Think before you apply

My sister graduates from college this year.  For a while, she’s been planning to finish her business degree and then go back to school for a nursing degree.  She decided too late in her college career to easily switch over, and her university doesn’t offer a nursing degree, so it made the most sense finish the degree she’s working on and then go back for nursing.  There are a few programs out there for students who already have a bachelor’s degree, so that’s her goal.   She’s going to move back home, work part-time, and go to school.  It’s a good plan that everyone’s happy with.

But I digress.

While talking to her, I learned that a number of her friends are also planning to continue their education after graduation, most in the form of some sort of graduate school.  I told her I was a little surprised at that, but it turns out that most of her friends realized they couldn’t find a job, so they just decided to get graduate degrees.

I can’t say I think this is a good idea.  If you are sure that you want to get an MBA or be a lawyer or a doctor, then sure.  Go to graduate school.  You’ll come out with lots of loans, but you’ll have the degree you wanted and hopefully be able to find the job you want.  But going to graduate school just because you can’t find a job now and hey, law school seems fun is a bad plan  (Note: law school is not fun.  I learned a lot and enjoyed the subject matter, but I wouldn’t call it “fun.”  Or easy.)

For one thing, there’s no guarantee that there will be jobs in one or two or three years when the student finally finishes their graduate degree.  Again, if it’s what you want to do, that’s another story.  Then there are student loans to think about.  I had a classmate in law school who had no desire to be a lawyer, but he got a full scholarship from the school, so he decided to give it a shot.  He dropped out sometime during our first year, and all that scholarship money went to waste, when it could have gone to a student who truly did want to study the law.  Most of my friends graduated with over $100k in student loan debt, many of them with over $200k in student loan debt.  It takes a long time to pay off $200k.  Unfortunately, many of my friends, who are now second year associates in law firms, have been downsized.  It’s especially hard to pay off $200k when you’re working part-time at a bookstore.  Again, the economy will pick up, and for most people, they want to be lawyers, so they’re volunteering with pro bono legal services to keep their skills up and really enjoying the opportunity.

My roommate is currently a student, and while I’m not sure of her loan numbers, she commented that if she pays $600 a month in loan payments, she might be able to pay off the loans in 10 years.  There is a myth that people with graduate degrees will easily be able to pay $600 in loan payments.  Not when you work for the government like I do and like she hopes to.  It’s doable, but it’s not fun.

The point of this rambling entry is to say that I think graduate degrees are great, if you want to get a graduate degree.  Beachgirl recently started law school (and I still cringe when I see “Civil Procedure” on her to-do list), and she really put thought into it before she decided to go.  I’m sure things will work out for her, because she knew what she was getting herself into.  I just wonder if all these young 20-somethings just finishing school are in the same boat.

Megan Smith

Megan is a 30-something government employee in the Washington, DC area. She got interested in Personal Finance when she got out of college and realized that her paycheck wasn’t going to go as far as she had hoped. Since starting this blog, she has managed to buy a house and make a solid start on her retirement goals, and hopes to help others do the same. Here is her story:

In 2007, I was a gainfully employed 20-something with no debt but not a lot of knowledge about personal finance.  It was a co-worker’s comment about Roth IRAs that sent me to the internet, searching for information.  It was then that I realized that I really didn’t know a whole lot about personal finance and that my current financial situation was due a lot to inherent frugal tendencies, generous family members, a fear of debt, and good luck.  While that was working for me, clearly I needed a better plan.

While I had no debt, I was also pretty much living paycheck to paycheck and not worrying about going over budget (I say this as if I had a real budget) because I had an emergency fund set aside to cover any overages.

Except that’s not what an emergency fund is for.

So I did a lot of research, read a lot of blogs, and decided that I needed a plan.  I needed to budget.  I needed to know what I was spending my money on.  I needed to prepare for the future.

I decided to create a blog not only to make myself accountable to others but also to share the knowledge that I gained along the way.  I’ve learned so much from my fellow bloggers, and I hope that my readers can find something useful in what I have to share as well.