Should I Go To Grad School?

Posted by Jill on September 14, 2011

When I finished undergrad, I knew I would be looking for a job instead of thinking about more school. There just wasn’t anything I was interested in enough to warrant 1-2 years or more focusing on one specific topic. In addition, even my 21-year-old pre-personal finance nerd self knew that I didn’t want to take out student loans to finance a graduate degree…especially before I had earned even a dollar of “real” income.

As it turns out, not continuing with school was a better decision than I could have ever known. Graduating and looking for a job in 2007 instead of 2008 or 2009 meant that I was looking at a time when entry-level jobs were plentiful. I’ve been thankful for the fact that I knew what I would be doing well in advance of graduation – and for the first couple of years, I didn’t really regret deferring an advanced degree.

Fast forward four years and I have the learning bug. I miss the stimulation of professors, the joy of being in a room full of motivated people, the excitement and promise of a new semester. In the back of my head I did always think I would go back to school at some point. Years ago, a college degree was enough to set you apart from people your age. These days, undergraduate degrees are more plentiful than ever, and advanced degrees are almost required for some of the best jobs. Plus (if I’m being really honest)…I’m just a little bit jealous when Facebook brings news of yet another friend/colleague/former classmate who has made the choice to go back to school.

So…I’ve been thinking about going back to school.

Making the Money Work

While I’d like to think I do a pretty good job of saving and investing, even thinking about going back to school is a little overwhelming from a financial standpoint. If I go full-time, I’d most likely need to quit my job and lose nearly all of my income. If I go part-time, I’d still probably have to cut back hours and thus lose some of my income – plus I’d be prolonging the number of years of school spending.

Spending more while earning less. Well Heeled wrote recently about living on 50% of her usual income because of deciding to go back to school, and how it’s impacting her decisions on other life events, like her honeymoon. And that’s the problem with REALLY big life decisions – they often require you to spend more than usual at the precise time you’re earning less than usual. Going back to school is one example, but people find themselves in similar circumstances when they want to take time off to travel, or become a stay-at-home parent, or make a cross-country move (unless you’re really lucky and get to keep your job, like me!).

Student loans. When it comes to paying for school, most people are nearly forced to take out student loans to cover the cost. Scholarships/grants for graduate programs are much less plentiful than those for either undergraduate or doctoral students. Some combination of lower salaries, higher expenses, lifestyle inflation and ever-expanding savings goals means most people don’t have the cash to pay for both tuition and living expenses out of savings, especially if they’ve been working for only a few years. Those who have worked for more years may have a little more of a cushion – but may also have mortgages, children, and other things that I still consider  “grown-up expenses.” 

Tapping retirement accounts. One funding option I do have is to tap into my retirement accounts.  Canada has a pretty neat system where you can borrow from your retirement accounts for school, and pay yourself back over time – but unfortunately I’m not in Canada! I’ve been diligently saving in a Roth IRA since my first paycheck, and education is one of the things that allows you to take a tax-free Roth IRA withdrawal. But of course using retirement savings now means it’s not available later…and it seems wrong to withdraw from my retirement funds during a time when I won’t be able to contribute to them.

Should I Go Back to School?

The bottom line is, going back to school will have a major impact on my finances, even if I go in-state, continue living at home to save money, and do the very best I can to cut other expenses. So…what’s a girl to do? I’d love to go back to school, but don’t want to take on a huge debt load. I’m not sure I want to use my savings and sacrifice other goals like buying a house… plus my savings wouldn’t go very far if I did a full-time 2+ year program. And I generally think that raiding retirement accounts for anything other than retirement or a TRUE emergency is a pretty bad idea.

What would you do?

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Comments to Should I Go To Grad School?

  1. Do you receive any type of financial assistance through your employer? Could you find a job that helps pay for school? My advanced degree was covered 100% by my employer, (a rarity these days), but any amount your company would be willing to cover would help you out. If I had to pay entirely on my own I’m not sure I would have pursued a higher degree. However, I can say it’s helped greatly in searching for new work!

