Checklist: Should You or Your Spouse Go Back to Grad School? 5 Money Questions to Ask First

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We know: The idea of getting an MBA, MFA or Ph.D. just sounds so … scholarly. But going back for an advanced degree can have potentially big implications for your financial life—both good and bad.

Depending on the program you’re applying to, being able to add those few extra letters to your résumé could provide a big career boost—or it could saddle you with debt that may take years, or even decades, to pay off. And unlike when you were an undergraduate, it’s probably the case that you won’t have relatives helping you foot the bill.

The choice gets even harder to make once you get married, because your time and resources are no longer just your own. How will going back to school affect your family’s finances? What sorts of sacrifices will you all have to make in the short term—and will it ultimately pay off in the end?

We know this is no easy decision to make, and it’s something you have to discuss as a team. So we rounded up some of the most important questions to tackle as a couple if either you or your spouse are thinking of going back to school, so you can help ensure you’re making a smart decision for the whole family.

What’s the professional ROI of going back to school?

For the 2014 to 2015 school year, the average cost of graduate school tuition and fees was nearly $11,000 for public institutions and more than $23,000 for private ones, according to the National Center for Education Statistics.

Multiply that by two or three years, and the total becomes a pretty hefty investment to make if you’re unsure of the return you may get. So if you or your spouse are contemplating going back to school, it’s important to understand what you’re hoping to gain from that second degree, particularly if your motivation is to boost your earning potential.

It’s worth taking the time to research the average pay and salary potential for a new desired career (sites like Payscale can help with this). If the field you’re looking to get into isn’t necessarily high-paying, “then it might be worth considering how many years it will take to break even on the cost,” suggests Deacon Hayes, a financial coach at Well Kept Wallet. “Then you can make an educated decision as to whether or not it makes financial sense to go back to school.”

It would also be useful to see whether there are cheaper educational alternatives that can teach you the skills you’re looking to learn without the high price tag, Hayes adds. For example, if your desired job doesn’t necessarily require a graduate degree but does require some specialized knowledge, you may be able to take the appropriate classes for cheaper through your local community college or through lower-cost online platforms like Coursera, Lynda or General Assembly.

RELATED: Calculating College ROI: How to Tell if You’re Getting the Best Bang for Your College Buck

What will our true cost of education be?

The total price of a grad school degree doesn’t lie just in the tuition and books; there are also hidden costs to keep in mind, not the least of which is potentially losing the income of a spouse who has to quit a job or scale back at work to become a student again—along with any benefits that job may have brought with it (think health insurance, dental benefits, retirement contributions, etc.).

But even if the returning spouse held mostly household responsibilities, there’s still the question of whether “the other spouse is going to be able to pick up the extra responsibilities around the house—housework, taking care of the kids, etc.,” says Joseph A. Carbone Jr., CFP®, managing partner at Focus Planning Group in Bayport, New York. If not, costs like child care may have to be incorporated into the grad school price tag.

If you don’t have a savings stash built up specifically to cover tuition and these other forms of out-of-pocket costs, you and your partner will have to start researching what combination of options you have. These could include student loans, scholarships, part-time work, work/study programs or even whether your current job offers any tuition reimbursement, Carbone adds.

RELATED: 4 Tips to Negotiate Your Way to a Better Financial Aid Package

How much in student loans are we willing to take on?

Speaking of student loans, graduating with a hefty amount of debt is more the reality than the exception these days. But just because it’s the norm doesn’t make it beneficial for your finances. This means having some serious talks about how much of a debt load you’re willing to take on as a family, particularly if you still have undergraduate student loans you’re trying to pay off.

Fortunately for graduate students, government-subsidized Stafford and Grad PLUS loans generally have higher borrowing limits for graduate students than they do for undergraduates (although the aggregate amount you can borrow in Stafford loans—$138,500 for grad or professional students—includes what you took out as an undergrad). This means that grad students may have to rely less heavily on private loans, which may have higher interest rates than federal loans and likely won’t offer the same types of flexible repayment, such as income-based repayment plans.

Still, even with favorable loan terms, you and your partner need to agree on guidelines that can help you determine how much debt is too much. Carbone, for instance, suggests borrowing less than what your starting salary will be post-graduation. “This way, in most instances, you will be able to pay off your loan in approximately 10 years,” he says.

Another tip? Try not to borrow more than you actually need to cover your basic school and living costs. “It can be tempting to take a larger loan to have some disposable income, but the results in later years are not pretty when you start calculating interest,” Carbone adds.

To get a better sense of the monthly payments you may be expected to make on a potential loan amount, plug in your estimates into this calculator from FinAid.org.

How will we need to adjust our budget?

As we already mentioned, the total cost to you and your spouse of returning to school is greater than the bill you receive from your local university. If you expect your income will change when school starts, it’s time to break out the calculator and determine whether what you spend on your fixed and flexible expenses may need to change as a result of your reduced take-home pay.

So sit down with your partner and comb through your budget together to see where you can pare back. Are there subscriptions you can downgrade or eliminate completely, like a pricey gym membership, your cable television package or a fully loaded cell phone plan? Or will you have to commit to more cooking-at-home nights than in the past?

If those types of cuts don’t seem like enough, you may have to consider more drastic short-term sacrifices to adjust for a smaller cash flow, such as taking on a roommate or temporarily relocating to a cheaper area.

And to ease into the idea of living off a smaller budget, “learn to live on one income way before you start grad school,” suggests Hayes. “This way you are used to the lifestyle … and it’s not a shock to the system.”

RELATED: The One-Number Strategy: A New Approach to Budgeting

How will going back to school impact our other money goals?

At the end of the day, it’s important to keep the big picture in mind when trying to gauge the impact of going back to school. For instance, if you and your spouse have been wanting to save up for a home, ramp up your retirement savings, start a family or simply want to take a dream trip within the next year, all of that could be put on hold by taking on too much grad school debt or giving up several years of income.

“I have worked with people who had $100,000 in student loan debt to become a teacher making $30,000 a year,” Hayes says. “It would take forever to pay off that kind of loan.” So he suggests making a list of the things that you may be sacrificing in order to pursue your degree to help you determine if it’s worth it.

On the other hand, the promise of a higher salary and career growth could actually help you make faster progress on those goals down the line. Perhaps your expected income boost will mean you can put more into your 401(k) or toward a house down payment. The key is to weigh all these pros and cons as a team, so you can come up with a plan that balances your professional satisfaction with your financial dreams.

RELATED: 3 Wannabe Grad Students Ask a CFP: ‘Is Going Back to School Worth It for Me?’

LearnVest Planning Services is a registered investment adviser and subsidiary of LearnVest, Inc., that provides financial plans for its clients. Information shown is for illustrative purposes only and is not intended as investment, legal or tax planning advice. Unless specifically identified as such, the individuals interviewed or otherwise listed in this piece are neither clients, employees nor affiliates of LearnVest Planning Services and the views expressed are their own. Please consult a financial adviser, attorney or tax specialist for advice specific to your financial situation. LearnVest Planning Services and any third parties listed, linked to or otherwise appearing in this message are separate and unaffiliated and are not responsible for each other’s products, services or policies. LearnVest, Inc., is wholly owned by NM Planning, LLC, a subsidiary of The Northwestern Mutual Life Insurance Company.

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