or ten hours of precious time every day doing something they don’t care about.
I’m a graduate student (on fellowship) in philosophy, and even my dream job doesn’t pay half what I’d be earning if I’d quit after finishing my culinary degree and worked my way up as a professional chef. I really don’t give a flip. I profit from my education every day, whether I get paid for it or not.
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I can relate:
Iam 33 and I want to quit my federal $36,000 job and go back to get my Masters in Social Work (MSW). I hate to loose my benefits and the security of having a job for the past(6)years but I feel that the supervisors will never allow me to advance. I can get my MSW in a year and 20K. Longterm, I can do what I want, any where I want. I will have a hand of cards to play not just playing with the old cards that Ive been dealt. I know it sound CRAZY in this economy but what is a person to do? Do I allow my fincial out look to be controled by those who have no education and continue to be passed over for promotion to find out later that my bosses daughter go the job I wanted (that just fishy). Life is not easy but if you put the ball in your court you have some advantage. Education is always a way out!
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I say “no” to the question. Education is not always a good investment. I was a single mom working full time and I was strongly encouraged to return to finish my BA. People told me “Statistically people with degree make more money”. I graduated, left a job paying 27K for a job paying 29K with hours that required more child care cost. I left that job and moved to a lower cost of living area to make $10.00 an hour now. I love my life now but as an investment – it was not a good idea for me. I now have 21K in student loans that I barely can repay. I’m digging myself out, but wish I had’t finished my BA until the kids were in college.
I work as a receptionist for a doctors office and have been turned down for 3 jobs after interviewing in the last 8 months. There are benefits where I work, so I’m staying put for awhile. I beat myself up everyday for going back to school. I lost out on 2 years of memories with my kids because I went to school full time and worked full time. At this point it is the biggest regret in my life.
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