You Can Go to Graduate School Without Student Loans

I hope everyone is enjoying the vacation guest posts seen over the last few days by Slowly Sipping Coffee and Think Save Retire, if you haven’t had a chance to read up on Lego’s and Staying Positive, I highly recommend giving them a read.  Today is a new day which brings about a guest post from Reaching Our Balance.  Today’s post is near and dear to my debt hating student loan heart, in fact not long ago I told myself I would not go to graduate school unless someone paid it for me.  If you are looking to go back to school to increase your salary or be selected for that next big promotion, let’s look what we can do to get there without any debt.

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Reaching Our Balance Finding Peace in Money, Work, and Pleasure

 

It is that time of year again when many people across America consider going to graduate school. As an educator I have a number of students who are graduating and wondering about if grad school is right for them. They ask me for letters of recommendation and I am happy to write them letters filled with high praise.

However, whenever I have a student ask me for a letter of recommendation I also talk to them about how they are going to pay for graduate school. This is especially true if they plan on going to a private school that could cost them upwards of a $100,000 for a graduate degree that may or may not help them. The overwhelming majority of my students say they will take out student loans.
When I hear this I fully admit I want to shake all of them and ask what in god’s name are they thinking. Aside from my journey to financial independence, I am also on a mission to persuade students to minimize or even reject student loans altogether. Part of that is my own experience because I took out so many when I didn’t need too.

Unfortunately, my students attitudes, in my opinion, are way too nonchalant for what they are getting into and I beg them to find other alternatives.  And I provide them with at least four options that they can use to NOT take out student loans.

Before You Go Consider Your Graduate School Choices

It is extremely tempting to go to graduate school at the best school that you got into. Unfortunately, those schools can often be private institutions that will cost you tens of thousands of dollars. Typically, a local state university will have a graduate program at a much cheaper price and you will find that program can be just as good, if not better, than the better rated school.

On a few occasions, the reputation of the graduate school can matter. This can be especially true with law schools or even getting your MBA. However, you have to consider why you want the degree. If you just need the credential then a state university is fine. However, if you plan on moving out of state or want to join some big Wall Street firm or a big law firm then sometimes reputation can matter and it might be good to consider going to the top school that you can. But that is somewhat unusual.

One more thing to consider is if you are thinking about doing an on-line program like the University of Phoenix or Strayer University consider what those programs incur. How are those programs received in your industry? Why are you choosing those programs? Is it convenience? Money? I find that online programs are a lot of times more expensive than state universities and the only advantage is convenience. Convenience, to me, is not the deciding factor in choosing graduate school.

Choose wisely when considering graduate school. Ask your former professors. Ask co-workers. Do a little digging on reputation and that will help make your decision easier. Once you have chosen how do you pay for school?

Option #1: Employer Tuition Reimbursement

One of the great things about many employers nowadays is that they want their employees to succeed. Not all employers mind you, but a good chunk of them have specific reimbursement programs for their employees if they go on for an advanced degree. Too often though these programs are little utilized. Typically, an employee will take a course or two and get reimbursed at a certain rate by their employers.  Some employers have a full 100% tuition reimbursement. Others will only have partial reimbursement. Frankly, if my students don’t work for an employer that doesn’t have some tuition reimbursement I tell them to not go to graduate school, find an employer that might have that benefit, or choose one of the other options below. Just don’t take out student loans.

Option #2: Go Part-Time, Pay For It Yourself

Another option that gets ignored is the pay-as-you-go plan. So instead of a student taking 2-3 classes per semester maybe you only take one because one is affordable. In my experience, and it is only my experience, students do not need a graduate degree right away when they start their working lives. That said, many of my students have a mentality they need to get it done now. They want the degree so they can just not worry about it in the future. As such, put themselves thousands of dollars in debt to finish a degree faster that if they just stretched it out for a little more time they could pay for it out of pocket, not go into debt, and get a tax deduction on top of it That might mean delaying some gratification because you pay for school out of your own pocket, but I think that is better than going into debt.

Remember, most master’s degrees are only 30-36 credits. If you take one class per semester (usually costing about $1000 per course) and include a summer course you can be done in three years or even four instead of the traditional two. Not a long time to wait to finish your degree DEBT FREE!

Option Three: Don’t go to graduate school

Now some of you might be reading this and thinking how can that be an option, especially coming from me because I am a huge promoter of graduate education. However, I always tell students that they should only go with funding options available! If they aren’t available I tell them not to go or to consider a cheaper program (e.g. a public university instead of a private one).

I do this because it is very rare to have a situation where a student needs to get a degree from prestigious university to advance their career. The place where one gets their degree really isn’t as important as getting the degree itself.

Additionally, I have many students who want to get a graduate degree when they shouldn’t right away. For example, I have had several students go for their MBA’s right out of their undergraduate programs. Huge mistake! Most people who get their MBA’s are doing it to advance their business career. But in order to do so they should have at least a couple of years of full-time work experience first so that this degree pays off! MBA’s can be great, but not for undergraduates who haven’t had full-time work experience.

Option Four (My Favorite): Graduate Assistantships

The fourth option and my favorite is for students to finance their graduate education through graduate assistantships.  Graduate assistantships are essentially when students become employees of the university in exchange (often) for free tuition, a small stipend to live on, and sometimes health insurance.

Graduate assistantships are NOT easy to get. They are based upon merit, but there are plenty of them at private and public universities across the United States. Typically, these assistantships have students work for a professor as a research assistant, or work as a graduate tutor or advisor or in an office, or perhaps students might even teach a course or two as the focus of their employment. I am amazed at how many programs across the country in my field of study are often searching and longing for qualified undergraduates to apply to their programs. They have assistantships to provide, but don’t get as many takers.

