Should you take a loan to get additional schooling? It's a tough decision. First things first you need to figure out if the extra degree is worth it? Will it provide enough additional income to cover the costs of school, extra interest on your existing school loans, and the lost income while you are in school. If you decide it is worth it, then you need to decide if you should borrow more money to make it happen.

Occasionally I publish answers to select readers’ money questions. I welcome your opinion in the comments. Send questions to [email protected]

Q: I am 27, married, and my husband and I have a combined student loan debt of about $100,000. It’s daunting to type that out. I have a Master’s Degree in Social Work and my husband is in graduate school for Occupational Therapy. (Yes, I know we’ll never be wealthy).

I was accepted into a PhD program for Public Health; it’s fully funded plus a very small stipend. I will likely start in the fall and my husband and I will both be in school for about two years before he graduates. During those two years we’ll make a very modest combined income of $1,500 a month; not enough to live on.

We only have $10,000 in savings. Should we draw down savings to supplement our income for the next two years (it should be enough) or take out an additional student loan for living expenses? Or is it just stupid to be going back to school at this point? –Katherine

A: $100,000 is a lot of student loan debt. Unfortunately, it’s not uncommon. In fact, undergrads who graduated in 2010 had average student loan debt of over $25,000.

For you, the bad news is it will take a long time to pay those loans off. The good news, hopefully, is that you and your husband will have degrees that should be in demand for years to come even if the fields are’t especially lucrative.

Of course, whether or not to pursue your PhD is a tough question to answer on financials alone—you’ll inevitably be emotionally involved in the decision.

To determine whether or not the degree is worth it, you should consider not only how much (more, hopefully) you’ll earn over your lifetime with a public health PhD versus a master’s in social work, but also the job prospects for graduates of your program. Is there a chance you’ll spend many years on the PhD just to take a master’s level social work job anyway? Remember that during that time you won’t be earning money and the interest clock on those existing student loans will be ticking. 

If you decide to go for the PhD, I would take out another student loan for living expenses rather than draw down your limited savings.

If that seems strange, remember that you’re counting on that $10k to make ends meet for two years. What happens, then, if you face a big unexpected expense? Most likely, you’ll turn to credit cards at a much higher APR than a student loan. It’s always good to have a little bit of cash in the bank. And, if you need to move after your PhD, you’ll have some money to do that. (This is similar to why I recommend people save and invest before making extra student loan payments.)

You may be hesitatnt to take out another loan with $100,000 of debt already, but remember that money is already gone. Hopefully your PhD program will provide better lifelong earning prospects than you have with your current degree, and because the program is paid for, a small loan for living expenses should be a good investment in your future.

That said, if your career prospects upon graduating with the PhD are iffy or the potential jobs do not pay much more than you could currently earn, however, I’d take a long, careful look at whether the degree is a good idea.


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