If you’re thinking about getting a graduate degree, using student loans to cover some of the costs might have crossed your mind. It’s essential to carefully consider whether taking on debt for your education is a smart decision.
First, you need to assess the necessity of a graduate degree for your career. If the degree isn’t critical for your career success, accumulating debt for it might not be wise. Financial advisors generally don’t recommend taking on debt based on desires rather than needs.
### Career-Oriented Considerations
After completing your bachelor’s degree, you might have felt that a master’s degree was inevitable. In fields like psychology and social work, a master’s degree can boost your earning potential and offer better career prospects. For example, in 2013, the median starting salary for psychology graduates with a bachelor’s degree was $37,000, which increased to $48,200 for those with a master’s degree.
Most fields offer higher salaries to candidates with a master’s degree, but this isn’t always beneficial for several reasons. Firstly, having a master’s degree might actually limit your job opportunities. If you pursue your master’s right after your bachelor’s, you will be applying for entry-level roles. Some employers might see you as overqualified and skip your application. The higher degree could raise your minimum salary expectation but also reduce the number of positions for which you’re a serious contender.
On the other hand, if you’re already mid-way through your career, a master’s degree in areas like business and engineering could lead to more opportunities and a higher salary.
### Financing Your Education: Are Student Loans the Right Choice?
Once you determine that a graduate degree is necessary for your career, the next step is deciding if using student loans is practical. Research salary expectations for your intended master’s degree. Websites like Payscale can give you insights into salary ranges across different fields and regions. With this information, you can estimate the salary increase you might expect after getting your degree. You can also find more specific information through online searches.
For in-state residents at a public university, tuition could be around $5,000 per semester. For out-of-state residents or those attending private universities, the cost might be closer to $10,000.
Consider these costs when using online calculators to estimate your potential monthly student loan repayments, adjusting for variables like loan types, interest rates, and repayment terms. Remember, while a graduate degree could increase your salary, it might not translate to substantial take-home gains after taxes and retirement contributions. Make sure your degree doesn’t result in a monthly salary deficit compared to potential loan repayments.
### Exploring Other Options for Graduate School Financing
If you’re set on a master’s degree but student loans seem unfavorable, there are other options to consider.
#### Pay As You Go
Being a full-time student isn’t mandatory. If you have a stable full-time job, you could take evening classes and save up to pay for your tuition.
#### Scholarships and Grants
There are scholarships and grants available for postgraduate studies. Some opportunities cater specifically to certain demographics or fields.
#### School Support
Your chosen graduate school might offer financial aid, such as fellowships for full-time students that don’t require repayment. Research and teaching assistant roles might also waive some or all tuition costs.
#### Employer Reimbursements
In some cases, your employer might fund your graduate degree, seeing the value of a more educated workforce. Policies can vary and might require you to prove the degree’s relevance to your current role or a future position.
#### Hybrid
You’re not limited to one option for financing your education. Combining scholarships, employer support, and student loans might be a sensible approach.
In summary, if a graduate degree fits your career path, thoroughly research all available options before taking on student loans. Multiple paths can help you reach your goal while saving you money and reducing stress.