What are things to think about when paying for/taking out a loan for graduate school? [closed]

Question

I haven't seen a lot of posts related to graduate school in this SX, but I apologize if there are. I bolded the crux of my question.

I'll apply my situation to this question as an example:

1. I got a Bachelor's of Arts in something that's not particularly employable. I did take a handful of courses that make me slightly more employable.
2. I worked all throughout school. I came out graduating having paid >$20k (between my mother and me) in tuition thanks to Financial Aid and with a remaining >$5k loan to pay off (which I am confident I can pay off within the grace period).
3. I'm interested in some version of a Post-Bacc -> Master's Degree in something that's very easily employable (Applied Math, Computer Science, Business, or anything else that's employable).

I currently work a comfortable job with good benefits. The only reason I put this question out there is I'm interested in pursuing employment that's higher paying. I worry that without a graduate degree I won't be able to continually go for higher and higher paying jobs.

People always say it's worth it to spend $/take out a loan for an education because it's invaluable or will pay off in the end. But isn't this kind of thinking what's causing people to go into upwards of 140k in student loan debt? Aren't there always risks with debt/spending money? Shouldn't it be the same with education? I'm sure people there are people with a Master's Degree in A, B, or C that are easily employed today won't be in 10+ years. Is it worth it to take that risk? Or is there a way I can pursue jobs salaried at 100k without going to graduate school?

What I learned from going to college for an undergraduate degree was that it was really miserable feeling like: I had a price tag over my head that was something in the negatives because of the debt I was taking on, every day of my life was worth some -$ amount. It really ruined the whole learning part of it all? I'm interested in graduate school, but I am afraid I'll feel like this all over again.

EDIT:

I have created a separate question with a "facts-based" premise/prompt.

Answer 1

This is primarily opinion based but will answer some factual parts of your question.

Aren't there always risks with debt/spending money?

Of course. People plan all types of contingencies but there is always the "black swan" that they did not see coming. It is/was foolish for home buyers to fall for the mantra of "buy as much house as you can based on what the bank will lend you". The same thing for borrowing for education without regards to other factors.

that it was really miserable feeling like: I had a price tag over my head

That is kind of really good sense to have. Consumer spending is killing the average US household. Things like massive student loan debt, and car payments preclude one from being able to have an emergency fund (so they can cover emergencies with cash), and save for retirement. Keeping debt to a minimum will greatly increase your chances of financial success.

The list interests you state is quite diverse. I fear if you undertook a degree in one of those fields you might think that one of the others would have been better. Applied mathematics is very different then computer science, and both are very different then business. This is both in skills, temperament and the kind of work one will be doing.

In your case I would add the risk of not choosing a field, again, that you enjoy by taking out a loan to advance your education.

Alternatives to your plan:

You have a degree, you are employable in the fields you state. Get a job in one of those fields; or, do some of that work for your current company. If you try it out, and do not like it, try a different one. No real harm there. No looming debt over your head.

Once you settle on a field, and seem to enjoy, then consider advancing your education. Many employers will pay a healthy portion of your education that is job related. If you are making a good salary you can save up cash and pay the remainder without a loan.

In my opinion it would be unwise for you to pursue a master's given the situation you state. Pay off your existing loan, and seek ways to explore your areas of interest. You can even take some coursework for free from many online universities.

Answer 2

People always say it's worth it to spend $/take out a loan for an education because it's invaluable or will pay off in the end.

You are right to be skeptical of this advice.

But isn't this kind of thinking what's causing people to go into upwards of 140k in student loan debt?

Yes. 100% yes.

No matter the degree, it is generally the folks who overprioritize their career and work a lot that populate the upper end of the stated average income for people who have attained that particular degree. You need to be really honest with yourself about what sort of work you'll be actually willing to do once you graduate for the second time. Even at Yale law school (far and away recognized as the number one and most competitive law school), there will be an average income of graduates, and half of graduates will earn below the median, all of them will have spent an exorbitant amount of money for that piece of paper. The flip side of the coin is there will be graduates of University of Minnesota (#20 law school) who will out earn graduates of Yale.

I feel like its a horrible platitude, but, find something you actually like doing, and get better at it. Identify where you already spend your time, and just start digging a well there. There are absolutely situations where the degree is the minimum to even touch a doorknob. Generally, that world is really competitive. What degree you have, where it came from, matters. Is that the world you want to be in? Do you want to be in a persistently highly competitive situation where everyone around you went to overachiever universities to compete with other overachievers. Do you want to be in a state of permanent competition in applying theoretical math? Or did you see these subjects in some set of data that pairs annual income to education.

There was a book a couple of years ago called 'The Outliers' in which the author theorizes that it takes 10,000 hours to become an expert in a field. It's not likely you will come out of a masters program in anything as an expert in the field, and unless you are already tilted toward the field of education you are looking to pursue it's not likely you will ever be an expert in that field. I had a finance professor recommend that we at least read Barron's every week. A number of the students groaned at the suggestion. If you're not willing to immerse yourself in the field, you will likely never be successful in that field.

