Questions and decisions about money

Ask 5 Questions Before Borrowing Money for Graduate School

Consider factors such as future salary potential and career goals before taking the expensive grad school plunge. 

Questions and decisions about money

Attending graduate school can boost earning potential, but a high return on investment is not automatic and varies depending on a student's chosen school and program. 

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To go to grad school, or not to go to grad school. That question faces most college students and graduates – and answering it leaves many feeling like Hamlet’s poor court jester Yorick.

An advanced degree can bring a high future salary. I also had a friend who once described graduate school as "like college, but without the fun."

One thing did stay the same for her as a grad student, though: the debt.

Undergraduate students finish school owing an average of nearly $30,000. According to Kiplinger, those going for a master’s can expect to add $30,000 to that, a small amount compared with the extra $90,000 for someone pursuing a professional degree.  

Of course, taking on that debt makes sense for a lot of students, such as prospective doctors, likely because it’s necessary for their careers. However, if you don’t have to go to grad school, borrowing more money may be a bad idea. Here are five questions you can answer to help figure out if the extra borrowing makes sense for you. 

[Learn about the 2015 U.S. News Best Graduate School rankings.]

1. Are you passionate about your path? Grad school combines all the projects, studying and tests of college, often without all the parties, downtime and freedom you remember. That’s especially true if you plan to balance your degree with a part-time or full-time job

So ask yourself why you want to go to grad school. Is it because your friends are going, or because you’re trying to "find yourself"? Think about how those answers sound when you slap a $90,000 price tag on them.

You don’t want to borrow money and drop out a year later after realizing that graduate school is hard. If you take the debt, you want to come out of school with the matching degree. Being sure about your path will help make this happen.    

2. Will you earn more money afterward? In general, workers with advanced degrees earn more than their counterparts with high school or college educations. Unfortunately, what you actually earn after graduation will depend on your specific situation, such as the school you attend and program you pursue.

To help figure out how different programs could impact your earnings, check out this grad school salary estimator. It details the jobs and salaries of recent graduates from programs you’re considering. If their income isn't higher than what you could otherwise earn, borrowing more money may not make sense. 

[Get tips and information about paying for graduate school.]

3. When do you expect to break even on your investment? It's great to say that your future income will be greater after attending graduate school, but that's not the end of the conversation. 

You have to figure out how long it will take that extra income to cover your grad school expenses. Add up expenses like tuition, fees, textbooks, loans and interest. Don’t forget to include the income you’ll miss by being in school. Now, subtract any money you expect to get from grants, scholarships, teaching or otherwise. 

When you have that number, compare it with your potential income boost. If your schooling costs $90,000 and results in you earning $10,000 more per year, it will take nine years before your degree even starts paying off. Is it worth it to wait that long? 

4. Do you have to attend graduate school right now? That education will always be there for you, so what’s the rush? In fact, taking time off may help you figure out a career isn’t really for you. 

Think about working a few years to save up some money to go back to school. Even better, think about working at a company that helps cover your tuition costs or student loan payments. These options will cut back on the amount you have to borrow.

[Read additional articles on applying to graduate school.]

5. Have you considered all your options? When I was in college, a fellow student asked a professor about journalism grad programs. The professor’s response was that, "The real world is graduate school for a journalist." The point is that you can often do or learn what you want without a fancy grad school degree.

If you want to edit videos, find a class at your local community college or online. You could even get a book at the library.

You may feel like skipping out on an official degree may make your path to greatness longer. However, it could also make your path to getting out of debt shorter – and that’s pretty great, too.