
Pursuing an advanced degree can be a smart investment in your future, especially if it leads to higher earning potential. Studies have shown that individuals with advanced degrees tend to earn significantly more than those without them. In fact, a master's degree can increase your earning potential by up to 20% compared to a bachelor's degree.
For example, a survey found that professionals with a master's degree in business administration (MBA) can earn an average salary of $104,000 per year. In contrast, those with a bachelor's degree in business administration may earn around $60,000 per year. This significant difference in earning potential can make borrowing money to pursue an advanced degree a worthwhile investment.
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Paying for Education
Going back to school can be expensive, but help is available. You can start by filling out the FAFSA form, which is essential for securing federal assistance and state support.
The federal student loans offered to you will likely have lower interest rates and more flexible payment plans than alternative loans. Government loans usually carry lower interest rates than private ones.
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You may also get a grant, which is money that doesn’t need to be repaid after college. Depending on your financial circumstances, you may qualify for a grant.
Scholarships could be another option. You can look into institutional scholarships, which come directly from your school, or private scholarships from organizations such as professional associations, religious groups, and philanthropic foundations.
Employer assistance is sometimes available for adults returning to school. Workplaces sometimes have funds to cover a portion of their full-time employees’ tuition.
Financial Considerations
Borrowing money to pursue an advanced degree can be a daunting prospect, but it's not impossible. If you're considering taking out loans, it's essential to understand how they'll impact your finances.
Ideally, your total student loan payments should be no more than 10% of your gross monthly pay, which means you'll need to earn a significant income to afford the payments.
To give you a better idea, let's look at some examples. If you're considering law school and earn $50,000 a year, you'll need to borrow $36,000 a year in addition to tuition just to live on, which totals $108,000 over three years.
Borrowing for living expenses can add up quickly. In the example above, repaying the $108,000 over 10 years at 6% would result in a $1,200 monthly payment just for living expenses.
However, there are ways to make borrowing more manageable. If you work part-time while in school, you can reduce the amount you need to borrow for living expenses. In the example, working part-time would reduce the total cost of borrowing to $206,331 over 20 years.
If you're considering going back to school at 35, you can start by completing the FAFSA to identify which grants and loans you're eligible for. The federal student loans offered to you will likely have lower interest rates and more flexible payment plans than alternative loans.
You can also ask your school about payment plans and tuition assistance programs if you're quitting your job to return to college. If you plan to work while in school, you can ask your employer about tuition assistance programs.
Here are some estimated costs to consider:
Keep in mind that these are just examples, and your actual costs may vary. It's essential to carefully consider your financial situation and create a plan to manage your debt before taking out loans.
Student Loan Options
Borrowing money to pursue an advanced degree makes sense if you're willing to invest in yourself and increase your earning potential. According to the article, a master's degree can lead to a 20% increase in salary.
Many students take out federal loans, which have a fixed interest rate of 6.08% for graduate students in the 2022-2023 academic year. Federal loans also offer income-driven repayment plans, which can make monthly payments more manageable.
Some students opt for private loans, which often have variable interest rates and may require a credit check. However, private loans can offer more flexible repayment terms and may be used in conjunction with federal loans.
The article notes that the average student debt for master's degree recipients is around $40,000. However, this amount can vary widely depending on factors such as the institution and field of study.
To make borrowing more manageable, students can also consider income share agreements, which allow employers to pay a portion of their employees' student loans in exchange for a set period of employment.
Career Advancement
Pursuing an advanced degree can significantly boost your earning potential. Many people with an MBA earn more than $100,000 annually, with an average salary of $96,000 nationally.
Going back to school at 35 can be a game-changer, allowing you to refocus and advance in your career. You can turn your work experience into college credit and potentially test out of classes.
College graduates earn 1.66 times more than high school grads over their lifetimes, and those with professional degrees earn 2.74 times more. This increased earning potential can be a major motivator for borrowing money to pursue an advanced degree.
You can save money by attending school nights while continuing to work full-time, but it will take longer to get your degree and start leveraging higher pay. This approach can be a good option if you're 25 and earning $35,000 a year, with a lifetime total of $2.75 million assuming a 3% annual raise.
Higher salary potential is a major draw for many people pursuing an MBA, and it's not uncommon for business professionals to earn over $100,000 annually. With an average salary of $96,000 nationally, an MBA can be a smart investment in your future.
Returning to school at 35 can be challenging, but it's worth it for many people who want to get out of their career rut and into something more rewarding. You can consider enrolling in an online degree program that fits around your existing commitments, and explore financial aid options like the FAFSA.
Investing in an MBA
Investing in an MBA can be a smart move for those looking to boost their career prospects and financial rewards. Eighty-seven percent of respondents in a GMAC alumni perspectives survey said their MBA increased their employability.
The financial benefits of an MBA are also significant, with 68 percent of respondents finding it financially rewarding. You can research the salary potential for your future career on the Bureau of Labor Statistics website to compare with the cost of the MBA program.
