Graduate schools see an upsurge in applications during recessions. This is in part from recent college graduates putting off having to throw their resume in the ring, and in part from older workers deciding a layoff or career slowdown is the impetus they need to finally follow through on a dream career. As a longtime advocate of education for its own sake, I would never try to dissuade someone from pursuing something he truly loved. But recession-inspired graduate school is kind of like eating when you’re bored. It ends up costing you a lot and you don’t necessarily have a great deal to show for it at the end.
Here are some things you might want to consider before you decide that graduate school is exactly where you need to be:
On average, graduate students finish their degrees with over $40,000 in student loan debt. If the job you land after school will provide you with a major change in salary that can make the cost of education worth it. But if there’s any possibility that your new degree will not necessarily translate into a better job – which can happen in any field, particularly if the recession continues – then you’ll simply have another monthly bill without a means of paying for it.
A good rule of thumb is to keep your student loan debt below the amount of your starting salary. (And if you already have an undergraduate student loan that you are paying off that must be factored in as well).
I was lucky when I went to grad school because Ohio State University happened to be literally down the street from my house. But for many students a return to school will also mean relocation. If you have never picked up your life to move to a new area you might be surprised to learn that the average cost of relocating a family is over $15,000. Unless the graduate school sought you out and you currently have the secret to the fountain of youth your school will not pay for your moving expenses. Additionally the cost of living may be higher in your new university’s town.
This is not a concern if you don’t have a job already. However, if you do have a job and simply wants to “upgrade” your career, you will have to replace your income during the time you are in school. While this is kind of a no-brainer it can be easy to get caught up in the excitement of going back to school and forget that in addition to paying for tuition and related school fees, you still need to keep a roof over your head and food in your belly.
When I got my Master’s degree in Education I focused so much on the intellectual aspect of being back to school that I didn’t allow myself to think about finances. I took out student loans for everything, including living expenses. (I did work a bookstore job while I was at school, but it netted very little income). There was no reason I should have been shocked at my final bill for returning to school for one year, but it still gave me a slight panic attack — seeing all at once how much you spend in a year including tuition can be frightening like that.
Even with all of these concerns to weigh you may decide that going back to school is what you need to do to make the next step in your career. But make sure you enter the next phase of education with your eyes open. Running away from the recession into the ivory tower will only prolong your financial pain.
Photo by Apuch.
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I'm just an average mom, trying to live a frugal life and get out of debt. I write about things that have (and haven't) worked to improve my family's financial situation. What works for me may or may not work for you, and you should always consult a financial advisor before making important financial decisions.
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