Paying for college is always a challenge. But at least during your undergrad, you might have been young, living on campus, and with few outside obligations. Adults who go back to school for a further degree may have additional challenges. Can you afford to pay for another degree while you’re still paying off the first one? Do you have energy to work and learn at the same time? Going back to school can be a financial setback, but with the right planning, you can minimize the damage and keep up with your obligations.
How Will You Pay for School?
Depending on the type of program you’re considering, the cost of a graduate degree will vary considerably. A masters degree often takes two years to achieve, at an annual cost anywhere from $10,000 to $60,000 a year. This depends both on the school and on the program. If you want to get into law or medicine, it will likely cost more. And a doctorate, since it takes 4-8 years to complete, can cost twice to four times as much!
So your first money saving trick is to choose your college wisely. You don’t want a useless degree from a college with a bad reputation, like many online-only schools have. However, it also may not be worth your money to shell out for an Ivy League degree if the job you want doesn’t require one. Seek out a college with a good reputation, the type of program you’re looking for, and in-state tuition. An online degree may end up costing less, but do your research to make sure it’s from a real, accredited institution.
Next, seek out all the financial aid you can find. This can be more rare than aid for an undergraduate degree. You will fill out the FAFSA again, this time omitting your parents, as all graduate school applicants are considered independent. You may receive a grant or a work-study position.
You may also get help from your employer, if you intend to remain employed while studying. Talk to your employer about any educational assistance they might offer.
After that, you’ll finance your degree with your savings or money you earn as you go. Experts recommend not raiding your retirement account to pay for school—it will be too hard to make up that money later.
Financing Your Degree With Debt
Of course, borrowing money for your degree remains a common option. However, if you already have unpaid student debt from your bachelors, you’ll want to think twice. That can escalate your total debt to an even more unmanageable number. Add up the total debt you would have from all your loans combined—is it reasonable to think you could pay all of that off?
If you do decide to borrow, you have the option of public and private student loans. You apply for the public loans through your FAFSA. Direct subsidized loans aren’t an option for grad school, so your options are unsubsidized loans, which are available to everyone regardless of need, and grad PLUS loans, which rely on a good credit score. Unsubsidized loans come with limits, so you may not be able to borrow the full cost of your education.
Private loans tend to have higher interest rates and less leniency. You’ll need to be ready to make payments on your loans right away.
Remember the difference between good debt and bad debt: good debt will eventually pay for itself. Will your graduate degree pay for the immense cost of getting it? It depends a great deal on what you pay for it and how much it is likely to increase your income. If you’re in business, an MBA could very well pay off over your career. But a masters in fine arts (MFA) may not increase your income at all. It might enrich your life, but since it won’t pay for itself, you’ll need to draw in all the funding you can from elsewhere before considering going into debt.
Living Expenses During Grad School
The cost of tuition is only one of many expenses you’ll have to consider during grad school. You’ll also need to pay for any ongoing costs of your current life: rent, insurance, transportation, food, and so on. You may be able to cut your costs during grad school by paring back on non-essentials or moving to a smaller apartment. But if your life is less flexible—say, if you have children or own a home—you can’t expect to cut back very much this way.
So you’ll need an income stream during grad school. If you have a partner, talk to them about the possibility of going down to only their income. Are they willing to take on the whole task of supporting the family? Will they get a turn as well to follow their own dreams? If you plan to work your way through grad school, you’ll need to be realistic about your time and energy. You might need to take more than two years to finish a masters degree if you will also be working.
Make a realistic budget before you start based on your current expenses and expected income. If your expenses exceed your income, you’ll have to draw from savings or go into debt. Over the years of grad school, how much debt will you accumulate? Stacking up credit card debt can take years to solve, even if your degree increases your income.
Can You Afford It?
Once you’ve accounted for all the factors, you might start to wonder if you can afford grad school at all. Even if it’s your dream, it’s wise to approach it practically. See if the numbers add up. A financial advisor can help you be objective about this decision and show you options you may have overlooked. To meet the right advisor for you, contact us today.
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