In a previous article for PolicyMic, I wrote that getting a college degree is indeed worth the investment as long you make the most of it. The logic and recommendations I provide in that article apply similarly to the decision to invest in a graduate degree, and I won’t repeat them here. However, it is more likely that individuals will be paying for graduate school rather than receiving help from parents or others, and that the economic payoffs are relatively more important than the non-financial ones that come from attending four years of college.
After all, people should be attending graduate school to further their careers, and not to have a good time. At least, that’s the reason my wife and I both attended graduate and professional school. (My wife, Karen, has an MBA and a Ph.D. in marketing communications; I have a Ph.D. in business administration.)
Here are three things you should take into account when deciding whether or not grad school is for you.
1. Calculate the total cost of earning the graduate degree, and include foregone earnings.
When I informed my bosses at General Motors in 1987 that I would be returning to school to earn a Ph.D., they told me that I “would never earn as much as I would if I stayed at GM.” First of all, I knew they were wrong, in the sense that business school professors made decent salaries, and that they could earn outside income as consultants. Moreover, unless I became a high-level executive at the company, I would never make large sums of money. I knew even back then that GM was going to have to go through a lot of changes before it could become a great company again, changes that would adversely affect a lot of employees.
Still, I knew it would be a four to five-year investment in a degree, and I did have to consider that my income would be dropping substantially while I was a graduate student.
As one of my colleagues from graduate school told me: "Even though I didn’t incur debt, I did give up a job as a CPA to go to school, so there was a substantial opportunity cost. For me, it was worth it because I didn't really want to be a tax accountant and I met some really cool people who are still friends today. I also got to do some really interesting work, something I am still doing even though I left a tenured position to go free-lance in the desert."
2. Evaluate the learning experience and placement record for graduates.
How long does it typically take for students to complete their degrees, and what percentage of them actually complete their degrees? How strong is the career mentoring that they receive from their professors? Given the still very difficult economy of early 2013, and the likelihood that high growth rates won’t return very soon, knowing where you’ll end up when you’ve completed your degree is even more important than it was a few years ago. If you want an academic career, what percentage of graduates go on to work at colleges or universities, and which ones? For non-academic careers, where do graduates end up?
As one of my college classmates told me, "I learned a lot, made great contacts, and the world was open to me. I'm not as convinced the trade-off works today given much higher education costs. I'm also not convinced the trade-off works at schools that don't have a top ranking, unless the cost is pretty reasonable."
3. Remember that money isn’t everything.
This may seem to contradict point 1, but it doesn’t. My wife and I both left GM for our MBA and Ph.D., respectively, because they wanted to improve our minds, which weren’t being taxed very much in our jobs at GM, and to be able to find careers that were also intrinsically more motivating.
Since you will be paid very little or nothing at all while in graduate school, you can’t be motivated by money. Unless you go into business, you likely will not make large sums of money after graduate school. Thus, unless you love your field of study, and will have non-financial rewards that are significant (e.g., improving society or the environment, mentoring students), surviving the arduous process will be even more difficult.
Above all, make sure that you are happy to return to school. If you are going to spend the time and money, dig in and make the most of it. You will feel so much better about those student loans if you know that you have improved your mind, increased your network, and have even had some fun along the way. We took on our fair share of student loans in Ann Arbor, but we also gained great friends, great mentors, thought great thoughts, and had a blast doing it. No regrets.
Aneil Mishra and Karen Mishra are business school professors and authors of Trust is Everything (2008) and Becoming a Trustworthy Leader (2012)