Getting a graduate degree doesn't always mean a bigger paycheck. Learn how going back to grad school will affect your finances before you commit with our grad school ROI calculator.

Are you considering going back to grad school? Have you wondered if the graduate degree you’re looking at will give you a good return-on-investment (ROI)?

It’s important to consider the full cost of graduate school (and its potential impact on your career and earning potential) before you blow $1,000 on test prep, entrance exams, and application fees, and certainly before you send off a deposit and give notice at your job. Our graduate school ROI calculator (below) can give you a sense of what you stand to get (and give up) by going back to school.

What will graduate school get you?

Why do you want to go to grad school in the first place?

  • Is it because you’re passionate about a particular career, and grad school will help you get started?
  • Is it to advance further (and make more money) in your chosen field, such as business or journalism?
  • Is it because you just don’t know what you want to do and feel like graduate school will give you direction, however temporary?

Although statistics show people with graduate degrees earn more, on average, than workers without them, going to graduate school does not guarantee you a higher salary. It helps to have a clear idea of the kind of job you eventually want, what that job pays, and whether you truly need the advanced degree to get there.

Taking a look at some cold, hard numbers can force you to be honest with yourself about what grad school can and can’t give you.

How much will grad school cost?

Graduate school tuition varies widely by program, but we roughly estimate average graduate school tuition to be $30,000 a year at a public university and $40,000 a year at a private university. Financial aid and grants can reduce these costs, of course. But the bill is still hefty. In 2014, the median indebtedness for an MA degree was $57,600, according to The New America Foundation.

And that’s just paying for the right to attend classes. That doesn’t include the myriad fees that are tacked onto almost any tuition bill, the costs of materials, or your living expenses, which can vary wildly depending on the city where your program is based. (Going to school in New York or San Francisco, for instance, costs a lot more than going to school in Atlanta.)

Consider carefully how you’ll pay for those living expenses while you’re in school. Do you have savings? Will you work, either part-time or full-time? Or will you need to borrow additional loans specifically to cover your living expenses?

What are you giving up?

When calculating the cost of your degree, you have to consider not only tuition, fees, and living expenses, but also the opportunity costs.

Opportunity costs are whatever you’re giving up to pursue a particular path. Opportunity costs, in this case, are the income (not to mention benefits, retirement contributions, and the additional interest those contributions aren’t earning because they aren’t in your account) you’re giving up to pursue your degree. Even if you luck out and end up at a great program with an assistantship that pays for tuition and provides you with a stipend for living expenses, you’re still not really going for “free.”

That’s not to say, however, that you shouldn’t go. Graduate school, for all its expense, has the potential to greatly increase your earnings over the course of your career, and also often provides less easily quantifiable benefits, like a broader social network and significant personal enrichment.

But it’s important to know what to expect from graduate school, both in the sense of what you can expect to pay, and also what you can expect to receive. Our grad school calculator can help you get a sense of both.

Is graduate school a good financial decision?

You can use Money Under 30’s grad school ROI calculator to estimate your return on investment from going to graduate school. To use the calculator, you’ll need to know:

  • A reasonable estimate of what you’ll earn at your first job after graduate school.
  • The annual cost of graduate school tuition and living expenses.
  • An estimate of how much money you’ll need to borrow.
  • Optional: The interest rate on the student loans and how long you’ll take to pay them off. (Otherwise we use 6% and 10 years as an average.)  Keep in mind that you can later refinance using a service like Credible and cut down on some of that interest.


Saving Money on Your Loan Payments

Many graduates don’t realize this, but you aren’t stuck with the interest rates you’re quoted when you take your student loans. At any point after you graduate, you can refinance your loan and lower your rates and/or extend your time to repay it.

When you’re ready to refinance, it’s important to shop around to make sure you’re getting the best deal. A service like Credible can help with that. Credible gathers quotes from up to seven lenders to ensure you get the best deal. This will help boost the ROI you get on that degree, allowing you to pay less in interest over the years you’re repaying it.

Credible Credit Disclosure - To check the rates and terms you qualify for, Credible or our partner lender(s) conduct a soft credit pull that will not affect your credit score. However, when you apply for credit, your full credit report from one or more consumer reporting agencies will be requested, which is considered a hard credit pull and will affect your credit.

Grad school ROI calculator

How to use the grad school ROI calculator

  • Enter your age.
  • Enter your current salary (so the calculator can include opportunity costs).
  • Enter the total cost of graduate school for one year. Add together the following to get a rough estimate:
    • Total tuition you’ll have to pay at the university of your choice, plus any fees. (This can usually be found on the university’s website.)
    • Your cost for books or other materials. (For an MFA in creative writing, this will be almost nothing; for a law degree, a year of books might set you back $1,800. Do a little searching to find a rough estimate.)
    • Living expenses. (If your plan is to stay in your current city in your current place, your own prior spending should be a rough guide. If your dream school is elsewhere, consider browsing apartment listings and roommate ads to get a sense of how much you’ll have to pay for rent. Then factor in utilities, transportation, food, and entertainment. Your current budget might be an okay place to start, but you should definitely cut costs once you’re in school and living on loans….as this calculator will make clear!)
  • Enter the length of your program (in years).
  • If you want to opt for the advanced settings, enter the amount of students loans you expect to take out, along with the interest rate and term of the loan. Otherwise, we’ll use 6% and 10 years as an average.
  • Enter your expected salary upon graduation. It pays to get specific here: Don’t just look for the average salary for your profession, but for the average salary of that profession in the region you intend to live in. Lawyers in New York make a lot more than lawyers in Tampa. Be sure to use a reasonable first year salary, not what you hope to make after five or 10 years in the field.

Once you hit submit, we’ll calculate the following:

  • The total cost of graduate school, including opportunity costs, tuition and fees, and loan interest.
  • Your lifetime earnings at your current salary, as well as your lifetime earnings at your projected post-graduate school salary.
  • The age at which your graduate degree will “earn out,”— that is, the age at which you break even, where your increased annual salary makes up for the cost of grad school, and your total earnings surpasses what you would be making had you not gone to grad school.

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About the author

Total Articles: 26
Lauren Barret is a staff writer at Money Under 30. She has an MFA in creative writing from The Ohio State University, and a BA from Kenyon College. She lives in Portland, Maine.