What the what of a graduate degree
Do you need or have a graduate degree? Are you concerned about how to pay it off your student loans even without a graduate degree? Here’s the information you need.
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The financial hardship of getting a graduate degree
If you’re debating on the need for a graduate degree, it’s important to consider your current situation and all your options. College and graduate school have never been more expensive. It’s almost impossible for a student to work their way through college or graduate school and graduate debt free. It’s not impossible, just almost impossible and this is how you can achieve it.
Most undergraduate students can guarantee they’ll graduate with some amount, if not a considerable amount, of debt. It’s not unheard of for graduate students to have $100,000 or more in student loans upon graduation.
Determining if a graduate degree is right for you
The first question a college graduate must ask is whether a graduate degree is worth it. Any business major understands the definition of “return on investment” or ROI. ROI measures the benefit of your time or money in something, such as the benefit of spending two additional years in school at the cost of $30,000 to $120,000.
As Odysseas Papadimitriou shared, sometimes a graduate degree isn’t necessarily worth it. Papadimitriou found his MBA to be “redundant to his dual undergraduate majors”. He hypothesizes that it may have served him better to choose a more diversified career path. In the end, it worked out for him, but his analysis poses an interesting question in the value of higher education.
Before taking on more student loans, college graduates should be very clear with how they’ll pay for additional schooling and of their career plan.
- What do they really want to do?
- Is additional school their only option?
- What investments will they have to make after graduation?
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Practical finance questions are important to ask, too, such as:
- What will the net total of all their student loans be after graduate school?
- What interest rate will they pay?
- What will their expected salary be upon graduation?
- What is their expected rate of salary growth?
- How long will it take to pay off all their student loans based on their salary estimate?
- What other life goals or dreams will they have to give up or defer for a graduate degree?
Depending on the undergraduate’s answers, graduate school may be right for them. It, also, may not be. Alternatives, such as paid internships, strategic career management, career diversification, among others, may make more financial sense.
The fastest way to pay off student loans
This leads us to our second point. If the college graduate determines that a graduate degree is necessary for their situation, how will they pay off all of their student loans?
Student loan rates are high and it’s not a guarantee that a graduate will be able to refinance their student loans to a lower rate. A lot of what it takes to refinance requires variables outside of the graduate student’s control.
Graduate students do have some control over their salaries. A number of factors, such as acquiring critical skills and experience, building a solid resume, being flexible on location and networking can help a graduate acquire a good income.
The most critical factor in acquiring a good income is knowledge of incomes based on the student’s graduate degree. This is where our friends at SoFi can help. SoFi analyzed over 300,000 borrower application incomes by degree types over the first ten years after graduate school.
With this information, a graduate knows the average incomes of their peers since graduation. This helps the graduate to know when they’ve received a fair offer and what income they should reasonably request.
SoFi also provides six essential tips for better salary negotiations. Salary negotiation is a skill, but a critical one for graduate students to master so as to not short-change their long-term income.
The more a graduate earns and the lower they can keep their standard of living, the faster they can pay off their student loans. With the high rate of most student loans today, it’s important for graduates to pay their student loans off as fast as possible so they can stop paying for their past and start saving and investing for their future.
Review the infographic to help negotiate a higher income to pay off your student loans as fast as possible. If you have questions, you can reach our friends as SoFi by clicking here.
Finally, heed Papadimitriou’s sage advice and “don’t let parental or societal expectations divert you from your pursuit of personal and professional happiness”.