The simplest answer is calculate your return on investment.
Education is an investment in yourself
It’s “good” debt right? So treat it as such.
Note: I don’t believe any debt is good debt any longer, including buying a home, car or even higher education.
Student loans can sometimes be necessary debts, but not good debts. I hate that I thought it was good debt and I didn’t watch my spending as a result, thinking: Hey this is how everyone does it.
Simply put, if you can make more money than when you first started and if you can pay back your student loans (if any) within 5 years or so, then go for it.
Return on Investment (ROI) calculation:
- You earn $40,000 now.
- You need a graduate degree to rise in the ranks.
- It’ll cost $40,000 for a graduate degree and take you 4 years.
- Cost of living during those 4 years was $20,000 a year or $80,000 in total
- You will make $75,000 as a starting salary after you get your degree.
Total cost of your degree: $120,000
$75,000 (new salary) — $40,000 (old salary) = $35,000 extra made per year
$120,000 (cost of degree) / $35,000 of extra income per year = 3.34 years.
HOW ABOUT LOST INCOME?
Glad you asked.
To be even more conservative/crazy, you can also include lost income for those 4 years which is $40,000 x 4 years = $160,000, especially if you aren’t earning any income (some graduates do), and/or working a full or part-time job.
$120,000 (tuition & cost of living) + $160,000 (lost income for 4 years) = $280,000 cost
New total cost of your degree with lost income: $280,000
$75,000 (new salary) — $40,000 (old salary) = $35,000 extra made per year
$280,000 (cost of degree) / $35,000 of extra income per year = 8 years.
No single calculation will work for everyone
Everyone’s situation is different.
Maybe my calculated tuition is too high, or cost of living is too low. Just learn how to calculate your ROI, and if you can pay off your student loans in about 5 years and make more money, then go for it.
Just be sure you know what you’re getting into.
Just a girl trying to find a balance between being a Shopaholic and a Saver.
I cleared $60,000 in 18 months earning $65,000 gross/year.
Now I am self-employed, and you can read more about 
There is no limit in education and to take part in the world competition higher study is a must element. I guess study loan is a very good opportunity for the students who have the talent but not the ability to go abroad. And it be will more helpful for them if the interest is reasonable for that study loan.
These are extremely important considerations. I think a lot of people forget to calculate the ROI and simply go into the program! I have my Bachelors, MS, and MBA. I’m actually thinking about starting another master’s program (my company will pay for it). But haven’t decided if I’m up for it.
When considering a PhD, it was pretty easy to see that it wouldn’t pay for itself if I retired early, which was my original plan. I agree that no debt is good debt and that too many students think loans are inevitable and ‘OK’.
As to what people should study, I would hope there was an intersection of interests/passions, aptitudes and jobs/potential to be self-employed. I always thought this was the role of the high school counselor, to help students find this common area. I never yet met one that seemed to see it that way, though. They just seemed to think I needed help figuring out how to graduate high school, duh.