I've recently been accepted to a masters program through a not-for-profit that partners with a university. I'm attempting to measure the value of the cost against my expected increase in earnings (and temporary decrease).

Since I will be working for a state agency in either situation my future earnings are very predictable.

I currently make 49.3k with a max of 54.3k in four years. Salary Schedule

During the first year of the program I'll receive a stipend of 20k. The Second year I'll work as a first-year uncredentialed teacher at 36k. And from there I'll start at 50k with a max of 72k over the next 12 years. Salary Schedule

If I complete the first year of the program I'll receive a 6.5k grant. If I sign-up for and work in a low-income school for another 2 years after my program I can receive another 8k grant. The cost of the program is 40k and my interest rate is 6%.

Cost of living adjustment is 0.0%-2.5% per year for both jobs at equivalent rates depending on the state of the economy.

I'd like to know what the equation would look like to measure the length of time before my new earnings exceed the cost of transition away from my current.

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    I'm not sure there is a "correct" answer because I know people with MS/PhD who are unemployed, and people with Associates who are making 6 figures...
    – Michael
    Commented May 10, 2017 at 17:02
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    Michael I gave the earnings for the current position and future position. I don't want anyone assuming what my projected earnings will be, I gave them. I want to learn the best calculation for estimating the earnings comparison overtime based on the information I've supplied. Commented May 10, 2017 at 17:11
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    Michael. I've given you a salary schedule from an employer. It directly correlates salary with education. In fact, it's a causation. Of course the economy could crash, it could also soar. A meteor couls destroy the earth or give us all laser eyes. Assumptions are best left elsewhere. How do you think financial decisions are made if we're constantly paralyzed by what ifs? Why by a home if an earthquake could make the property useless? Commented May 10, 2017 at 17:26
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    It won't stay 54.3k though, right? There will be cost of living raises beyond that? Is the total cost 40k, so your loan amount would be that less the grants, or did you already subtract the grant money?
    – Hart CO
    Commented May 10, 2017 at 17:45
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    It's relevant if the COLA increases are percentages instead of fixed amounts.
    – Hart CO
    Commented May 10, 2017 at 17:49

3 Answers 3


I wasn't 100% on which columns of the scale you were referring to, but think I captured the correct ones in this comparison, using the scale for BA and MA (MA scale starting 2 years later, with decreased income reflected for first two years), applying a 1% cost of living increase each year to the scale or to prior year after the scale maxes out and assuming you borrow 40k and repay years 3-10, then the difference and cumulative difference between each scenario:

BA_MA Comparison

So it would be about 16 years to start coming out ahead, but this doesn't account for the tax deduction of student loan interest.

Some things in favor of borrowing for a MA, there are loan forgiveness programs for teachers, you might only make 5-years of minimum payments before having the remainder forgiven if you qualify for one of those programs. Not sure how retirement works for teachers in WA, but in some states you can get close to your maximum salary each year in retirement. Additionally, you can deduct student loan interest without itemizing your tax return, so that helps with the cost of the debt.

Edit: I used a simple student loan calculator, if you financed the full 40k at 6% you'd be looking at $444 monthly payments for 10 years, or $5,328/year (not calculating the tax deduction for loan interest).

  • If I'm reading this correctly it would take thirteen years for the masters to be profitable? Commented May 10, 2017 at 18:41
  • Yep, and that's if you didn't borrow to pay for the program.
    – Hart CO
    Commented May 10, 2017 at 18:45
  • Brutal. Love it. Thank you. Not going to bother waiting to see if someone wants to work out the borrowing portion. It's obvious that'll add significant time. Commented May 10, 2017 at 18:47
  • I don;t see where you're incorporating the $40k coswt of the masters into your schedule. Also I was assuming the salary schedule included the 2.5% COL increases (since that's the rough increase each year); if so you are double-counting that.
    – D Stanley
    Commented May 10, 2017 at 19:06
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    If you're assuming borrowing the money then you also need to add in loan payments. With loan interest the payoff will be more than 30 years since the payments ($3k/year) will be more than the salary increase. I wouldn't be so critical except that yours was the accepted answer so I'd want to make sure it's correct. Even with loan forgiveness after 5 years I get a payback period of about 20 years (and you're locked into that job for at least 5 years whether you enjoy it or not)
    – D Stanley
    Commented May 10, 2017 at 19:17

I am a bit unsure of why the interest rate is relevant. Are you intending on borrowing the money to go to school? If you cannot pay cash, then it is very likely a bad idea. Many people are overcome by events when seeking higher education and such a loan on a such a salary could devastate you financially.

So I find the cost of the program as a total of 76.6K counting a loss in salary during the program and the first year grant. That is a lot of money, do you intend to borrow that much? Especially when you consider that your salary, after you graduate, will be about equal to where you are now. For that reason I am leaning toward a no, even if you had the cash in hand to do so.

There is nothing to say that you will enjoy teaching. Furthermore teaching in low income school is more challenging.

All that said, is there a way you can raise your income without going back to school? Washington state can be a very expensive place to live and is one of the reason why I left. I am a WWU alumni (Go Vikings!). Could you cash flow a part time program instead?

I would give this a sound no, YMMV.

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    This is what I like to see. The interest is relevant because I need loans to cover the 40,000. I don't need to borrow the total difference between salary and cost of program. I've lived on far less than 20k in a major city. It's only represented as an opportunity cost. I've worked in a low income school before and enjoyed it immensely. Commented May 10, 2017 at 17:30
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    I am still a No as you will have to borrow the money. All that being said, the decision is yours. This weekend I spent time with a couple where they borrowed to fund a Nurse Practitioner education at a state school. Due to some health issues her finishing will be delayed one year. It could end up bankrupting them in their own words. Debt has stung me, and many that I know in unexpected ways.
    – Pete B.
    Commented May 10, 2017 at 17:34

Just looking at your question I can tell it's not worth it financially, even if you didn't borrow the money to do it.

At your current rate, you'll be making 54,384 in 5 years, which is roughly a growth of 2.5% per year. If you go for the masters, in 5 years you'll be making 55,680, with roughly the same growth rate (2.5%).

So it's costing you $70,000 (the cost of school plus the 2 years of reduced income) to raise your salary by $1,300. The payback period would be about 25 years. It would be MUCH worse if you borrowed the money to do it.

Not a chance.

  • I see where you went wrong, you forgot the raises based on experience, which end in 4 more years with the BS but continue for 12 with the MS.
    – Ben Voigt
    Commented May 11, 2017 at 23:06

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