Can You Afford to Go Back to School?

Can You Afford to Go Back to School? article image.

The pandemic encouraged many Americans to rethink their careers due to job loss or lack of fulfillment at work. That has led to increased demand for certain degrees, especially those that offer the chance to build skills that can help workers withstand an economic downturn.

For example, 67% of graduate business schools in the U.S. received more applications in 2020 than they did in 2019, according to a survey by the Graduate Management Admissions Council. In 2019, only 37% of U.S. business schools said they received more applications than in the prior admissions cycle.

But going to graduate school or completing an unfinished bachelor's or associate's program can be a big financial commitment. Here's how to know if it's the right choice, and how you can make it more affordable to get a degree.

When to Consider Going Back to School

For most adults thinking about pursuing a degree, the potential to increase their salary is the top consideration. But while more education typically results in higher earnings, that doesn't mean forgoing income while in school or taking on student loans is always a good idea. Instead, zoom in on your own goals and desired major to identify whether getting a degree is likely to improve your earnings potential.

For example, it's especially worthwhile to get an associate's or bachelor's degree if you don't already have one, or if you took college classes but didn't graduate. That's because the median lifetime earnings of someone with a bachelor's degree is more than double that of a high school graduate, according to an analysis by the Brookings Institution. Median lifetime earnings for a bachelor's degree holder are about 70% higher than for those who went to college but didn't earn a degree.

But there are also plenty of high-paying jobs that require only a high school diploma, though they often require lengthy on-the-job training or certifications. Commercial pilots, detectives and power plant operators, for example, all earned a median annual wage of $80,000 or more in 2020, according to the U.S. Bureau of Labor Statistics (BLS).

To fully understand the potential return on investment of an associate's, bachelor's or graduate degree, check the average salary for that industry in the BLS' Occupational Outlook Handbook. You may find that for your ideal job, an associate's degree or training program will be sufficient, or that completing a bachelor's or master's will give you the greatest career mobility and earning potential.

How to Weigh Your Education Options

There are more ways than ever to return to school, especially now that remote learning has grown substantially in accessibility and quality. Start by identifying your ultimate goal or your dream job and the type of degree you need to get it. Then consider your options:

  • College or university: Traditional educational pathways include in-person courses at community colleges and four-year colleges and universities. More and more schools offer reputable online options, as well, and online platforms like Coursera now also include cost-effective bachelor's and master's degree options in partnership with universities.
  • Certificate program: Community colleges often provide non-degree certificate programs in careers such as massage therapy and dental assisting that don't necessarily lead to an associate's degree, but that could provide a solid salary upon completion. Attending a software development bootcamp is another non-degree option that can help you change careers and secure a salary boost. Bootcamps are available through both private companies and colleges, and may offer a payment arrangement called an income share agreement.
  • Apprenticeship: You could also pursue an apprenticeship, which offers paid on-the-job training in on-demand occupations.
Average Cost of Various Education Options
Type of ProgramAverage Tuition and Fees
Non-degree certificate programTotal cost ranges from $1,000 to $20,000 depending on institution, location and program
Software development bootcampTotal cost ranges from $15,000 to $20,000
ApprenticeshipNone; you are typically paid for your work
Public two-year (community) college$3,770 per year
Public four-year college, in state$10,560 per year
Public four-year college, out of state$27,020 per year
Private nonprofit four-year college$37,650 per year

Sources: Best Colleges, College Board

How to Pay for School

Coming up with the money to attend school can be a big challenge, especially if it requires you to scale back your working hours. But there are many sources of federal, state, school and private scholarship aid available, and there are ways to maintain a source of income while attending school too.

If you're planning to go to a community college or four-year college, it's crucial to fill out the Free Application for Federal Student Aid (FAFSA), which will make you eligible for federal, state and school grants you don't have to pay back. You can also get access to low-cost federal student loans and work-study funds by submitting the FAFSA.

When looking into student loans, it's typically best to opt for federal loans instead of loans from a private lender. Federal loans have lower interest rates and more generous repayment options. Before you borrow, make sure your loan payment will be able to fit into your budget by using a tool like the federal government's Loan Simulator that'll help you determine how much you'll likely pay toward student loans each month.

Additional ways to make school more affordable include:

  • Explore scholarships specific to your situation. Check scholarship search engines, and your school's scholarship database, for funds specifically allocated to graduate and returning students. Some scholarships are offered to students with specific majors or career paths, so keep that in mind.
  • Ask your employer about tuition reimbursement. Your company may have a program in place that helps pay for your education while you are employed. Check the guidelines to see whether only specific courses of study are eligible or if you must continue to work there for a period of time after graduation.
  • Consider part-time programs. Many programs, especially those available online, allow students who have families and work responsibilities to study on a flexible schedule. That can help you continue to earn income while you study.

Ensuring you can pay for a degree without taking on overwhelming debt is an important part of the journey, and so is determining your likely salary boost after graduation. As you work to balance your education and finances, keeping an eye on your credit can make it easier to accomplish your long-term financial goals. When you've chosen a program and payment strategy wisely, going back to school isn't just a major commitment—it's also a source of pride.

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