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Dear Liz: As a student I was not aware of finances as much as I should have been and borrowed too much. I have about $60,000 in student loan debt plus an $11,000 car loan. I am contemplating going back to school because the job I really want — to be a counselor — requires that I have a master’s degree. My friends say I’d be crazy to go into that field because the pay isn’t that high and I would most likely incur more debt. I am hoping to get scholarships and grants or pay out of pocket as I go. I currently pay all my bills and am really tight with spending. I want to take this leap without destroying my financial future. Any advice?

Answer: In general, you shouldn’t borrow more for an occupation than you expect to make the first year out of school. If you check the U.S. Department of Labor Statistics, which tracks pay for various occupations, you’ll see that the median wage for counselors depends on their specialty (vocational counselors get paid more than rehab counselors, for example), but the median wage tends to be in the $30,000-to-$50,000 range. Expect your starting salary to be somewhat lower.

That doesn’t mean you can’t go back to school, but you probably shouldn’t take on more debt to do so. You can apply for financial aid but expect stiff competition for grants and scholarships — most aid comes in the form of loans. Your best bet may be to attend a public college, perhaps at night so you can keep your day job. For more on attending college without loans, read Zac Bissonnette’s “Debt-Free U: How I Paid for an Outstanding College Education Without Loans, Scholarships or Mooching Off My Parents.”

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Liz, while not borrowing more than you could make back in your first year might be ideal financial thinking, I just don’t think it can actually happen with current tutition prices for graduate education. Example, I went to dental school to become a dentist. Depending on the school, the four year education can run someone anywhere from 125K to 320K. Now, no matter how amazing a dentist you are, your first year out of school, its doubtful anyone would take home more than 150K after other expenses. And in this economy, many of my peers are making below that, even 4-5 years out of school. The same goes for lawyers and law school. I know law students that have graduated in the past couple years that have been unable to find any paying jobs. Yes, there are some scholarships out there, but they’re less plentiful than in undergraduate education. I chose to do a military scholarship which brought my tuition down immensely, but of course incurs other obligations. Your advice makes sense for those who want to pursue a Ph.D in art theory or psychology. But for professional degrees, potential students should be prepared to face huge debt and possibly not pay it off for years. Do we stop producing these occupations though?


That’s why I qualify it with the word “generally.” If your earning power will rise sharply within a few years of graduation, taking on more debt can make sense.