Graduates have a lot to contend with. For starters, it’s a highly competitive academic arena and then you’ve got to get out there in the real world and make it count. It’s a lot of responsibility to put on to somebody’s shoulders, but if you play your cards right you can emerge well positioned to take on your Student Loan debt and start building a solid foundation for your life. Before we get there, it’s important to take stock of how much graduate school costs.
According to FinAid, a Master’s Degree can cost anywhere from $30,000 on the low end to $120,000 on the high-end. That’s a chunk of change to repay when you are ready for the workforce. That doesn’t take into account all the other expenses you are likely to face in graduate school, such as living costs, transportation, foregone income through internships programs, et al.
Pyrrhic Victory for Graduates or Lasting Benefit?
That sense of accomplishment and euphoria that is associated with completing your graduate studies is unparalleled. Unfortunately, it’s the debt that remains well after the euphoria has subsided. Before you enrol in graduate school, you can adopt financial practices that will help you to mitigate the burden of repayment. For starters, your decision to enrol in full-time graduate studies, or part-time graduate studies can significantly affect the costs that you have to repay.
Remember, part-time graduate students can work while they are studying. You may end up paying a little more in the long run, but you’re earning a salary and that’s worth its weight in gold. The cost of your tuition also depends heavily on whether you choose to stay in state, or go out of state. Consider that out-of-state students pay a small fortune more than in-state students. It is certainly worthwhile relocating before you consider enrolling as a graduate Student. That way, you become an in-state student and can cut down on those astronomical education costs.
Now for the clincher: What can you expect as an ROI in your field of study?
US Student Loan Debt Tops GDP of many Countries around the World
The US Census Bureau estimates that people with graduate degrees typically earn $8,000 per annum more than those with bachelor’s degrees (undergrad degrees). So, if you estimate a working career of around 35 years – that translates into $280,000 more + inflation-related increases over your lifetime. It’s a pretty substantial amount, provided you are employed throughout that time, and that runaway inflation doesn’t eat into your take-home pay. The US Census Bureau published an interesting report in October 2012 which indicated that people with engineering majors typically earn $1.6 million more than education majors. And that report is now 6 years old.
There are downsides to the debt burdens incurred by college students. According to the latest statistics, US households owe approximately $1.48 trillion in student loan debts. Think about that figure for a second … $1.48 trillion. That’s more than the GDP of Hong Kong, or Sweden, or Thailand, or the UAE, or the Islamic Republic of Iran, or Nigeria, or Taiwan, or Malaysia, or Switzerland, or Poland, or the Netherlands. In other words, it is astronomically large, and it is a real problem. Some 44.2 million Americans have Student Loan Debt. The delinquency rate of those loans (default or late payments of 3 months +) is 11.2%. Now for some number crunching that really matters: the average monthly student loan repayment for people between 20 and 30 years of age is $351, while the median monthly student loan payment is $203.
