Is Graduate School Worth More Student Loan Debt? Here’s How to Decide

An illustration depicts a graduate with a long shadow shaped like a dollar sign.
Getty Images

If it seems like everyone is heading back to get their master’s degree, it’s not just your imagination. 

Graduate school enrollment reached 4.1 million in 2018, an increase of 300,000 since 2011, according to the Census Bureau. Compare that to overall college enrollment, which declined by 1.5 million during the same period. 

And maybe a recent job loss has made the thought of going back to school more attractive, particularly with this challenging job market. 

But you’re old enough to know better than to use the argument “everyone else is doing it.” 

Instead, consider the cold, hard facts when deciding whether it’s worth going to graduate school.

Those with a graduate or professional degree earned an estimated $17,864 more per year than those who held a bachelor’s degree in 2018. That’s good.

But the average cumulative debt for those who earned a master’s degree was $50,300. That’s bad.

So how do you decide if graduate school is worth your time, effort and money? We’ve compiled this list of pros and cons to help you choose.

Do’s and Don’ts for Deciding if Graduate School Is Worth It

Check out these do’s and don’ts when deciding if graduate school is right for you and your financial future.

Don’t Go Because It’s Easier Than Finding a Job

If you lost your job and are having trouble finding another one, graduate school may seem like an easy answer — you can stop looking for a job, and you get additional education. 

But that shouldn’t be the beginning and end of your decision making.

“We see people that lose their jobs and they just say, ‘Well, I’m going to go back to school’ without a plan,” said Ryan Law, Accredited Financial Counselor and owner of Student Loan Planning. “They just figure, if I get more education that’s good.”

Pro Tip

A master’s degree can offer leadership and project management training. But if you have no interest in climbing the corporate ladder in your field, that diploma could lead to a job you don’t like.

When formulating your own plan, ask yourself these questions to help decide the ROI on an advanced degree:

  1. Do those with advanced degrees in your discipline do the type of work you are interested in?

  2. Are advanced degrees prevalent in your industry in the area you live in?

  3. Do you have the time and resources to dedicate to completing the program?

If you find that you aren’t interested in the results that a graduate program offers, but you’re also struggling to find a job, consider this the chance to explore other careers. That could include going back to school but also could mean applying for an apprenticeship or using side gigs to explore other interests while paying the bills.

Do Go if the Pay Increase Can Offset Time Away From a Job

Depending on the school and field of study, graduate student programs may require you to attend school full-time, meaning you’d have to quit or take a leave of absence from your current job. 

Factor in the missing income when making your decision — but the lapse in pay doesn’t necessarily make it a deal-breaker, according to Law.

“If you’re making $30,000 to $40,000 as an undergrad and you’re going to walk out with a degree making $60,000 or $70,000, then it’d be worth taking a year or two off and even taking out additional student loans to make up that difference in salary,” he said.

Don’t Go If You’re Taking on Too Much Debt for Your Degree

If you’ve done your homework, you should be able to map out your projected income compared to the amount of debt you’ll be taking on.

“Two different strategies I’ve seen: Don’t borrow more than you’re going to make your first year, and don’t borrow more than what the average salary is in that industry,” Law said. “The second one is probably a little more realistic.” 

Why? If someone is considering medical school, they could walk away with $200,000 worth of debt, which they won’t make as a first-year intern, but could potentially end up making that amount a few years down the road. 

If you need a little help finding salaries within your discipline, you can find a starting salary for a graduate from your college through the College Scorecard. And check with the Bureau of Labor Statistics Occupational Outlook Handbook for the national median pay within your profession. 

Do Go if You Have Sources of Funding Besides Loans

Just in case you didn’t learn this during undergrad: Student loans are not the only way to pay for a degree.

Start at your college financial aid office and your department to ask about potential fellowships — scholarships that are awarded based on the student’s potential to make a lasting contribution to their discipline.

But Law also recommended expanding your search for funding to organizations interested in advancing education and expertise in your field.
“Professional associations that you belong to may offer scholarships and fellowships — that’s an untapped market in a lot of cases,” he said. “Even [your] employer might have some tuition reimbursement.”

Don’t Go Before You’ve Researched the School’s Success Rate

Buyer beware.

Graduate programs are not all the same, and simply Googling “graduate school” will not necessarily produce the best results.

Law advised prospective students to be wary of for-profit schools. Some attempt to appeal to busy professionals by offering online graduate degrees, but the responsibility for researching whether their claims of success rates are true is landing increasingly on consumers.

Pro Tip

In the current environment, it pays to reach out to the financial aid office to ask about funding options — and to find out if the campus is open or if classes have moved online.

“School is a business, and they want to entice the best students,” he said. “But you need to talk to people who have graduated in that field.”

Ask the school for a list of alums who can talk to you about their experience. Also check out the companies where you would like to work after you get your diploma, and find out how many of them employ graduates of that college’s program.

Do Go If the College Offers Opportunities You Wouldn’t Get Elsewhere

Judging the value of a college isn’t limited to whether it has Ivy League status.

If you’re in a discipline that demands hands-on experience with the newest technology, like robotics or medical fields, you could get access to equipment at a research university that you may not get elsewhere. 

One way to find out if the school has the learning materials you need: Tour the school and ask to meet graduate students in the program you are interested in. Ask them what equipment or programs they use and how frequently they get access to hands-on experience.

Pro Tip

Many schools are currently only offering virtual tours of their campus, but you can still request video conference meetings with work-from-home professors and current students.

Additionally, graduate school may offer networking opportunities that you couldn’t get otherwise, including access to professors who can act as mentors and attending professional conferences where you can meet potential employers. 

When researching the institution, ask about alumni association events and networking opportunities within your program. 

The lasting impact of those connections could make that tassle worth the hassle — and the money.

Tiffany Wendeln Connors is a staff writer/editor at The Penny Hoarder. Read her bio and other work here, then catch her on Twitter @TiffanyWendeln.