If you’re thinking about graduate school, you may be wondering when you should go. Is it better to go straight from college or wait and gain some work experience first? Both options have their advantages and disadvantages. If you believe that a graduate degree is in your future but are not sure whether now is the time, here are some financial and other factors to consider.

Getting an advanced degree may boost your earning potential, career advancement, and job security.
Going to graduate school immediately after earning your undergraduate degree can keep your momentum going and often allow you to defer your undergrad loan payments.
However, working for a few years before you go also has advantages, including the ability to save up some money to pay the bill.

If you’re questioning whether to go to grad school at all, consider the potential financial benefits once you’ve completed your program. According to Bureau of Labor Statistics (BLS) data, each step up in education means a higher salary and greater job security, on average. For example, high school graduates with no college in 2019 had median weekly earnings of $746 and an unemployment rate of 3.7%. Workers with a bachelor’s degree earned a median of $1,248 and had an unemployment rate of 2.2%. Those with a master’s degree had median earnings of $1,497, with an unemployment rate of 2%.

That can be a powerful argument for attending graduate school. But it does not necessarily mean that doing so immediately after receiving a bachelor’s degree is the right course. While a handful of fields require a graduate or professional degree as the price of admission, in many others, a bachelor’s degree is sufficient for an entry-level job.

Here are some pros and cons to consider in making your decision.

It may be easier to make the transition to grad school without taking a break. Consider the fact that you’re accustomed to studying and test-taking, as well as living the far from lavish life of a typical college student. A couple of years in a comfortable job, on the other hand, could dull your study habits and accustom you to a higher standard of living.

If you take a break from education, your life may change in unforeseen ways. You might get married, have children, buy a home, or take on new responsibilities that will make attending and paying for graduate school even more challenging.

If you racked up a lot of federal student loan debt as an undergrad, one way to postpone repaying in some cases is to continue your education and obtain a student loan deferment. Of course, the downside is that you’ll probably take on more debt for grad school and you’ll have to start paying it all back sooner or later.

To find out how much you might qualify to borrow as a graduate student, you will need to fill out the same form you may have used as an undergraduate, the Free Application for Federal Student Aid (FAFSA). This time, however, you most likely won’t be required to supply information about your parents’ finances because you’re now considered an independent student.

Graduate students are eligible for two types of federal loans: direct unsubsidized loans (for up to $20,500 per year, more if you’re enrolled in certain health profession programs) and direct PLUS loans if you need to borrow more than that. Unlike undergraduates, graduate students are not eligible for subsidized loans.

Grad students may also be eligible for a paid federal work-study job, as well as for financial aid from their state, school, or private programs.

If you can get an employer to foot the bill for graduate school, the first $5,250 of that benefit is tax-free.

You probably deserve some time off from midterms, all-nighters, and cold pizza after you complete a four-year undergraduate program. And graduate school isn’t cheap. While the pricetag varies widely from school to school and program to program, the average graduate student with a master’s degree now takes on $55,376 in debt in order to pay for it, according to EducationData.org.

A couple of years of work could help you save up and pay for your next degree without taking on unnecessary debt. And you’ll also make a dent in what you already owe.

What’s more, once you’ve spent some time in the workplace, your interests and ambitions may evolve. It might be better to discover your true vocation before you invest in a graduate degree in the wrong field. You might still end up in grad school, but studying something completely different.

With a little added maturity, you will bring more to graduate school and most likely get more out of it. Some work experience on your resume could also be a plus, both when you apply to grad school and when you finish your degree and are job hunting once again.

What’s more, many companies will subsidize–or completely pay for–graduate work, particularly if your training is in their interest. According to the Society for Human Resource Management, 49% of employers were offering tuition assistance for graduate school in 2018, with many seeing it as a way to retain their most promising employees.

What’s more, under Internal Revenue Service (IRS) rules, you can exclude up to $5,250 in employer-provided education assistance from your income if your employer’s program qualifies. You’ll owe some income tax above that amount, but it’s still a better deal than paying for grad school all by yourself.

Whether you decide to pursue a graduate degree immediately after college or wait a while before going can depend on the state of your finances, your area of professional interest, and your instincts. Don’t rush to go if you don’t feel ready. On the other hand, if you are offered a tempting fellowship, it might be worth heading straight to grad school, particularly if you are targeting a field that requires further years of study toward a Ph.D.


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