Is Grad School Worth the Investment?

Graduate school in the United States is profoundly expensive. According to the Urban Institute, grad school costs on average $13,770 out of pocket each year (post-discounts), with Ph.D. costing the least out of pocket ($8,480/year) and law costing the most ($20,360/year).

Most of us go to grad school for one simple reason – to earn those precious green backs. We anticipate that by furthering our education, our earning potential will rise, and thus in the end all the work will pay off. Well that is goal anyway … the question is whether it is a myth or a reality?

Grad School is Worth the Cost – the Traditional Argument

“An investment in knowledge pays the best interest.” – Ben Franklin  

It’s hard to deny that education yield significant financial rewards. Georgetown recently reviewed some of the hard numbers on this question recently that, as you’d expect, with more education comes a larger lifetime earning potential.



on this data alone, it is clear from a statistical standpoint that for an average worker, who plans to work for a normal period of time, and completes grad school during their relative youth, they are likely to have a moderate to high level of return on their educational investment.

But the numbers only tell half of the story…

The Downside of Grad School

The key financial benefits of grad school go to the “typical” or better individual. That’s because statistics like these reflect what an average outcome is, but there will always be people receiving higher and lower returns than the average, or similar returns at a much higher cost!

For example, the offer I received from “Big Law” was $180,000/year starting plus $20,000 annual bonus. That is way above the norm. On the other end of the spectrum there are many people with graduate degrees in a low demand (art) or highly competitive/saturated markets (legal careers fall here too) who face a real risk of their graduate degree costing much more than the return in the short-medium term.

For this reason, the first thing any potential graduate student should do is spend time conducting their due diligence on schools and potential areas of study to make sure their choice is viable and will be profitable in the future. Going back to the law example, anyone that looks at the legal market would realize that you either need to:

  • Go to a top 10 school and be willing to have “Big Law” grind you down for a few years to pay back your loans
  • Get scholarships to cover the costs (relatively easy if you can reach a high LSAT score)
  • Be willing to work in public serve for 10 years – and understand the strict conditions this requires – and the risks that go along with this approach! (hint: the government wants to eliminate loan forgiveness)
  • Be wealthy enough to make the high cost irrelevant

Each of these approaches have pros and cons, but because a graduate degree will likely cost you more than nearly any other purchase you will ever make besides a home, so you must do your due diligence! If you don’t or aren’t capable, you should probably rethink the idea of going to graduate school all together.

Another potential downside of graduate school is the time and energy required to compete a degree. If you are considering grad school while working full-time, doing double-duty is very challenging and can put stress on your health and marriage. When I was working full-time at a high stress job, attending class four nights a week, and studying 20 hours each weekend, I hardly ever saw my wife. We did Friday date night … that was it! I’m glad we survived this era of our life together, but it surely wasn’t ideal, and this stress will never show up in a compensation cost/benefit analysis. Similarly, weight gained while being stressed may literally shorten your life… obviously not a great thing.

Another risk is that you may not finish your graduate degree, thus incurring cost without any financial reward. You can limit this risk by being prepared and doing your due diligence, but you can’t plan on everything.

So Is Grad School Worth The Price?

The answer: it depends!

I know you were hoping for something more black & white – but what can I say – I’m still a lawyer at heart. It depends keeps us in business! The more you can be certain your degree will provide you with career advancements, and if you can mitigate the cost and associated risks, the more likely the answer is yes. But if you’re looking to leave your career (and associated salary) to get an expensive shiny degree from a private (or even many public) university that produces little to no direct salary/career implications, then probably not. This is especially true if you’re looking to F.I.R.E. and the ROI isn’t immediate and extremely high.

Case Study: Ms. D.I.N.K.’s Ed.D.

My wife recently decided to go back to school to get her doctorate in education, after receiving a masters from a prestigious university about 5 years ago. The total cost for her new degree: $55,000. This is a moderately priced program. Some others in the same field cost less, while others cost much more.

Here were the relevant factors that we considered while making this decision.


  • Lend her credibility in her field
  • Opportunities to teach at a University, be a traveling consultant speaker, and serve as a school superintendent
  • Employer might help cover some of the costs
  • Enjoys school (sad, I know)
  • Networking opportunities


  • Cost, obviously
  • Time – lots of time – for an already busy woman
  • Opens many doors but little immediate salary impact
  • F.I.R.E. timeline of 7 years

In the end, it was my wife’s decision, and she decided to start her program this fall. Why? Because after carefully weighing our options together, it was worth it to her.

Big decisions like this are highly personal and often emotional based. Fortunately, our salaries allow us to cover the cost of tuition out-of-pocket, so there is little risk. She’s happy, so I’m happy, and I’m happy that we put a lot of thought into this decision before moving forward on this. Will it be worth it financially in the end? Only time will tell …

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