    One Frugal Girl

    • My employer does offer some financial assistance, but not really enough to make it worth it – I would owe them 3 years of service after I finished my last class, and I would have to remain a full-time employee while in school which would mean I would be a part-time student…and THAT would mean that it would take me 3 years to finish a Masters and 4 to finish law school, which is something I’ve been thinking about. And all of that combined would mean I would be working for my current employer for at least 6 more years…but if I’m going to do that, I don’t really need an advanced degreee. So it’s kind of circular. Also the most they pay is 80% of certain classes – each class has to be approved on its own, they won’t pay for a blanket program. And I would say that less than 50% of the classes I would take would be relevant to my job, so I would at most get 80% of 50% paid for – not all that great for owing them so much time afterwards, IMO.

      I could try to find another job that pays for school – but that would mean that I probably couldn’t start classes for at least two more years, which seems like a long time. But I have certainly thought about it. Obviously delaying 1-2 years would be worth it to get it free or close to it!


      • I’m in a very similar position. I’ve been working for a few years, and I just started taking graduate classes while working full-time. My employer allows me to take one class per quarter (four per year) which means it’ll take me between three and four years to complete. I’m ok with that.

        For me the decision was easy: Getting a Master’s degree is a life goal. Time, money, and career advancement did not play a factor into my decision, but thankfully I’m in my mid 20’s (I have time/few obligations), money (my employer pays $10k per year towards education), and the knowledge gained with help with my job regardless of any career advancement.

        My advice is to take it slowly and do it while working full-time. Either pay for it yourself without owing any time to your employer (probably not the smartest idea money-wise,) or find a place where you could see yourself working at for the next 5+ years. Then the time commitment is irrelevant.


  2. In your situation, you should definitely make plans to get an advanced degree. Personal finance is an area where an advanced degree will open up a lot of doors, and you not only are willing to do the work but you want to. The only decisions are full-time vs. part time, now vs. later. I think the key is looking at the job you have now and the job you want when you graduate.


    • Thanks Tricia. I agree that full vs part time and now vs later are the big choices – it basically comes to when do I want to make the financial leap, and do I want it to be less money for more years or more money for fewer years.

      Definitely if I look at the job I have vs the job I want, another degree would be helpful. The thing that stops me from just doing it right away is that the job I have probably pays more than the job I want – even if I do go back to school before pursuing the job I want. So leaving a good job to pay lots of money to go back to school and then make less money after is a hard pill to swallow…but I know I would be happier. Decisions, decisions :).


  3. Jill,
    Going to grad school was one of the best decisions I ever made!

    I had a scholarship that covered tuition, but as far as the money I didn’t earn from taking off work to pursue the degree… I more than made up for it when I finished and took a much higher paying job (almost double what I made with just my undergrad degree).

    But even more importantly, the things I learned were of course… priceless! Good luck!


  4. Jill,
    I by no means know everything,and you have to make up your own mind. But, the way our economy is heading, and the fact that our government is broke and facing not being able to borrow money (having to live within it’s means), is scary. If you have a good job, I might hesitate to put it in jeopardy to go back to school. From all I hear, jobs are going to get increasingly scarce. I think I would pour myself into my present job, make myself as valuable as possible, so when the cutbacks do start coming, you would have a better chance to hang in there. Also, I am hearing that now people need to stockpile cash, for hard times that are surely coming. If times were better, I would say go for the schooling. But not now.


  5. I just stumbled over here from FMF, and am having the same dilemma myself. I would love to go back to school and get an advanced degree, but it likely means living at home for longer than I’d like and sacrificing some other goals. I’m just not sure it’s worth it right now. I can’t wait to hear your decision!


  6. It depends on the kind of job you want, but public service jobs (law-related included) now are eligible for loan forgiveness after 10 years. If you are considering a career in public service (which it sounds like you might be given that you’d make less money after getting your degree), definitely look into that option. I will likely not end up paying back the full amount I borrowed due to this great legislation!

    Caveat: who knows where the legislation will be in 10-20 years. Still, it’s great — and there are several loan repayment plans that qualify for later forgiveness and allow you to get reduced payments in the meantime in case that is needed.

    Though I ended up with a considerable amount of debt, and I also make less now than I did before I got my Masters, I don’t regret going back to school one bit. It’s important to invest in yourself, and I believe it will pay off loads in the long run in satisfaction, fulfillment, and career options.


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