Can I Afford to Go Back to School?

After you’ve been a working stiff for several years, returning to grad school can be as tempting as a getaway to the Caribbean. No boss, no 9-to-5 schedule, no fluorescent office lighting. But will it put you on the path to success and riches, or could it be a financial sinkhole?

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Here’s a guide to help you make your decision:

Factors to consider:

What do you want to do with your life? If it requires a graduate degree, then you probably want to head back to school. But there’s room for a lot of gray area, too: Does your desired field require a degree, or is just a nice perk? How certain are you about your career goals? How much income will you forgo by taking a break from the workforce, and can you afford to do so?

For Annie Thomas, 29, the decision was pretty easy, since she had an administrative job with limited growth potential, and she knew she was interested in pursuing a PhD in political science. Today, she is doing just that in the Washington, D.C., area.

Another factor is how much debt you’re already carrying from college. “The high cost of grad school—and especially professional schools like law and medical school—is really one of the best arguments for doing undergrad debt-free. When I look at people who are overwhelmed with grad school debt, a big part of the problem is usually that that debt is stacked on top of undergrad debt,” says Zac Bissonnette, author of Debt-Free U.

Hidden costs:

Lost income: Even if you return to school part-time, you might have to sacrifice some earnings in order to complete your school work.

Living expenses: In addition to tuition, you’ll have to pay for rent, food, and other costs of living while in school. Financial aid and stipends don’t always cover those costs, and student loans aren’t free.

Textbooks: Big textbooks can cost as much as a new cell phone, and when you need a handful for each class, the price adds up quickly. That’s one reason Thomas recommends “never, ever” paying full price for textbooks. Instead, she says, go through Amazon, Half.com, or any other online source to find discounts. (The campus library also works.)

Refreshments: Students are known for binging on caffeine and beer; Thomas suggests drinking both substances at home as much as possible.

Common mistakes:

Running from a sluggish job market: If your return to the books is more about the down economy than a specific career goal, then you could be getting yourself into trouble when you graduate and still can’t find the job you want, warns Reyna Gobel, author of Graduate Debt. Instead, she suggests investing in a resume service, networking, and applying for more job openings. “The last thing you want is to get saddled with more student debt and no discernible career advantage,” she says.

Escaping student loan payments: Bissonnette calls this the worst reason to return to school—but a common one. Staying in school might allow for loan deferment, but Bissonnette likens this to “someone who chugs Bloody Marys every morning before work so that they can function after a night of heavy drinking. It does nothing to address the underlying problem.”

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Recommended strategies:

Build your (financial) safety net: Savings and other sources of income, whether it’s a partner or second job, can help you make it through those thin grad school days. Thomas recommends looking for teaching gigs on campus. Even though they won’t make you rich, an extra $3,000 a year, which is what Thomas earned last year, helped her keep the lights on. Working in the off-months of summer can also give your overall budget a boost, along with your resume.

Sketch out your budget in advance: You might find that you can scale back clothing purchases, since grad students don’t have to look quite as fashionable as working professionals, says Thomas.

Maximize your loan and scholarship options: According to Gobel, many students are pleasantly surprised to discover they qualify for scholarships, tax credits, grants, or other forms of tuition assistance. She recommends checking with your current employer’s human resources department to see if there are any such perks. She adds that studying hard to get high test scores can also improve your prospects for assistance.

Take prestige into account: While Bissonnette is a strong proponent of ignoring rankings when picking a college for undergrad work, he points to evidence that an MBA or law degree from a top school can lead to greater earnings later.

The bottom line: Grad school can be expensive, but it can also get you where you want to be.

Kimberly Palmer is the author of the new book Generation Earn: The Young Professional’s Guide to Spending, Investing, and Giving Back.