Grad School: A Worthwhile Investment?

By: Jan Paul Ferrer

 

Median earnings for US workers with a graduate or professional degree are nearly one-third greater than for workers with a Bachelor’s degree.1 It comes at a price, however. The average graduate degree costs anywhere between $30,000 and $120,000, depending on the university and the program.2 Keep in mind that this estimate excludes additional living expenses such as housing, food, and health insurance.

Even if you take the financials out of the picture, there are opportunity costs to consider. Choosing to dedicate 2+ years of your life to pursuing a secondary (or tertiary) degree is not a decision that should be taken lightly. Before you or a loved one commits to graduate school, you may ask yourself the following four questions to help determine if it’s a worthwhile investment.

1. Why are you considering a graduate degree?

For certain jobs, a graduate degree is required (lawyer, doctor, etc.). For others, it may be additive or have the potential to significantly accelerate your growth trajectory. Look up the educational background of people who currently have your dream job and talk to people you know in your field of choice to get feedback on the importance and professional value of a graduate degree. Keep in mind that in some industries, the conventional wisdom may be changing over time.

If applicable, it can be useful to sit down with your existing employer or HR department to better understand the pros and cons of your current career. This is also an opportunity to ask about any potential company benefits regarding employee education.

If you are still on the fence, consider making a list of all the opportunities that graduate school may provide and highlight those you feel would be most impactful for your career. One potential benefit that is often overlooked is the relationships and contacts you develop in school – these may prove to be critical for your long-term professional development and advancement. Next, explore whether there are alternative channels to access those opportunities including online education courses or local certification programs.

2. Are you financially ready for grad school?

When it comes to funding your degree, you may want to consider several options (or combinations thereof). Primary funding sources can include personal savings, employer help, scholarships or grants, loans from family or friends, and student loans. Before choosing any one of these, talk to a Financial Advisor to understand the implications of each.

Creating a grad school budget can help you set expectations and help ensure your financial stability during and after school.

3. When should you go to grad school?

Timing can be everything. If a graduate degree is not required for your next career step, it can be incredibly valuable to get some on the- job training before heading back to school. This can also allow you to build up the necessary savings in the event you will be responsible for funding your schooling. If you know a graduate degree is required for your dream career, enrolling immediately after college may allow you to maintain momentum. If you are considering starting a business, graduate school can be a strategic way to find a business partner, leverage on-campus resources, or access certain funding opportunities that are only available to students.

4. What type of degree should you pursue?

Full-Time Vs. Part-Time:

Part-time programs can include evening or weekend courses as well as supplemental online modules, providing you with the flexibility to balance work and school if desired. On the other hand, the benefit of being at school full-time is that you will be able to take full advantage of networking events and on-campus activities as well as other opportunities such as a teaching assistant role.

Whether or not to pursue a graduate degree ultimately comes down to a personal choice. However, with an increasing number of viable alternatives and rising tuition fees, it’s important to weigh the costs (financial and otherwise) against the potential return on investment. As you consider graduate school, a Financial Advisor can help you make a decision that takes into consideration the many factors involved in this significant investment in your future.

Footnotes

1 U.S. Census Bureau, 2012- 2016 American Community Survey 5-Year Estimates (Released Dec. 2017) 2 FinAid.org Disclosures Article by Morgan Stanley and provided courtesy of Morgan Stanley Financial Advisor. Jan Paul C. Ferrer is a Financial Advisor in Chicago, IL at Morgan Stanley Smith Barney LLC (“Morgan Stanley”). He can be reached by email at janpaul.ferrer@ morganstanley.com or by telephone at 312 312-419-3535 This article has been prepared for informational purposes only. The information and data in the article has been obtained from sources outside of Morgan Stanley. Morgan Stanley makes no representations or guarantees as to the accuracy or completeness of the information or data from sources outside of Morgan Stanley. It does not provide individually tailored investment advice and has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. The strategies and/or investments discussed in this article may not be suitable for all investors. Morgan Stanley recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a Financial Advisor. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.

Jan Paul C. Ferrer.may only transact business, follow-up with individualized responses, or render personalized investment advice for compensation, in states where [he/she] is registered or excluded or exempted from registration, http://www.morganstanleyfa. com/ferrer.

© 2018 Morgan Stanley Smith Barney LLC. Member SIPC. CRC 2160713 07/2018