Deciding to go to back to college to pursue an advanced degree can be as much a financial consideration as it can be a practical one. You'll probably take on some debt. But debt accumulation doesn't necessarily equate to reckless decision-making. On the contrary, it could be an important step to set yourself on a successful path forward, even though you may feel some anxiety start to build.
Median earnings for individuals with a master’s or doctoral degree are 16% and 41% higher than those in similar positions with only an undergraduate degree.[1] The potential to earn more may be a factor in the decision to pursue a post undergraduate degree, even if it may result in taking on debt to do so. Although you may be feeling some financial anxiety when exploring education options, having a financial plan for going back to school and setting smart goals could help ease those feelings.
So how do you do this? Here are some tips to get you started:
Tip 1: Pick a Graduate School You Can Afford
Just because a school may be more expensive than another doesn't always mean it has a better ranked program for your field of study. It depends on what your objectives are for your degree. For example, adjunct professors who want to attain a full-time teaching position at the college level typically need a doctoral degree. But it doesn’t have to come from a specific school, especially if the person has already established a working relationship with a college or university. So, it’s not a bad idea to take a broad look at the programs available to you both in-person and online and consider a more cost-effective option.
Tip 2: Explore Educational Assistance with Your Employer
The professional degree you want can help benefit your future, and in many cases, the company you’re already working for. After all, your new education could be used to help your company do things better than it does today. Assuming you don’t plan to shift careers and leave your job, additional education could increase your productivity. In turn, that could make educational assistance attractive to your employer. If your company doesn’t already have a tuition reimbursement program, you could consider starting the discussion. If you really like where you work, it’s even an option to agree to work for the employer for a set number of years before your tuition reimbursements fully vest.
Tip 3: Evaluate Loan Options Carefully
If you decide to apply for loans or use credit cards to help pay for an advanced degree, try to avoid interest rates that may be too high for your financial situation. If you have concerns about running out of federal aid and your salary isn't enough to cover the expense of school, research other aid options or consider private loans for graduate or professional students since these loans are designed to meet the financial demands of funding an advanced degree.
In addition to evaluating your options related to interest rates on any debt you take on, consider the repayment term for repaying the debt. The time frame for repaying the loan has an impact on the total cost since interest accrues. Also take into consideration any application or origination fees that may be charged on the loan.
Tip 4: Set Up Separate Checking and Savings Accounts
Consider having separate accounts just for school savings and expenses. You may have a lot of money coming in and out of personal accounts, so it will be difficult to keep a close eye on how new school expenses are impacting your balances. If you keep these separate, it will help you compartmentalize school expenses and formulate a plan that you are comfortable executing.
Paying for graduate school can make anyone anxious, but it can also be an incredible way to move yourself into a new career or a new opportunity. It’s never too late to return to school. And if you follow these tips, you may be able to do it efficiently and cost effectively.
