It is that time of year again when a number of my students who will be graduating are thinking about and/or have applied for graduate school. They ask me for letters of recommendation and for the most part I try to write glowing letters of those students. Those students who ask me to write them letters often deserve the high praise and I am happy to give it to them.
However, whenever I have a student ask me for a letter of recommendation I also talk to them about how they are going to pay for graduate school. This is especially true if they plan on going to a private school that could cost them upwards of a $100,000 for a graduate degree that may or may not help them. The overwhelming majority of my students say they will take out student loans.
When I hear this I fully admit I want to shake all of them and ask what in god’s name are they thinking. Aside from my journey to financial independence, I am also on a mission to persuade students to minimize or even reject student loans altogether. Part of that is my own experience because I took out so many when I don’t need too. But I also see how they are a burden on myself, more so on Mrs. ROB who has her own student loan debt, as well as others.
Unfortunately, my students attitudes, in my opinion, are way too nonchalant for what they are getting into and I beg them to find other alternatives. And I provide them with at least four options that they can use to NOT take out student loans.
Option #1: Employer Tuition Reimbursement
One of the great things about many employers nowadays is that they want their employees to succeed. Not all employers mind you, but a good chunk of them have specific reimbursement programs for their employees if they go on for an advanced degree. Too often though these programs are little utilized. Typically, an employee will take a course or two and get reimbursed at a certain rate by their employers. Some employers have a full 100% tuition reimbursement. Others will only have partial reimbursement. Frankly, if my students don’t work for an employer that does I tell them to not go to graduate school, find an employer that might have that benefit, or choose one of the other options below. Just don’t take out student loans.
Option #2: Go Part-Time, Pay For It Yourself
Another option that gets ignored is the pay-as-you-go plan. So instead of a student taking 2-3 classes per semester maybe they only take one because they can afford one. In my experience, and it is only my experience, it is often not needed for one of my students who is employed full-time to get a graduate degree right away (e.g. within a year). However, many of my students think like this. They want the degree done now so they can just not worry about it in the future. As such, they take out tens of thousands of dollars in student loans to finish a degree that if they just stretch it out for a couple of years or so they could pay for it out of pocket and without having to go into debt. That might mean delaying some gratification because you are paying for school out of your own pocket, but I think that is better than going into debt.
I also encourage this of many of undergraduates, particularly those who are going to take summer courses. Unfortunately, most students at state institutions do not take four years to graduate. It often takes an extra semester or even year of tuition to graduate. This is for a number of reasons. Some students drop courses and don’t make them up over the summer. Some students do internships, study abroad, or are involved in athletics. Some students do better by taking less credits (which I think is actually a good reason to slow down).
But a way to make up for those lost credits is to take summer courses. Summer courses, however, are often not included in financial aid. Students cannot take out public student loans or grants or scholarships for these summer courses. So they either have to put up the money themselves or go with private loans.
Well, private loans are not the way to go in my opinion, but I think many students might be able to foot the bill themselves for at least ONE course. A course at a public university is usually about $1000. At a community college it can be even cheaper. Most students will actually earn twice, three times, or four times this amount in their summer job(s). So I always tell me students to pay for the summer course on their own. That mean they might not get to go out as much, but it can save them tuition, time, and loan money in the long-term.
Option Three: Don’t go to graduate school
Now some of my colleagues might look at this third option and laugh at me because I fully admit I am a person who encourages students to go to graduate school. I think and will continue to think it is a worthwhile experience. However, I always tell those students that they should only go with funding options available! If they aren’t available I tell them not to go or to consider a cheaper program (e.g. a public university instead of a private one).
I do this because it is very rare to have a situation where a student needs to get a degree from prestigious university to advance their career. The place where one gets their degree really isn’t as important as getting the degree itself.
Additionally, I have many students who want to get a graduate degree when they shouldn’t right away. For example, I have had several students go for their MBA’s right out of their undergraduate programs. Huge mistake! Most people who get their MBA’s are doing it to advance their business career. But in order to do so they should have at least a couple of years of full-time work experience first so that this degree pays off! MBA’s can be great, but not for undergraduates who haven’t had full-time work experience.
Option Four (My Favorite): Graduate Assistantships
The fourth option and my favorite is for students to finance their graduate education through graduate assistantships. Graduate assistantships are essentially students become employees of the university in exchange often for free tuition, a small stipend to live on, and sometimes health insurance.
Graduate assistantships are NOT easy to get. They are based upon merit, but there are plenty of them at private and public universities across the United States. Typically, these assistantships have students work for a professor as a research assistant, or work as a graduate tutor or advisor or in an office, or perhaps students might even teach a course or two as the focus of their employment. I am amazed at how many programs across the country in my field of study are often searching and longing for qualified undergraduates to apply to their programs. They have assistantships to provide, but don’t get as many takers.
The great thing about assistantships is that they basically let you get your graduate degree for free to little or no cost to you. Now you will not get rich from being a graduate assistant. The stipend you receive is usually just enough to live upon (e.g. pay rent, some food, utilities, etc). If you want a lifestyle (like I thought i needed) etc you won’t get it on a graduate salary. But that isn’t the point. The point is that these programs provide you with a good graduate education that is at little to no-cost to you.
The Bottom Line
Ultimately, I think graduate education is a great thing. I mean I am an educator and I am certainly biased. However, I don’t think one needs to put themselves in hock for years to the tune of tens of thousands of dollars for a graduate degree. If that is you then perhaps graduate school isn’t right for you or maybe you need to take only one course. I had my graduate education financed, but I took out student loans anyway and I am still paying for it. Graduate school can be a great experience and there are a number of ways to pay for it that don’t require huge amounts of debt.