5 tips to decide when getting more education pays off.
Money Girl
284 MG Does it Pay to Go Back to School?
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[MUSIC PLAYING] During congestion, customers on this climbing and notice speeds lower than other customers and further reductions using greater than 1.2 terabytes per month due to data prioritization. After $20 bill credit plus $5 per month without auto-paintive it, I can't reply. Regulatory is included for qualifying accounts, $35 connection charge applies. [MUSIC PLAYING] Hi, everyone. I'm Laura Adams, and you're listening to the Money Girl podcast. [CHEERING] I received an anonymous email that asks, I recently graduated with my bachelor's degree and started repaying my student loans. But now I'm thinking about getting a master's so I can earn more. Is it better to wait until I pay off my current loans to go back to school or to go now and add more loans to my existing debt? Whether you should go back to school is an important decision because it affects many aspects of your life. Today, we'll cover the pros and cons of returning to the classroom. Plus, you'll get five tips to know whether getting more education will pay off, especially if you need to borrow money to make your education dreams a reality. Paying for education is an investment in your future that usually pays off. Did you know that having a bachelor's degree is worth almost $1 million more in lifetime earnings on average than having a high school diploma? Going the extra distance for a master's degree gives you an average of 1.3 million more. And if you really want big bucks, doctoral degrees and professional degrees can give you over $3 million more than if you don't continue your education after high school. Not only does higher education help you earn more, but the recent recession proves that it also makes you more employable. As of July 2012, the unemployment rate for a high school graduate was 8.7% compared to 4.1% for a worker with a bachelor's degree or higher. In addition to having more money and security, it can be personally rewarding to go back to school, having the opportunity to broaden your interests or study a subject that you love is incredibly exciting. Additional education also gives you more confidence, contacts and experiences to draw from for the rest of your life. As numerous as the arguments are for heading back to school, there are negatives to consider. The biggest downside is the cost. Higher education gets more expensive every year and few people can foot the bill without going into debt. Although, as I mentioned, higher education can be the key to earning more money. It could take many years for your income to blossom. Until then, you could feel stretched thin to pay bills and student loans. Another consideration when you go back to school is the income you give up if you have to quit work to become a full-time student. Also, leaving the workforce for several years could be detrimental to your career in the long run. A psychological consequence of investing lots of time and money into getting a degree is that you may feel chained to a particular career if it comes with a hefty educational price tag. That could make it difficult to change jobs later on if you get disenchanted with the work. We all know wildly successful people, like Richard Branson, the billionaire founder of Virgin Enterprises, Dave Thomas, the billionaire founder of Wendy's, and Mark Wahlberg, Oscar-nominated actor and entrepreneur who never finished high school. Depending on your career or goals, you might not need a degree to earn more or to achieve success. Just remember that these instances where lack of formal education leads to big money are rare. If you're wondering whether going into debt for more education will really pay off, here are five tips to follow. Number one, ask your employer. Meet with your boss to find out whether he or she believes getting an additional degree can pay off in your company or industry. Get the opinions of people you trust about whether more school is the key to landing a better job or a promotion. Nearly a billion people experienced hunger last year and organizations on the front line need support. That's why at Global Citizen Festival, City announced a new commitment supporting World Food Programs Mission, and you can help. City will match donations to World Food Program up to $250,000 until December 1st or until we reach our goal, whichever comes first. Visit wfpusa.org/city to make a donation and double your impact. For the love of making a difference, for the love of progress, City. - Hey, Spotifyers, ever wondered how to save for retirement? Advocate for yourself in the workplace, pay down debt. Women Talk Money is here to answer all your money questions. Click or tap the banner to join the community today brought to you by Fidelity's Women Talk Money. - I love learning and anything that makes learning easier. If you're a parent and your child needs some homework help, then Ixcel is a right for your family. Ixcel is an online learning program for kids covering math, language arts, science and social studies. Ixcel has interactive practice problems for topics from pre-K to 12th grade and everything is organized by grade and subject. As kids practice, they get positive feedback, awards and explanations for wrong answers. Ixcel figures out what your kids need more help with and recommends more topics to practice. Get their videos, lessons, sample problems and learning games too. One subscription to Ixcel gets you all subjects and all grade levels. Membership started just $9.95 a month. It's no wonder Ixcel is used in 95 of the top 100 school districts. I think the positive feedback that Ixcel gives is really crucial when it comes to learning. So make an impact on your child's learning, get Ixcel now and money girl listeners can get an exclusive 20% off Ixcel membership when they sign up today at Ixcel.com/moneygirl. Visit Ixcel.com/moneygirl to get the most effective learning program out there at the best price. Number two, get tuition reimbursement. If you're employed and want to continue working during school, find out if your company pays education expenses. Tuition reimbursement programs typically pay a portion of the cost of classes related to your job if you maintain a certain grade point average. When I got my MBA, I was working for a Fortune 500 company that paid about 30% of my total tuition. You get additional education and become more valuable to your company at the same time. Number three, research potential income. If you're considering a degree for a brand new field, get familiar with its average salaries. Check out resources like payscale.com, salary.com and the Occupational Outlook Handbook, which is published by the Bureau of Labor Statistics at bls.gov. Number four, evaluate affordability. There's a general rule of thumb that you should never take more in student loans than your expected annual salary after school. For instance, if you expect to make $50,000 a year immediately following graduation, limit your total education debt to $50,000. And five, choose the right time. Just because you want to go back to school doesn't mean that now is the best time. Consider what you'd have to give up in order to have enough time to attend classes and study. Would you still have enough time for work and family obligations? In my book, Money Girl Smart Moves to Grow Rich, I recommend a strategy that I call the plan of thirds to make paying for education more manageable. The plan is to save one third of the cost before attending school, earn one third while attending school and pay the final third in student loans that you get during school but pay off after graduation. You can download two chapters from my book for free or buy the paperback or e-book when you visit my blog by the same name, smartmoves2growrich.com. No matter your professional or personal motivation for going back to school, make sure that you can complete the program on time and justify the price. Taking on too much education debt can be detrimental to your financial life, but taking the right amount can open career doors that make it painless to pay off. You'll get a lot more money, advice and tips when you sign up for the free Money Girl newsletter, join the Money Girl Facebook page or follow on Twitter where my username is @LaraAdams, L-A-U-R-A-A-D-A-M-S with NoSpace. To get links to everything I mentioned, there's a transcript of this show which is episode number 284 called Does It Pay to Go Back to School on the Money Girl page at quickanddirtytips.com. I'm glad you're listening to Qing. That's all for now. Courtesy of Money Girl, your guide to a richer life. (upbeat music) - Okay, wanna know where to find brands on brands on brands this fall? At Ross, mm-hmm. They've got big savings on the latest fall styles. Seriously, you'll find the brands you want at prices you'll love. At Ross, yes, for less. - At Capella University, learning the right skills could make a difference. That's why our business programs teach you relevant skills you can take from the course room to the workplace. A different future is closer than you think, with Capella University. Learn more at Capella.edu. [BLANK_AUDIO]