Should you go into debt to pay for graduate school? A reader named Shana recently wrote in with the following question about taking on student loans to further her education and set up a future career in counseling:
I recently graduated from college with a B.S. in Psychology. I have no student loans. I have $4,600 in credit card debt. I also have $2,500 loan on a motorcycle, but my dad bought it from me and is making the monthly payment of $114.00. With the economy the way it is, however, I may have to take it back. I have no rent payment since I live at home, but I also don’t have a job right now, so finances are tight.
I’m looking at going to graduate school to become a licensed counselor, but I’m really wrestling with this decision. My dream is to go to graduate school, and considering all my gifts and passions, as well as my desire to continue learning, this school in particular is perfect. However, my finances are in rough shape, and I’d have to take out $60,000 in loans to go to this school — and counselors don’t get paid a whole lot.
In short, this school would be a great experience, but then I would owe all this money, and it would just weigh over me like a stack of bricks. There is another program in England where I could go to for three months to learn, read, grow, get to know people in a community setting, etc. I’m really torn over this decision. My heart is drawn toward this grad school, but I can’t ignore the possible impact on my finances.
I’ve edited this for brevity, but it’s clear from what she wrote that Shana is strongly drawn toward a graduate education, and to this school in particular.
Scholarships and grants
I would start by asking whether you have done any research into the types of scholarships and/or grants that are available to someone in your position? I’m willing to bet that a little digging could produce some great results.
By the sounds of it, neither you nor your family are wealthy, so there’s a good chance you would qualify for grant money or a scholarship of some sort. Be sure to do your homework in this area.
Work your way through graduate school
You said that you are currently unemployed. What if you were to go to graduate school part-time while working? Robert Espe, a staff writer over at Debt Free Adventure, worked his way through school without taking on any education loan debt… Robert is but one of many who go this route, so it’s definitely possible to make it work.
Career salary and education debt
Another important point to consider is whether or not your aspiring career will pay a salary commensurate with the cost of the debt you are about to incur.
You mention wanting to be a counselor, and express some concern over the earning potential of this sort of position. The salary ranges for counseling positions differ quite a bit. For example, according to salary.com, the U.S. national average salary for a Licensed Professional Counselor is $35,000/year, for Academic Advisors the average is slightly higher at $40,000/year, and Chemical Dependency Counselors average an even higher amount of $46,000/year.
To help put this in context, my wife is a school counselor with a graduate degree. After graduation, she secured a position with compensation in the high $30k/year range. Eight years out of graduate school she still owes over $34,000 on her education loans and has been paying the entire time (with no deferrals or forbearance).
I should also note that education debt is a much bigger deal than the student loan people make it out to be… Just ask anyone who is currently repaying their loans.
Although I’m not a counselor, I am a working professional earning a decent salary. Ten years out of college I still have $31,000 in education debt. While I deferred payments for a few years, the burden is still very real. You indicate a strong dislike for debt and even mention that a graduate degree is not a necessity for your career path. If I were you, I would give strong consideration to alternate options.
Whatever you do, make sure you spend ample time considering the debt before jumping in head first, as most students do. If I were you, I would use the existing bachelor’s degree to secure a position in the field, then establish a savings plan for future education costs. Save money first, then go back to school.
If nothing else, securing any available scholarship/grant monies and working your way through grad school will help lessen the blow of the education debt burden you need to take on.
Ultimately, taking on the debt is a personal decision. Since the graduate degree is not necessary (or appears not to be based on your reference to another, shorter program in England) I would advise against borrowing to make it a reality. Taking on unnecessary debt is never (or at least very rarely) a sound financial decision.
What do you think? Should Shana quit worrying about the debt and secure student loans? Are there any useful bits of advice that I failed to mention that can help Shana with her decision?