Should I take on additional debt to become a licensed professional?
January 17, 2014 11:02 AM   Subscribe

I have an undergraduate degree that is, for most practical purposes, "useless" in my field. A few people manage to get industry or service jobs, by having this degree, but that is not my area of interest. I want to return to school to get a professional master's degree that will also make me a licensed professional in the field. But, debt.

The problem is that I have a lot of debt related to getting my bachelor's. I have about $50,000 of debt (interest rates ranging from 5% to 12% annually.) My degree alone allows me to work for myself in my own business, but income has not been great. I've made between $18,000 - $28,000 net, annually, working for myself in the past few years.

This year is my last chance to apply for professional Master's degree programs that will also provide me a professional credential to enter a licensed profession. If I wait another year, I will have to retake some undergrad courses before I can go on. Unfortunately my undergrad GPA is just barely under the cut-off for the scholarship that would pay for a Masters program. Which means I will probably need to take out an additional $15,000 - $30,000 in student loans to get the degree, depending which program I get into. I may still be able to work for myself part-time, but there will be some lost income as well, for 1.5 - 3 years.

In return, the door will be opened to a licensed profession with a low unemployment rate in my area, and supposedly a good future outlook, where the average income is around $50,000 annually.

Is it a responsible choice, financially, to do this now, or would it be better to pay down current debt and take the longer route later?
posted by anonymous to Work & Money (7 answers total) 1 user marked this as a favorite
If you had a 100% chance of increasing your income from $25k to $50k in exchange for $30k in debt and two years lost wages at the current rate, then you're talking about $80k in costs for something that will pay $25k/year. Your investment should pay for itself in a little over 3 years. If you plan on sticking with this career for longer than that, then it'd be worth doing.

Now, there are other things to consider, like whether you could grow your small business to be making more than $18-28k/year in the same timeframe as going back to school (or if taking out a business loan for $15-30k might help more than schooling). It's also wise to consider that your chances of getting a $50k job after finishing this program are not 100%. How close are they? Are they 95% or 25%? That makes a difference.

If you're looking for an answer that addresses whether this is *financially* prudent, these are the sorts of questions to ask yourself.
posted by tylerkaraszewski at 11:08 AM on January 17, 2014 [4 favorites]

I think this all heavily depends on what field we're talking about, what the qualification is, and whether you could get it without going into another $30K in debt.

Are we talking library school? Probably not worth it.

Are we talking about an MBA? Might be worth it, especially if you can get your employer to cover part of the cost. I would probably only do an MBA if I were already working in a field where they are valuable, and specifically knew that in my particular situation, an MBA would be the right choice.

Are we talking about becoming a Nurse Practitioner or a CPA or some other eminently practical thing that is pretty much always going to be a good bet and lead to a large salary increase? In that case, yes, get the degree!
posted by Sara C. at 11:13 AM on January 17, 2014 [3 favorites]

If there were no time limit running out on your undergrad courses, would you undertake this degree now? Why/why not? How much would it cost you to retake those undergrad courses?

How much of your $50,000 in undergrad debt could you pay off in, say, the next two years? Because you're also going to be accumulating a lot of interest (maybe $10,000-$20,000?) while you're studying for that masters. If, realistically, you could make a big dent in that undergrad loan (either by growing your current business or temporarily taking one of those industry or service jobs), it might make more sense to wait.

Also, look really closely at the employment numbers. It's great if people in your profession have low unemployment, but what you really want to know is the employment/placement rate for entry-level professionals coming out of the program you're thinking about pursuing. There are a lot of professions where it's easy to get a job when you have five (or even two) years of experience, but where job opportunities for entry-level practitioners are terrible.
posted by mskyle at 11:22 AM on January 17, 2014

If this is accounting, MeMail me for some specifics, but the short form is that the better-paying CPA work has a lot of qualitative differences from the way you operate as a solo tax preparer/bookkeeper, and those differences don't suit everybody, so just be sure that's really what you want if it's what you're going to do.
posted by Sequence at 11:59 AM on January 17, 2014

Some things to point out:
Your 18-28,000 number is labeled as "net", but is your 50,000 gross? You need to compare apples to apples.

For the undergrad classes that you have to take to qualify for a paid Masters: how does the cost of those classes compare to the cost of the whole Masters? If you retake those few classes, does it reset the clock on all your undergrad classes or will they all still expire? (This is not a request for you to update this question via the Mods; it's just something for you to run the numbers and see if retaking the low-grade classes would make more sense).

Another thing that might help is to know how old you are. Some of the decisions in this thread only make sense if you have X more years to work at the (hopefully) high salary, but if you are already 55-ish, that might not be possible.
posted by CathyG at 12:30 PM on January 17, 2014

If this is speech language pathology, me-mail me!
posted by Ideal Impulse at 12:52 PM on January 17, 2014

I was going to say the same as Ideal Impulse, as I too am an SLP! So if you're thinking SLP or audiology, feel free to MeMail me as well.
posted by absquatulate at 5:26 PM on January 17, 2014

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