Degree or Debt?

adenblue · #1 10/02/08, 06:00 PM

Just curious to see what others think.

Would you spend money on an advanced degree that may (or may not) increase your income or would you use the money to get rid of debt?

willow_girl · #2 10/02/08, 06:03 PM

I'd get rid of the debt first.

One of the reasons I never earned a degree was because I was unwilling to go into debt for it.

Peace n Quiet · #3 10/02/08, 06:11 PM

Age is big factor here... if you anticipate many years of earning potential, than figure out what degree would give you a good return on your investment and go for it.

stranger · #4 10/02/08, 06:14 PM

Personally, i'd get out of debt, there are jobs now that are paying just as much without a degree as with a degree, depending on the degree, of course.

Kmac15 · #5 10/02/08, 06:15 PM

we are paying on a student loan for DH, earned his BSN
we added up what the higher degree can get him pay wise and it will be worth it, but decided that the next higher would not.
Now if we can find an employer to pay for it we would be in business.

culpeper · #6 10/02/08, 06:30 PM

It depends on the size of your debt, and your ability to pay off the debt AND progress payments for your degree. If at all possible, I'd attempt to do both. Furthering your education is a good means of getting a better-paid job in the future, and the future is what you need to plan for.

The sooner you start, the better - study is much harder the older you get. Ask me how I know! Along with the age factor goes the concern that over-40s have a harder time finding suitable employment anywhere - so again, the sooner you start your studies, the better your chances.

If you debt is a mortgage, definitely do the studies, and continue with the mortgage repayments at the same time. If your debt is for other things, and you're having difficulty making payments, the decision is made more complicated. Either way, you'll need to tighten your belt. Perhaps sell the Ferrari and get a cheaper vehicle!

I think it would be wonderful if you could get your degree. Do it, if at all possible, and you won't regret it. However, it should not be undertaken if there's a large risk of being in debt for the rest of your life. Only you know how well you can cope with added debt, and your capacity to pay it off, and who else will be affected by your decision.

Can you stretch your studies over more years, to thin out the debt? I did my degree (which would have been 4 years full-time) over a 10 year period, as a part-time evening student - working full time during the day, and bringing up a family (for most of that time as a single parent) as well. It was hard, but well worth it. The effort paid off in other ways as well - my children were inspired to follow my example, and went on to tertiary education and excellent careers (and lucrative pay-packets!), working their way through with part-time jobs. None of us has any regrets.

Rockin'B · #7 10/02/08, 07:23 PM

Even though I have been able to earn a fine living by being self taught at my chosen field, the one thing I truly regret in life is not finishing college.
I'd do what ever it took for you to get that degree. It's something that they can never take away from you and will be worth it in the long run.

Danaus29 · #8 10/02/08, 07:35 PM

I'd pay off the debt, then use the debt payments to pay for the degree, even if it meant taking just a few classes a quarter.

MELOC · #9 10/02/08, 07:47 PM

the schools aren't going to go anywhere, but times are tough right now. i would pay off the debt.

longshadowfarms · #10 10/02/08, 07:49 PM

Pay off debt and find non-traditional ways to pay for college. Take and pay for one class at a time, CLEP, take a lesser paying job that will pay you to go to school, take classes at community college, etc. I think we have had some threads about creative ways to pay for college. If you can't find them, maybe it is time to start one.

The Paw · #11 10/02/08, 07:49 PM

Quote:

Originally Posted by adenblue

Just curious to see what others think.

Would you spend money on an advanced degree that may (or may not) increase your income or would you use the money to get rid of debt?

If the purpose of the degree is to earn income, do a cost benefit analysis, as other have suggested.

If the degree is in a field of study that you love, and is worth doing for its own sake, then why not do it? It might enrich your life, and even if you pay down the debt now you will probably still face a lifetime of paying bills and loan payments like every other working stiff. No one knows what life will bring, other than the realization that in the final analysis, no one's getting out alive...

Betho · #12 10/02/08, 09:47 PM

Figure out the opportunity cost. If you make $20k/year, and after your degree you will make $50k, that's $30k you lose every year you put it off, in that case it would definitely be worth going for it, if you kept your standard of living the same, that's $30k per year you could put towards debt after you are finished.

So basically, if you have $20k worth of debt right now, and you can pay off $5k per year, it will take you 4 years to pay it off, and then you go to school, assuming it takes 4 years for school, that's 8 years before you will be making $50k/year.

