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Graduate School: The Questionable Investment

While graduate school can lead to higher future earnings, is the cost and time worth it?
Is grad school as valuable as an undergrad degree?

Is graduate school truly worth its insane price tag? Over the last couple of decades, an undergraduate degree went from an achievement that made you stand out of a crowd to a certificate that isn’t enough for a successful career. Many young adults are looking at graduate school as an option to consider. More than 700,000 students a year graduate with a master’s degree. With the number of students attending grad school on the rise, is the benefit of a getting a graduate degree worth it?


How much is grad school worth to you?

Graduate school costs much more than just tuition. What sets graduate school apart from undergrad is the money you won’t be making if you stayed out of school. To break down how much money you will lose in a year while attending grad school, you need to add up the loss of potential income, cost of tuition and overall living costs. In a survey done by Korn Ferry that took 310,000 entry-level positions in more than 1,000 companies showed that the average starting salary is $50,556. So let’s say your potential graduate programs tuition is $40,000 a year, which is the average cost of an MBA program. Then you have throw in the average cost of living while at college, which is around $15,000.  Calculating all that together, you’ll have an overall gross loss of $105,556 a year because of  graduate school.

To cover the costs, many graduate students turn to loans. If you’re planning on taking out a loan to help pay for tuition and living, a key rule is to to not borrow more than your expected salary. If you take out too much, you could be in financial ruin for decades. Going to graduate school is an expensive decision. But it might be beneficial if you do your research on your specific career path.


Prestige versus affordability  

If you do decide that graduate school is a worthy investment, what school do you choose? With programs varying from $30,000 to $120,000, you have to see if there is a graduate program that is a financially good decision for your career path. Does prestige matter in your field? Why would you spend $120,000 on a graduate program when you can just pay $30,000 for the same degree? Well, it all comes down to how much your potential employers care about where you came from. For example, if you’re looking to have a job at a top-of-the-line financial company, some have suggested to consider going to a pregisitous school over a cheaper program. That being said, there is a lot of evidence to support that most employers generally don’t care about where you’re from. Overall, you don’t want to spend thousands of more dollars you don’t have just to go to a school that might be more “highly regarded.”. It’s what you do while you’re at school that defines you professionally, not the school you went to.   



Graduate school is expensive. Especially if you don’t do your research and pay for a program that costs way more than your starting salary. There are still some ways to save money on graduate school. You can start your graduate courses while you’re finishing up your undergraduate degree or work for a company that pays for your graduate degree down the road. Graduate school, like college, is an investment. You need to see if the reward is worth the time lost working.  It’s also important to remember that if you do end up with a higher earning job and you went to a school that cost less than your yearly salary you will be able to pay off your loans within a couple of a years. Graduate school can be an amazing experience where you can learn and earn yourself a higher income. But make sure the cost doesn’t outweigh the benefits.

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