Apr 2, 2009

How Will I Pay for Grad School?

It has become increasingly clear to me that in order to pursue the career I want to have, I'll either need a miracle or a masters degree. I'm mostly looking forward to the latter, after all, my undergrad years were tainted by depression, self-doubt, immaturity, and academic confusion. It really is time for me to go back to school, focus on what I want professionally, and hopefully thrive.

The cost of thriving, however, is keeping me questioning if grad school is worth it. There's also plenty of other options that may work out just as well in the long run in terms of my professional life. I can take classes, read lots of books, teach myself, work my way up in the world. But I've done that with my current career and while it's been fun, I don't think I could stand to start from scratch entirely. The programs I'm looking at offer great connections and job prospects (esp if the economy starts picking up by the time I graduate. If it doesn't i'll prob be unemployed anyway.)

All that said, I am still freaked out about the cost of grad school. Sure, as of May I will likely have about $35k in savings, but that's for my retirement and emergency fund. School will cost me about $100k for two years if I count in the cost of living. I may be able to work part time to offset some of those costs, but still, even if I could get it down to just the cost of tuition (about $60k total) that's, like, double what I've been able to save in the past 25 years of my life. And I'll be losing upwards of $120k for two years that I would have made if I remained employed. So the whole thing would cost me $200k or more. Yikes!

Those numbers are enough to keep me out of grad school. I'm so jealous of my boyfriend, who is going to get a free ride to grad school, courtesy of his frugal mother who doesn't spend money on anything. So she's saved up enough for him. In a way I want to pay for myself because it will be worth more. I think my undergrad education felt like a free ride. My parents were paying, it was what I had to do, it wasn't for me, I didn't understand the value of an education in line with my professional development.

Do any of you have experience with 529 plans? They sound like they might be a good idea to start saving for grad school... if the market starts to go up. Esp if I can put in a lot of money now while we're in this recession (I feel really bad for the people who put money in before the recession and lost 30% or more). In California the tax savings on a 529 isn't that great... well you don't get a state tax deduction (same with the HSA) - but you do get the federal deduction. And the money you use for education can be spent tax free. I can't figure out if that's as good of a deal as it sounds.

Also, there is still the chance that there will be a miracle and I won't end up wanting to go to grad school at all. Then my 529 plan will be stuck. I can use it to fund my children's college education - but then I have to have kids. :)

I don't understand how anyone has the balls to go into debt for grad school. Not sure if I do.


dollarsforsense said...

Get a grad school to pay for you! It sounds like you have experience, and there should be a school or two out there that's willing to give you a fellowship or assistantship, if you're willing to move around to find it.

S said...

Don't forget about how your earning potential will go up once you have done some graduate work and then complete graduate school. So that 200k cost could be off set by that number (or so I would think). I did see your tweet yesterday about the 529 plan and thought it was an interesting idea. If you do not go to grad school and do not have kids, can you give the money to another relative (niece/nephew) to use on their education? Something to look up I suppose.

Fabulously Broke said...

Well.. S is right. Your earning potential will go up. And you DO need the MBA :( but it still isn't an easy # to swallow

Do you have any idea of salary expectations upon graduation? Then do a compounding interest/debt repayment chart to see how many years it would take to clear that $100-$200k in debt..

My ROI for these degrees is usually 4 years, but sometimes you gotta do what you gotta do.

MEG said...

What kind of grad school would you go for? Stats actually show that graduate degrees in certain subjects (liberal arts, English if I remember correctly...) can DECREASE your earning potential. That's right, those who went on to grad school end up earning LESS than those who didn't (probably because those poor idealists end up working for nonprofits, being public school teachers, and taking other low paying but meaningful work).

The only grad school I'd go into debt for is one that will certainly increase my income - medical school, law school, and MAYBE the MBA but even that is on shaky ground right now with the financial markets in turmoil and so many MBAs vying for spots (and at largely crumbling companies).

her every cent counts said...

@Fabulously Broke -- as I noted in my latest post comments, I'm not ness. looking at an MBA degree. Most likely I'd be looking at an MFA in Interaction Design. While a salary boost is a plus, it's not the main reason I'd be going to grad school. I'd more be looking to switch my career path. The field I'm in now pays fairly well ( $60k ) so it's tough to trade that in. Salaries in the field I'm looking at going into are probably more like $80k - which is a bump, but not by a huge amount given that in two years and a job change in my current field I may be able to obtain a salary close to that. Ultimately, I need more education in this field - whether that is a "grad degree" or a certificate or classes or reading a lot of books and taking on side projects until someone will pay me to do this, I don't know. It's such a new field and everyone seems to come at it from a different angle.

her every cent counts said...

@MEG -- see a lot of my comments above in my post to Fabulously Broke. I don't think this training would decrease my earning potential, but it's not like I'd be going for grad school to become a lawyer. I'd be hesitant to go to grad school in a field where I could graduate with no job prospects but even during this recession, I see that this field (interactive design) still has job openings.

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