Warren Buffett reads financial statements for fun. A LOT of students went to finance class with Benjamin Graham, there's one Warren Buffett. A lot of students are going to high powered schools to learn math to program algorithms, some of them are already doing that for fun.

You are already ahead of the pack in terms of your allergy to debt and skepticism of the value of further education. Just makes sure that where you spend your time, is where you want to spend your time. A lot of people have degrees, in every degree, in every job, in every state 50% of people are below the median. The people above the median are paired to a degree in a field they likely would have spent their time on anyway. If you already like this field, you already pursue it in other ways, you want to dig deeper, then sure, take the loan and go do it. If you're looking for a field to juice your income, a technical school in something you like will likely grossly outperform a masters degree from a top university in a field you chose for money.

Answer 3

If you're paying for (out of savings or via a loan) a graduate degree in math or a related subject, rather than getting paid to do it, you're being conned. The norm for these kinds of programs (always apply as PhD-track even if you might not go beyond masters) is that you get funding through the institution in the form of teaching assistantships, research assistantships, stipends, etc.

So no, taking out a loan is absolutely not worth it, becausey you're paying for something that other are getting paid to do. Find an institution that will pay you to study instead.

Answer 4

The previous answers cover the most of your question. I will answer one specific question, not finance related.

"Or is there a way I can pursue jobs salaried at 100k without going to graduate school?"

Yes, this is possible, but you sill have a hard time reaching this. I made a career switch to software development without a single degree. It took me 5 years, one failed business and a lot of hard work to reach 60K a year. Things look very promising ATM. Friends of mine call it luck, but it all comes down to working your ass off for years.

On the other hand, I really wish I had a master in computer science. It opens up doors a lot easier and you will have a solid theoretical understanding of how stuff works. This is the absolute key to become an expert in your field. Currently, I am looking for a way to make this happen.

Answer 5

Just go to a less expensive college so you can minimize risk by minimizing investment costs. That will extend your grace period. You'll probably end up working at the university too so your bill shouldn't get too out of hand.

If you can, live at home while you do this. Another trick is to get a Masters at a college you can pay instate tuition for. Sometimes states have deals with other states allowing their residents to get instate tuition at certain colleges that may be outside of their state. If you don't have a local college, compare the cost of going to an online college with that of going to a local college. Make sure to include cost of living. You want the lest expensive competitive option available. I work in an office where everyone else has degrees and I can tell you that the only real differences a degree makes are that having a degree makes it easier to get your application past HR and having a degree will impress your employers and probably get your application to the top of the stack. Where you get it from won't impact that. Outside of those two things, experience and ability are always more important.

As far as earning potential goes, it's a lot higher with a master's degree. Think of it this way, a Masters is the new Bachelors. A lot of my educated friends hold the opinion that people without at least a Master's degree aren't educated. Do expect to make most of your extra money later in life. If you don't invest your earnings well, your additional earnings won't matter that much.

You also need to really do some market research on what you get a degree in. Make sure you have a good read on the higher paying jobs in the economy that will be around when you finish your degree.

Right now there's a "shortage" of programmers. The interesting thing about this "shortage" is that there are a lot of places trying to hire Senior programmers and Data Scientists at junior developer pay grades. A junior developer usually makes anywhere from $30k to $50k less than a Senior. Pay attention to stuff like that.

At the most basic level, education is investing in yourself. Treat it like every other long term financial investment.

Speaking of programming, you can go to a bootcamp to work in that field without getting a degree. A growing number of employers in that field care about what you can do and how you do it more than the degree you have. There are also certification programs and nano-degrees from places like udacity. I'm not sure how well these things will help you get past HR. I know some of these places have business degrees too.

Another thing you can do is try to get a Real Estate investing apprenticeship. A lot of hard money lenders I've been paying attention to talk about having some sort of apprenticeship program. People who are successful at this seem to make more than $100k a year.

Day trading is also something you can get into, but almost everyone who does that fails. It's a really hard skill to develop.

Answer 6

This is pretty opinion based but ways you can try to bring some facts into the equation is look at graduate programs you are interested in and get their employment statistics. Not all schools will provide this information but if you can find out what percent of people with a degree from specific graduate program earned after graduation you can start building a cost benefit analysis.

Lots of programs collect statistics around if a student was employed post graduation, what their salary was, etc. but not all publish that information. I have found those that do are likely more proud of their data and use it as a selling point.

You also need to figure out what you WANT to do. If you get a masters degree in computer science because the job prospects look fantastic but then find out you hate working in that field you aren't going to be too happy with your career (or taking on that debt).

Cliff notes:

• Figure out what you want to do for a living
• Find employment statistics from graduate programs that can help you get that type of job
• Using that data, along with cost to attend the program, determine what your break even will be when you also factor in not working or working part time during your studies