Wednesday, January 31, 2007

Grad School Dilemma

According to the Department of Census statistics quoted in a Yahoo! Finance article, the only advanced degrees that make a significant difference in earning power are an MBA or a law degree. Says investment advisor, Rob Bennet:

"[Young people] go to grad school to find themselves. Ultimately, they find themselves thousands of dollars in debt."
When I graduated with my bachelors, my intention was to work full-time for 2-3 years before going back to school to get a law degree. That was in 2004. Time has really creeped up on me whilst I was busy shoring up my financial reserves. But now that I finally feel financially capable of surviving grad school, I've realized that my intentions have reshaped themselves within the past few years.

Finally, over the summer, I read Gary Belsky & Deborah Schneider's Should You Really Be a Lawyer? By the end of Chapter Two, I realized that law school was not the place for me. I had wanted to go to law school for all the wrong reasons:
  • Herd Mentality

    SYRBAL definition - the tendency to allow our actions and decisions to be heavily influenced by those around us

    Yours Truly: So many of my friends are working on their master's degrees. It seems like the natural next step!

  • Regret Aversion

    SYRBAL - the tendency to avoid a decision or action for fear or regretting it later

    YT: What if I get passed over for a management position in 10 years because I don't have a master's degree!? By then, I'll have a mortgage & kids, and no time or extra $ for more school! I'd better go now, just in case.

  • Status Quo Bias

    SYRBAL - the inclination to resist change, opting to stay with what's familiar

    YT: I don't feel qualified to do anything with just a bachelors. I can go back to school first, and sort it all out later.

So, after a close examination my desires and abilities, I decided that I would see if I could carve out a career that I love in publishing; hence, the "new job/career" goal you see on my sidebar.

As you can see from the book and the article, there are numerous cases of people who regret getting degrees when they weren't sure of make sure you learn more about the field before committing yourself to so much debt. As for me, I reserve the right to consider more schooling at a later date!


Anonymous said...

I went to grad school (MBA), and while I don't regret it, know why you're going. MBA - networking, to get you the better job down the line. The knowledge, while valuable, comes with experience. If anything, you acquire the confidence to approach any situation and, if you're not business-minded already, it will help align you in that direction.

Lawyer - more studying and reading, lotsa work, but I would say the payoff is higher, unless you go to B-school to get into investment banking.

I have debt from school, but at a paltry 2.25% rate, I'll keep that for as long as I can. It'll be with me for a long time, but that interest rate can't even keep up with inflation.

WH said...

2.25%!?! Wish my undergrad loans were that paltry! =)

ispf said...

For someone in the electrical/computer engineering discipline, I definitely recommend doing a Master's. A person with Master's can easily get $10-20K+ more than a person with Bachelors. If you plan it well, you can do a Masters in less than 1.5 years. Also, in these majors, most good school have sufficient funding and with some planning and hard work, a student can usually support herself with very little (or zero)additional loan. So to me, bumping up your salary by ~$15K for 1.5 years of effort seems totally worth it.

Golbguru said...

When I joined grad school a few years was a major constraint. In fact, with my financial situation at the time, getting a loan was almost a zero probability. As a result, when I applied, I made it very clear that I would join only if they offer me financial support. The strategy worked, I since then I have never needed a loan :).

The point is that going to grad school does not necessarily mean getting more debt. Of course, it's field specific and I am talking only from an engineering major's perspective. Like ISPF, I would recommend grad school for most engineering areas.

Btw, those three reasons that you have listed..those are bang on target for most decisions in our life, not just when it comes to education. :)

WH said...

Just to clarify, I didn't mean to discourage grad/ professional/ business school, only to say that the decision bears examination into personal agenda.

Golbguru, I must remember to mention it when I apply!

Also, the writers of SYRBAL wrote the book by applying principles of behavioral economics to a decision that they each made. The principles are fascinating! There's more mentioned in the book, but these were the ones that applied to me. And in case anyone's intrigued: Psychology Matters.