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Making a Cost-Benefit-Analysis of Potential Grad School Debt


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Hello everyone! My name is Julius (25) and I’m currently a Peace Corps Volunteer serving in Ukraine and have just recently accepted into the graduate program of my dreams. However, I was a bit disheartened to learn that the financial assistance I was eligible for can, as a blanket policy, only account for up to 40% of tuition and now I am facing some serious loans. In the best case scenario, I’m looking at about $60-65K for 2.5 years of school. However, when taking cost of living into account, those loans could bump up to $90-100K (worst case scenario). The program is great and from a well-revered school (Middlebury Institute of International Studies) and the upside is I would be getting 2 degrees for the price of 1.25 (MPA and MA in International Trade and Economic Diplomacy). I am quite confident I could get a relatively well-paying job out of the gate (though, who knows, anything could happen) and know that it would give me an opportunity to pursue my passions/build my skill set. However, it is a lot of money in loans to face (especially as the interest – averaging 7% - could accrue). I’ve just been doing my own CBA and seeing if it makes sense and how it could potentially help OR hurt my goals in life and career thereafter.

So my general question is has anybody had any experience with student loans and what advice could you give in looking at weighing the pros and cons of financing higher education with those financial aims in mind?

Thanks a lot and I wish you all a wonderful holiday season! 


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There's a few questions you have to ask yourself:

1. What is the average starting salary for someone with this degree? Also, what is the average salary for a more experienced individual within this career trajectory?

2. What percentage of graduates at this program have found relevant jobs right out of the program? What are their salaries like?

3. You say this is a well revered school. Is there an equivalent program with similar opportunities at a less expensive school, maybe a state school? It looks like this program is in an incredibly high cost of living area. 

4. Do you need this degree to get the type of job you want? 

5. Are you able to work while in school to limit the amount of student loans you need to take out for living expenses?

6. Can you cut costs with living expenses, such as living with roommates, eating at home, etc.?

7. How much debt do you have from undergrad, if any? This should be included in your total debt cost.

8. What are your other life goals? If you are saddled with $100k of debt and start out at $50k a year, owning a home or starting a family may be difficult to achieve for some time. 

These are just a few questions off the top of my head. I knew that I personally could not stomach a lot of debt so I did my BA and MA at a very cheap state school with cheap tuition and worked full time for living costs, and now I'm also on track to not accrue any loans during my doctorate. I have a personal rule against taking out student loans for non-tuition based expenses. However, everyone is different. I know people that took out more loans and they are equally as happy. It really depends a lot on your own personal outlook and the feasibility of paying off the debt. I don't know anything about your field, so I can't speculate. However, if for example, someone accumulates $150k in total student loan debt and those in their field typically max out at $75k a year, then that may not be a smart investment. You also always want to look at the average incomes, or even modal incomes if you can find them. There will always be those 3 people in the field who make an exorbitant amount of money within the field. You don't want to look at those outliers, but what the majority of people are making. 

Edited by Hk328
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Three years down the road from a very expensive MPH (~$100,000 in debt), I still don't have a good answer for this kind of question. Here are some things to consider:

  • What would your life look like without this degree? Could you work your way up based on your current experience and connections in the field?
  • How much does the ranking of the program really matter to job outcomes? Identify some less expensive programs and compare the career trajectories of alumns from these programs versus your dream program. (My MPH was from a top 10 program, and I don't feel like it helped me all that much on the job market, to be honest.)
  • Figure out the median salary students make coming out of the program and use it to build a budget. Figure out how much you'll have to pay in taxes and what your student loan payments would be. Think about how much you'll want to save for retirement. Ask friends or family with salaried jobs how much they pay for health insurance and other benefits, and take an average. Then consider whether you could be happy living in a relatively high cost-of-living area with whatever is left over. (I suggest this because ~$50K per year sounded like a lot when I was a college student making ~$25K working full time in the midwest. It felt like a lot less when I ended up in a large, coastal city after graduation and had to turn it into a monthly budget.) 

And three things I wish I had known:

  • A masters degree doesn't always add that much to a relevant bachelors degree plus some work experience. At the firm I worked at between my MPH and my PhD, employees who came in with a masters and employees who came in with a bachelors were doing similar work and making similar pay within 2-3 years (around the time it takes to do a masters degree). There were limited opportunities for them to move up, but there were also opportunities for them to go back to school part-time and get it paid for.
  • When considering how a program will benefit you, focus on hard skills rather than knowledge. You can read books and attend conferences to gain subject-matter-knowledge. Skills and experience are what make you marketable.
  • Don't assume you'll be able to take advantage of the public service loan forgiveness programs. I went into my MPH assuming I would make 10 years of income-based programs and get the rest forgiven, but the first cohort of students to apply has had miserable rates of acceptance, even if they certified their work experience as they went. (Here's a terrifying Slate article about it! https://slate.com/business/2018/09/public-service-loan-forgiveness-program-applicant-rejections.html) (Ironically, part of my cost-benefit analysis for going back for a PhD is that I could do it without adding to my student debt and would become eligible for an NIH loan-forgiveness program that requires a doctoral degree.)

I would also be skeptical of the value-add of a second masters degree unless it added a very specific, high-demand skill or experience. If you can do just the MPA for less money, I'd pick that option.

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