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GOING TO GRAD SCHOOL |
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Things to Consider Deciding whether or where to go to graduate school is a difficult decision. Figuring out how to pay for it is an even bigger challenge, especially if you’re deep in debt from your undergraduate studies. A threshold question is to ask yourself why you want to go to graduate school. Here are some common reasons why college students go on to graduate school:
Aside from asking yourself why you want to go to graduate school, you must answer these questions:
You should also decide if you have your heart set on one particular university or if any school will suffice.
Costs vs. Potential Rewards Costs: tuition& expenses The cost of graduate school may seem overwhelming. Tuition for one year of law school at a public university costs over $20,000 on average. It averages more than $30,000 per year at private universities. Medical school tuition is even higher. The cost of graduate school is more than just tuition and fees. You should also plan on the following expenses:
According to the College Board, the average cost of personal expenses at a four-year public college is $200 per month. Graduate students can anticipate spending at least that much for personal expenses. Costs: application Don’t forget about the cost of applying to graduate school. You’ll pay for:
If you apply to a number of graduate programs, the costs will add up quickly. Potential rewards According to the U.S. Census Bureau, there is a strong correlation between average annual and lifetime income and the amount of education you have. Here’s how the figures compare:
Remember, though, that your pursuit of a graduate degree may delay your entry into the workforce. By the time you get your degree, a classmate who found a job right after graduating college might have earned $100,000 or more and isn’t deeper in debt. Furthermore, if your undergraduate classmate invested some of those earnings, it may be a long while until you catch up financially. However, the lack of a graduate degree may limit your career choices; and, without a graduate degree, certain careers and levels of success may be unattainable.
Paying for Grad School There are three primary sources to pay for graduate school:
You will probably need loans, grants and scholarships to pay for graduate school. Financial aid may come from a number of sources including:
Loans In an ideal world, you would receive free money, which is financial aid that doesn’t need to be repaid. More than likely, however, you will be forced to borrow. Here are some questions to ask about loans for graduate school:
Even you pay a guarantee fee, you’re still liable for repaying the loan. There are also private lenders like Citigroup and MyRichUncle that offer competitive rates, but watch out for fees. Financial aid Some financial aid comes in the form of:
Generally, tuition benefits offered to graduate assistants are excluded from taxable income pursuant to section 117(d) of the Internal Revenue Code. Fellowships do not necessarily qualify for this tax break, since the individual may not be engaged in teaching or research activities. Salaries to graduate assistants are, however, subject to federal and state income taxes. Fellowships and scholarships are usually taxable if they exceed the cost of tuition and books. Working and going to school requires good time management. Be sure you evaluate the pay, hours, how they impact your study time, and whether these opportunities will further your career goals.
Working Full-Time Instead of delaying your career, you may wish to work full time and attend graduate school at night. For example, you could find a full-time job and pursue an MBA at night. There are a number of graduate programs that are designed for working professionals. You usually attend classes on specified evenings and Saturdays. Aside from the financial benefits, attending school while working offers other advantages such as:
Working while going to graduate school has disadvantages as well:
Some employers may not hire you if they think you’ll leave the job as soon as you get your degree. They also might believe your pursuit of a degree will infringe on their time.
Money Saving Tips You should create a realistic budget and cut corners wherever possible. Saving on rent If there’s a good school in your hometown, consider living at home. If you’ll be renting during graduate school, think about squeezing in an extra roommate. If your parents are interested in investing in real estate and a possible tax write-off, they might consider buying a house or small apartment building in the town where you’ll be attending graduate school. In exchange for free rent and a small salary, you can manage the building. Saving on textbooks Textbooks are a major expense associated with graduate school. The average grad student will pay $900 per year on textbooks with some costing $100 or more. If you can stand someone else’s notes in your textbook, consider buying used books. Make sure the edition you’re buying isn’t outdated. You may find less expensive new textbooks through Internet sources such as:
You can also look for online book swaps. As you look for ways to cut your expenses, don’t be afraid to think outside the box. The New York Times reported that cheap textbooks may be purchased from India. Frequently a foreign soft cover text is available as an alternative to the American hard cover version. You can find out the details by searching “Special Indian Editions” on the Internet. Going to school online Some well-known universities now offer online graduate school programs. The entrance requirements are comparable to onsite programs and there is usually no difference in the diploma you receive. Nevertheless, investigate whether the university’s online degree is viewed with the same respect as the school’s traditional degree.
On the down side, you miss out on the university atmosphere and interaction with professors and other students. Finding an inexpensive school Although you may want to go to the best school you can get into, it is wise to make affordability a key component of your graduate school search. After deciding on the graduate degree you wish to pursue, here are a few strategies to consider:
If you can’t find a quality school in your price range or the financial aid package isn’t what you expected, have a fallback position. You may need to consider other career and education options.
FAQs How do you invest for short-term goals like graduate school? When you invest for short-term goals, your time horizon usually precludes you from investing in the stock market. Stock investments are normally more appropriate when you’re investing for long-term goals. Instead of stocks, you should consider investing in:
To put away money for short-term goals, sign up to have money automatically deducted each month from your checking account. You’ll force yourself to save and invest. Is it worth incurring more debt to go to graduate school? When you pursue a graduate degree, there are no guarantees that you’ll have made a good investment of your time and money. You may not realize the income, personal satisfaction or career choices you expected. Above all, make sure you’re pursuing a graduate degree because it’s something you want to do and it’s not just to please your parents. Am I eligible for loan forgiveness? Under certain circumstances, your obligation to pay back a student loan may be forgiven.
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