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Some careers require an MBA, such as financial management or top executive roles. An MBA can lead to personal and professional benefits, but many people choose this route for financial rewards.
Comparing the tuition costs of the MBA program with the potential salary you might earn in your future career is crucial. This will help you decide if the program is right for you.
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Time Commitment
Borrowing money to pursue an advanced degree can be a smart move, especially if you're looking to boost your career prospects. MBA programs often require a two-year commitment to intensive, full-time study.
This can create challenges for parents, new graduates with school debt, or professionals who cannot afford to lose their jobs. You might face a gap in your resume as you take time off for school, plus the lost income.
Many part-time and online MBA programs allow you to attend around existing work schedules, making it more feasible to balance school and work responsibilities. Executive MBA programs are typically shorter than traditional MBA programs, focusing on existing professionals and allowing them to skip the basics and dive into more advanced topics.
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Education Decisions
Borrowing money to pursue an advanced degree can be a smart move if you're willing to put in the work to pay off the debt. According to statistics, students who borrow money for an advanced degree have a higher earning potential than those who don't.
In fact, research shows that individuals with a master's degree can earn up to 20% more than those with a bachelor's degree. This increased earning potential can help you pay off your debt and start building wealth.
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Degree Level Selection
Choosing the right degree level can be overwhelming, but understanding your career goals and the time commitment required can help. Knowing the field and career you're pursuing will help you determine what degree level you should pursue.
There are four college degree levels: Associate, Bachelor's, Master's, and Doctoral. An Associate degree typically requires 60 credit hours and can be earned in about 2 years of full-time study, while a Bachelor's degree requires 120 credit hours and can take around 4 years to complete.
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If you're looking to save money, consider pursuing a degree that can be completed while working full-time. This will take longer to finish, but it can be a cost-effective option. For example, if you earn $35,000 a year and work until 65, you'll earn a lifetime total of $2.75 million, assuming a 3% annual raise.
Here's a breakdown of the different degree levels and their typical time commitments:
Earning a degree can significantly impact your earning potential, with college graduates earning 1.66 times more than high school graduates over their lifetimes, and professional degree holders earning an average of 2.74 times more.
Different Master's Degree
If you're looking for a master's degree that's tailored to a specific field, a specialized master's degree is worth considering. A specialized master's degree provides more in-depth and focused training than an MBA.
An MBA provides comprehensive training and marketable skills, but a specialized master's program delves into advanced concepts of one field, such as accounting, finance, or marketing.
Calculating ROI

An advanced degree can be one of the best investments you can make, and borrowing money to finance that investment often makes sense. If you have to take out student loans to finance your living expenses in grad school, try to minimize the amount you'll borrow by saving ahead of time for your living expenses.
Saving for your living expenses can make a big difference. Working part-time while in school and ruthlessly cutting costs while in school, such as living with roommates or ditching your car, can also help.
Borrow no more than what you'll need to meet your expenses. If you end up borrowing more than you need, pay back the extra funds as a principal-only payment on your loan.
Here's a simple equation to help you calculate the cost of your advanced degree:
- Tuition and fees
- Cost of living expenses while in school
- Earnings you'll sacrifice by spending years away from the workplace
Compare this total cost to the potential salary increase you'll get after completing your advanced degree. According to a GMAC alumni perspectives survey, 87% of respondents said their MBA increased their employability, and 68% of respondents found it financially rewarding.
Student Loan Costs

Student loan costs can be a major burden, especially if you're not careful. Ideally, you want your total student loan payments to be no more than 10% of your gross monthly pay.
Borrowing too much can leave you feeling squeezed in other areas of your finances. If you're considering going back to graduate school, you'll want to consider how affordable your loans will be after you graduate.
You'll need to make sure that borrowing the cost of tuition will enable you to get a job in which you can afford to repay your loans. Second, you'll need to consider how much you'll borrow for living expenses.
Let's say you currently earn $50,000 a year and bring home about $36,000 after taxes. If you go back to school and do not want to work part-time OR reduce your lifestyle, you'll need to borrow $36,000 a year in addition to tuition just to live on.
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Here's a rough breakdown of the costs:
- $36,000 a year for living expenses totals $108,000 over three years.
- $206,331 (paid over 20 years) is the total cost of borrowing (including interest) if you earn $8,000 a year working part-time.
- $257,914 (paid over 20 years at 6%) is the total cost of borrowing if you borrow $75,000 a year for two years.
These numbers are sobering, and they should give you pause before taking on more debt.
Sources
- https://pfforphds.com/entering-a-phd-program-with-significant-debt-and-investments/
- https://www.bankrate.com/loans/student-loans/is-mba-worth-it/
- https://mycollegeguide.org/going-back-to-school/
- https://dollarsprout.com/should-you-get-a-graduate-degree/
- https://www.moneyunder30.com/should-you-take-out-loans-to-pay-for-living-expenses-in-graduate-school/
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