Is graduate school worth the cost?

If you thought earning a bachelor’s degree was expensive, just wait until you start looking at graduate school.

Tuition at grad schools has been on the rise for the last few years. The cost of attending a school for an advanced degree jumped 60% in just a decade, according to LearnVest. After many students walk away from their undergraduate careers with thousands of dollars’ worth of student loan debt, the idea of incurring additional debts to continue their education is a tough pill to swallow.

Is graduate school worth the cost? There are many factors to consider — but for the sake of your bottom line and the state of your financial security, it’s worth taking the time to look into and decide for yourself.

Bad reasons for going to grad school

Before we even discuss how to determine whether the financial commitment is worth the potential outcome you’re looking for, you should think about why you want to earn an advanced degree in the first place.

While there are great reasons for wanting to further your education, there are some reasons that just aren’t good enough.

If you’re having a hard time finding a job, returning to school may sound appealing. But you won’t necessarily get a leg up on the competition or earn more than the next guy.

Not all fields or industries place value on advanced degrees; some may rather see someone with more practical experience. Save your money and volunteer to gain skills and industry knowledge, or hustle hard and network to earn new connections that could lead to the position you want.

Or maybe you feel obligated to go to graduate school because that’s what you’ve been told to do — or because you don’t know what to do after graduating with a bachelor’s degree.

Entering the real world and starting a career is scary, but attempting to delay that by remaining a student is only a good idea if you have the finances to do so. Otherwise, you’ll end up in the same position a few years later. Only this time you’ll have more degrees and more debt, too.

Before continuing down the higher education road, be honest with yourself. Why do you really want to go to graduate school? If you don’t have a valid reason, do yourself — and your wallet — a favor and pursue a different path.

Estimate all your costs

There are plenty of good reasons to attend grad school, too. Doing so may be required for the profession you’re interested in, could boost your earning potential, might help you make a career change, or you might simply want to earn an advanced degree for your own personal satisfaction.

But whatever your good reason, you can’t ignore the financial realities of your situation. Do some research and create a big-picture understanding of the costs involved with continuing your education.

You need to calculate the expenses associated with tuition and fees (the average cost of these for a master’s degree is $30,000). Don’t forget to account for interest if you plan on taking out student loans.

Then, you need to consider less-obvious expenses, like opportunity costs. If your career doesn’t require a degree, you’re missing out on years of earning a professional salary and experience. These are real costs that must be accounted for when you’re calculating the total expense of grad school.

Based on the numbers, ask yourself:

How much will you be able to afford out of pocket?
How much will you need to borrow?
How will you repay student loans?
How will borrowing money — or putting your savings into a degree program, rather than investing for retirement — affect your financial future?

If you feel like graduate school is too expensive, but you’re set on attending, look for financial aid programs before you take out loans to finance your education. Many states offer grants for individuals looking to work in certain fields. You may also earn a stipend for research work at the university you want to attend or payment for any classes you teach while you work toward your graduate degree.

You do have a variety of options; going into debt with student loans isn’t the only course to take.

Estimate your earning potential

Another factor to consider is your earning potential once you’ve earned your advanced degree. A large expense for your education might be worth it if it’s likely to net you a significantly larger salary over your working career.

Again, do the research by starting at a site like Salary.com or the Bureau of Labor Statistics. Establish some realistic numbers you can use to estimate your potential earnings with a master’s or other graduate degree. Then ask yourself, based on your estimated expenses, can you expect to recoup the initial cost or repay any borrowed money with interest in a reasonable timeframe?

In other words, determine your likely return on investment. That’s exactly what graduate school is — an investment. You should treat it like you would any other investment opportunity.

If the chances of a good return are there, it might be worth taking the risk (in this case, spending the time and money to earn the advanced degree). If your earning potential is questionable and your expenses are high, it’s probably not a smart financial move to take on the risk of losing lots of money in tuition or even debt from student loans.

Only you can determine whether graduate school is worth it

The decision to continue your education and attend graduate school is a deeply personal one. No matter what field of study or work you want to get into, earning advanced degrees takes a big financial and personal commitment. There’s a lot of money, time, energy, and effort involved.

Once you’ve crunched your own numbers, you can decide whether grad school is a sensible investment for your situation.

The bottom line? You shouldn’t put yourself in a bad situation where your finances suffer for your decision. If graduate school is something you want to pursue for personal or intellectual reasons, that’s perfectly fine — but it should be a goal to work toward when your finances can handle the burden.

Alternatives to pricey advanced degrees

Before making your decision, it’s smart to know your options. There are some alternatives to expensive advanced degrees.

Enrolling in a program from a technical college or continuing education branch of a university might provide you with the skills, training, and knowledge you need to advance in your career at a fraction of the cost of grad school. Or if you want to pursue something just for yourself, you may be satisfied with a certification or series of classes offered by other institutions.

There are also a variety of free educational resources available to anyone with an Internet connection. And again, consider doing volunteer work in your chosen field or industry if you’re interested in gaining the experience you need to obtain a better position at work. All these options cost is your time.

And don’t forget — you always have the option to do your own thing. In other words, if you’re looking for a change in job, want to do more with your skills and abilities, or aren’t sure what to do after earning your undergraduate degree, try picking up some freelancing work or even starting your own business.

For more money-saving info, see our Education section.