The great thing about assistantships is that they basically let you get your graduate degree for FREE or at little to no cost to you. Now you will not get rich from being a graduate assistant. The stipend you receive is usually just enough to live upon (e.g. pay rent, some food, utilities, etc). If you want a lifestyle (like I thought i needed) etc you won’t get it on a graduate salary. But that isn’t the point. The point is that these programs provide you with a good graduate education that is at little to no-cost to you.

Finding assistantships are fairly easy. You can contact the office of graduate admissions at your university for information on varying types of assistantships or more often then not if you find the homepage of the department you will be getting your degree in they will have a specific link to graduate programs. Those links will often have descriptions of the program, classes that you are required to take, and a specific application for the assistantship.

Having an assistantship is a great way to finance your graduate education. But if you become a graduate assistant of any kind, plus trying to go to school, you will find it will be difficult to hold a full-time job outside of the assistantship. You can maybe get a part-time job at night, but a full-time career and an assistantship are difficult to manage. But it can be done and you walk away with great experience from your university and basically a FREE EDUCATION!

The Bottom Line

Ultimately, I think graduate education is a great thing. As a college professor I am certainly biased. However, I don’t think one needs to put themselves in hock for years to the tune of tens of thousands of dollars for a graduate degree. If that is you then perhaps graduate school isn’t right for you or maybe you need to take only one course at a time. I had my graduate education paid for with assistantships, but I took out student loans anyway and I am still paying for it. Do a little research and getting your graduate degree can be within reach without huge amounts of debt.

9 Responses to “You Can Go to Graduate School Without Student Loans

  • I agree that you should ask, “what will I get from this degree to further my career?” before starting grad school. It depends on your career path, but in my field, if you don’t have a Master’s or higher, you don’t get hired. Any good petroleum related program should have a way to fund you and cover tuition. I paid for part-time until I got accepted and could get into a Research Assistance-ship and I also did Teaching Assistant. Unfortunately, I still took out loans, while school was effectively free and I had a paid stipend… Idiotic, I know.

  • Mr. SSC I did the same thing. I took out student loans even though my graduate program was paid for. But as you noted that graduate assistantship is a great way to pay for school. It might mean taking off a year or so from working, but it can be worth it in the long-run, especially if you don’t have a family to worry about.
    Jason recently posted…Why Gold Is a Terrible InvestmentMy Profile

  • I agree with Mr. SSC about asking what the degree will get you in your career. Working in consulting civil engineering, an advanced degree would get me just about zilch. I know folks that have gotten master’s degrees in our field. But in the end, on-the-job experience really provides the best benefit in my opinion. The only advanced degree that might help would be some sort of business or management to help move into the upper ranks where the business side takes over more. The best advice is to know your market and understand what you are hoping to gain.
    Mrs. Maroon recently posted…FF #14 – My New Cleaning SolutionMy Profile

  • These are all great tips. I took out a little bit in student loans for my graduate degree, but I didn’t take out anywhere near the amount I took out for my undergraduate degrees. I definitely could have gone without student loans completely, as I was working full-time. My head just wasn’t in the game!
    Michelle recently posted…Should We Get Rid Of A Car And Just Have One?My Profile

  • I find myself in a position where my company is willing to pay for me to get my MBA. And it is actually a milestone I need to hit as a part of the succession planning I am involved in for the role of CFO.

    The problem is that I really don’t know that I want the CFO role. I would much rather build a lifestyle business and work on things that matter to me. My boss works 90 hour weeks on a regular basis, and sometimes much more than this. Yes he makes a few hundred grand more than I do.

    But honestly I would rather have less pay for more time to build my dream rather than someone else’s. I am a huge proponent of continuing education.I would even go as far and say that I consider my self to be a perpetual student.

    So do I pursue and MBA that I don’t think will help me get where I ultimately want to go? It just means I spend more time following someone else’s plan and not my own.

    I had planned on applying by the April 1st deadline (in order to start August of 2015), but after careful consideration and a lot of thought. I decided to delay it one year to see what I could do online with my business instead.

    In a year if I am not happy with the progress I have made, then I will likely go and get my MBA. But I have a burning feeling that a year from now I will have hit some awesome milestones that will dissuade me from going after that MBA.

    Only time will tell.

    Cheers!
    Gen Y Finance Guy recently posted…Nominated For The Liebster AwardMy Profile

  • I agree that students need to carefully consider their options. I’m doing it myself, in fact. Since I don’t need much beyond a strong regional brand and the credential itself, an MBA from the local state school is a great way to go for me. Helps that I work there and get a discount. Years of mistakes taught me some lessons, I suppose.

    I am a little jealous of those tuition numbers you quoted, though. Not something we see in the area due to recent changes in legislature and funding.

  • All my friends who decided they wanted to get the masters in engineering got free school. They either did research for professors or were teaching assistants. Of course they were all really smart and good students, so they probably could have made some big money with just their undergrad degrees, they just really loved the areas they would get to concentrate on.

  • Studnt loans are the thing most are trying to avoid(and rightfully so), but if you are going to take out a loan, do your research. If a school offers you a loan, check to see if it will be from a private bank or if it is a federally guaranteed loan. Experts suggest to first get a federally guaranteed loan, because theinterest rates are usually lower and there are better plans for repayment, loan forgiveness, and protection of the student if deferral is needed.

    One thing is for sure, loans should be the last line of funding for education, and careful planning and smart choices can lessen those borrowed dollars.
    Warren Lee recently posted…Expert Panel of Peer-to-Peer Lending Pros Reveal Best 3 Investing TipsMy Profile

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