The reason behind that increase is simple: Few students coming out of college are able to find full-time work in their fields -- more than half of grads under age 25 are working at jobs that don't require degrees -- and that leads to a weird paradox. Having spent as much $200,000 on a degree they were told would net them a job, they feel that they have no choice but to spend tens of thousands of dollars more chasing that elusive dragon.
It's like the Nigerian email scam where you send in $10,000 to get $10 million, and then they follow up and say there was a paperwork snafu and that they need another $2,000 . . . and then another $3,000, etc. At some point you have to figure out that you're being scammed.
What to Consider Before Choosing Graduate School
Two questions I think parents and students need to ask before they pursue grad school:
- Can I do it without my cumulative debt load becoming unmanageable? One of the reasons I always recommend that families pursue whatever undergraduate option will allow them to avoid student loans is this: More and more students are pursuing grad school. According to FinAid.org, 55.2% of students pursuing Masters degrees use student loans to finance it, with the average borrower taking out $31,031. That might be manageable, but if you already borrowed $20,000 or $30,000 for undergrad, it's probably a terrible idea that will lead to strained finances once all those loans enter repayment, especially if the new degree doesn't immediately lead to a high-paying job. And for those who say "Oh, but it will," remember: you thought the same thing about that stupid Bachelors degree.
- Is there really going to be a significant value-add to going to grad school? Recognize that if the problem is the economy, you may be better waiting it out -- and don't overlook free options that may give your resume as much of a boost as grad school. Before you give up on the job hunt and go back to school, look into unpaid internship opportunities at companies or organizations that interest you. Sure you won't get paid, but you also won't be paying, and you can moonlight as a pizza delivery guy to cover your living expenses. There are some careers that really do require a Masters degree, and maybe the one that interests you is one, but if it isn't, think twice before grad school. Be creative and try to find other ways to build your resume while you wait for the economy to rebound.