Take that same debt load, but go to school, school takes 4 years, either you keep paying off the previous debt and it's paid off at the end of your 4 year degree, which means you are making $50k in half the time (and years 5-8 you earn $120k more than you would have before) or if you put the $5k into school, still finishing in 4 years, then the first year using part of your extra $30k to pay your debt off completely. Of course this doesn't take into account student loans, but you get the picture.

On the other hand, if you currently make $30k and then after 4 years of school would make $40k, it might not be worth it.

Also, if you have a low income and no previous degrees, you might qualify for a Pell grant... DH is going to school on a Pell grant which is awesome because all I have to worry about is paying our living expenses and we won't have student debt when he's done. Actually, on our current plan, we'll be completely debt free by the time he finishes, anyway.

DW · #13 10/02/08, 09:49 PM

Degree...this will open up more doors/income. If I did not have MA, my hubby would not be SAHD owing no money.

agmantoo · #14 10/02/08, 09:53 PM

Get the advanced degree! You will be paying the loan back with cheap dollars. The education will cost you a lot less now than in the future. Once you fall in a rut with a job and get committed to paying off other things you will have a much tougher time going back to school.

texican · #15 10/02/08, 09:57 PM

What kind of advanced degree?

Social sciences, or hard science and engineering? Or are you searching for just a sheepskin on the wall? I can see getting a BS. But a MS or PhD is, imho, frivolous, unless it's for a profession.

I have a BS, and almost a BA. I consider myself having 'advanced' degrees in many fields, but since my work doesn't require sheepskins in those fields, I've held off on getting a 'professional' certification through a degree.

If I had extra money, "I" would pay off my debt. However, a large cash reserve could be very useful if the economy collapses. An advanced degree in Art Appreciation..... well, I best hush up, and not 'dis' any folks on here with Art Degrees.

Lizza · #16 10/02/08, 09:59 PM

Can you not pay off the debt and then get a student loan for the schooling? I don't think going to school as a debt but an investment in your future. My oldest daughter is looking at a minimum of 8 years of schooling, at the end she will be a large animal vet. If she worked 8 years as a vet tech or assistant, where would she be at the end of 8 years? Still an assistant with a very low ceiling on her pay. Everyone gets older, where do you want to be in 2, 4, 6, or 8 years? My .02

**clovis** · #17 10/02/08, 10:03 PM

I almost always say "pay down debt!!!!!!!!!"

In this situation, I think more information is needed.

I am all for advanced degrees, but how much will it cost?

My wife works with people who are spending $125,000 for a master's degree in social work, a degree that will take up to 8 years to complete when done part time. The pay only jumps up $5000 a year at first, if that, but does jump up about $10,000 over time. If you have years to devote to the career, it will pay off in spades. Sadly, in many cases, people drop out, quit the career, etc. It is absurd to work on a degree if you are not going to finish it.

Of course, some advanced degrees pay off in spades immediately.

Either way, I would stay away from big, deep debt. Pay as you go, even if it means doing without and living a super meager lifestyle.

What field are you looking at studying?

Clove

Narshalla · #18 10/03/08, 01:05 AM

Pay the debt. Every month, you are spending good money on interest, "servicing" the debt. Without numbers, I cannot tell you how much you send to the ccc every month, but sufficed to say, not paying that interest is the same thing as putting money in your pocket every month.

Jena · #19 10/03/08, 05:54 AM

I am going to school now. I have no debts, which is good because I am broke! I am borrowing some money for school, but not very much. Just enough for tuition and books. So far, I've been able to make it by working part time, mostly because I don't owe any debts!

I am an undergrad, but I will be going to grad school for a MS. In my field (geology), a MS is pretty much required for a job.

I am 44. I don't know if I'll get my money's worth out of my degree, but I don't really care either. That is not my focus. I don't need a lot of money and I want the knowledge. Heck, maybe I'll just keep going to school until I croak!

If I were younger and having to suppport a family, my choices would be much different.

One huge factor....what do you WANT to do?

I love school and know I am very lucky to get to go back.

Jena

Lazy J · #20 10/03/08, 06:04 AM

We need much more information to determine the answer to this question.

What exactly is an "Advanced" degree? In the case of me and my wife it is a Ph.D. and a D.V.M.

What is the baseline salary? What is the potential increase in salary? Will you be on stipend from the university or will you simply be taking classes at your expense?

As with many topics on this and other BBS we are woefully short of information to give appropriate answers.

Jim