
When Going Back to School Makes Financial Sense
In certain scenarios, going back to school can be a smart financial move that pays off in the long run. Here are key situations where continuing your education might be worth the investment:
1. If You’re Close to Completing a Degree
If you’re just a few classes away from earning a degree, finishing up makes a lot of sense. Many jobs require a college degree as a baseline qualification. Completing those final credits can unlock opportunities and increase your earning potential without significant additional costs or time commitment.
If your employer is willing to foot the bill, take advantage of it!
2. If Your Employer Will Pay for It
Some companies offer tuition reimbursement as part of their employee benefits package. If your employer is willing to foot the bill, take advantage of it! However, make sure you understand the terms of the program, such as which courses are covered, how much is reimbursed, and whether you’ll need to stay with the company for a certain period afterward.
3. If You Can Secure Grants and Scholarships
Grants and scholarships are a fantastic way to fund your education without taking on debt. Unlike loans, these financial aids don’t need to be paid back. Apply for as many as possible—you might qualify for enough to significantly reduce or even eliminate tuition costs.
4. If You Can Work While Studying
Balancing work and school is challenging but achievable, especially with the flexibility of online and weekend classes. If you can maintain an income while pursuing your degree, you’ll minimize financial strain and avoid losing valuable work experience.
5. If You’re Fully Prepared for the Commitment
Going back to school is a significant investment of time, energy, and resources. Before enrolling, ask yourself:
- Are you ready to attend classes and study consistently?
- Can you balance school with your personal and professional responsibilities?
- Are you financially prepared to handle tuition and any potential income loss?
If your answers are "yes," and your job prospects improve significantly with the degree, going back to school could be a wise choice.
When Going Back to School Doesn’t Make Financial Sense
In other situations, the financial benefits of further education may not outweigh the costs. Here’s when going back to school might not be the best decision:
1. If You’re Happy in Your Current Position
If you’re content with your current job and don’t see a need for career advancement, the financial advantages of earning a degree may be limited. Staying where you are might be the better option, especially if you already enjoy job satisfaction and stability.
2. If You’re Close to Retirement
Returning to school later in life can be financially risky, especially if you need to quit your job to attend classes. Lost wages combined with tuition costs can take years to recoup, which may not make sense if you’re nearing retirement.
Consider this example:
- Current salary: $35,000/year at age 50.
- After earning a degree: $55,000/year for 13 years (to retirement).
- Total costs: $140,000 in lost wages over 4 years + $60,000 in tuition = $200,000.
Even with the higher salary, the financial gains may be minimal over time. Perform similar calculations for your own situation to determine if the investment is worth it.
How to Make an Informed Decision
Before committing to further education, ask yourself these questions:
- How much will tuition and fees cost?
- Can you afford the potential loss of income while studying?
- Will your degree significantly increase your earning potential?
- Are there other ways to achieve your financial goals, such as pursuing a promotion, certification, or side hustle?
Final Thoughts
Weigh the Costs and Benefits
Going back to school can be a financially wise decision in the right circumstances. If you’re close to completing a degree, have employer support, or can secure funding through grants and scholarships, it can open doors to new opportunities and higher earnings. However, it’s essential to consider the full financial picture, including tuition costs, lost wages, and how long it will take to break even.
Remember, education is an investment in yourself—but like any investment, it’s important to make smart, informed choices that align with your goals and financial situation.