Calculating investment value of student debt and career choices

Question

I will be entering a Ph.D. program this coming fall. At some point, I will have to add to my current student debt. Nevertheless, it's a done deal and I am definitely going.

I (conservatively) estimate that I will be making about $20,000-$30,000 more a year than what my current education credentials can help me attain. This alone may make it a wise investment.

But, I was wondering about other aspects of this investment as well. For instance, if I am a university professor, my (future) children can attend the institution at which I work for free (or at significant discount). Granted, I may never replicate my species; and, if I do, my offspring may not attend the institution at which I am employed.

Thus, my question is the following: does one take into consideration aspects of an investment like the aforementioned?

Answer 1

I agree with much of what @Ek0nomik has stated, as I was going to say the same, but I will add one item that he did not and that is to say: you should also consider the value of the education for the sake of the education. While the education opens doors for better pay, prestige and so on, it always comes down to what value YOU see in it. Education for knowledge sake if you will.

Unfortunately in a world that such endeavors can cost an arm and a leg, I can see why my position would be unpopular. After all who cares about knowledge and education for education sake when it costs me a ton and I am on the hook to pay it back. Unless independently wealthy, that is a great consideration in whether or not to go that route.

In your case, if you plan on being a teacher, you can get much of your loans waived for your teaching service, so consider that and if not already familiar with that, make sure you look it up. Although I am only familiar with the US regulations on this, not sure where you are but I suspect some sort of similar consideration exists in some form everywhere. SO you can have your cake and eat it too, get the education/knowledge and also not end up paying forever for it.

I myself spent a decade and half in the corp and during all that time I got several degrees. Not saying this to be immodest or brag (just to highlight the point I am making) but I have BS in 4 subjects, BA in 2, MS in 2, AS in 1, PhD in 2, and a JD. That resulted in me having $68k in debt (I didn't borrow for everything, I worked for a lot of it) but as a teacher, researcher, and yes a soldier, I did have my debt reduced and if I keep teaching and counseling, my service will reduce it even further.

SO consider other benefits of having an education, not just the cost; but DO consider the cost before you commit to something that might bury you. Make sure you have a solid plan to move forward and preferably things that are tangibly connected to yourself and not possible offspring :)

Answer 2

It's certainly a great idea to consider all aspects of an investment, but there are certain variables that are too unpredictable to include in your "is it worth it" equation.

Your potential future children is a good example of a variable that is too unpredictable. Just like you note in your question, your children might go to a different university, or not at all.

I think the most important question to ask when evaluating an education investment is determining if the debt needed to attend university will pay off in a certain amount of time. How much time that is varies from person to person depending on job availability for your area of study, existing debt, wealth, lifestyle, etc.