Is Grad School Worth the Money?

Tuesday, June 22, 2010 - 06:49 AM

The unemployment rate remains sky-high at almost 10 percent, and for 20 to 24-year-olds it’s 15 percent — ­ which makes graduate school attractive to recent college grads. Pretty tempting to just skip the terrible job market and stay in school! But before you head to grad school, it’s vital to consider the debt you’ll incur — and whether you’ll even get a better job out of it. Is grad school really worth the money?

1. Grad school seems like an easy way out. According to a recent survey by the National Association of Colleges and Employers, 27 percent of the class of 2010 will go to graduate school instead of entering the job market. And graduate school enrollment in 2009 was up 6 percent over the previous year, according to the Council of Graduate Schools.

2. …But don't assume it's an easy solution to unemployment. The average cost for a year’s graduate study is $37,300 for a master’s degree, and $50,200 for a professional program like law school, according to the latest numbers from the Department of Education. Those costs are rising faster than inflation – and almost everyone requires financial aid.

3. Not all degrees are created equal. If you want to be a doctor, medical school is a must. (Though you can save an average of $20,000 if you choose a public med school!) Yet not all other graduate degrees are required for advancement in the field, and in some fields a stable income is far from guaranteed. For example, if you take out $41,000 in loans (that’s two years at the maximum Stafford loan amount allowed per year) to help pay for a two-year journalism school program at an average $31,000 a year, it will take you 10 years of monthly payments of a whopping $472 to pay off your loans at the standard 6.8 percent. But the average journalist makes only $34,360 a year. Was school worth it?

4. Ask questions and be prepared. Research salary ranges in your area (try, and compare to your debt load, including what your monthly payments will be. (You can find a helpful loan calculator at Can you afford to go without a salary or with a diminished salary while you attend school? Talk to people in the field you’re considering to see what they advise. Do they consider their degree a good investment? When you’re ready to apply, apply for loans if you need them. Educate yourself about Stafford Loans – that’s where you’ll start, and most grad students can borrow up to $20,500 a year at a low 6.8% interest – and GradPLUS loans, and also about Income Based Repayment, a relatively new program that lets you make payments based on your income rather than your debt load. Go to and for more information, and to for the forms you’ll need to apply for federal loans.

5. Big picture: Education pays. Even in a down economy, the better-educated you are, the more you earn and the less likely you are to be unemployed. There’s a direct correlation. According to the Bureau of Labor Statistics, people with doctorate degrees have a miniscule 2.5% unemployment rate, and earn a whopping $1,542 a week. College graduates have 5.2% unemployment and earn $1,025 a week. And high-school grads have 9.7% unemployment and a weekly income of $626. The point is not to give up on a dream of an advanced degree – it’s to carefully consider costs before you go.


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    Comments [1]

    amy from paris

    I just emailed the same comment: I went to grad school in economic policy at Columbia U. and am in 6 figure debt. I wanted to get a job in finance to pay it off but that hasn't happened and I'm currently working at a large international org that pays next to nothing. I'll be in debt the rest of my life. Don't get a grad degree at Columbia unless it's law or an MBA.
    Otherwise you're looking at a life of indentured servitude to the loan companies.

    Jun. 22 2010 08:20 AM

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