The year was 2010; I was 25 and in full-blown quarter life crisis.
I had a Bachelor’s of Fine Arts, working in web design in Chicago, living paycheck to paycheck, and in the brink of foreclosing on a house I forgot I had owned (more on that in a future post).
Fall 2011 – Summer 2015 – The Blur
Long story short, I decided to go back to school, wiped out my savings of $7,000 with prerequisites, certifications, and grad school application fees, started PA school in 2013, and racked up nearly $100,000 in federal and family loans.
Fall 2015 – The Light at the End of the Tunnel
I moved to NYC to work at the 3rd best hospital in the US and TRIPLED my previous salary.
So, was it worth it?
For my Master’s degree, if I were to pay my loans off today, I would have invested $100,581.76, $3,756.58 of which is interest. This amount of interest would easily have been closer to $15,000 had I not refinanced my federal loans through Commonbond, which you can read about here. That’s A LOT of money.
Here’s what motivated me to change careers vs changing jobs in the same field:
- Helping others and even saving lives is super important to me, especially when I have family members with chronic health issues whom I’ve been unable to help as much.
- Secondly, although money isn’t everything, but it does play a big role in why I chose this career.
- I was tired of living paycheck to paycheck.
- The third biggest reason I chose to be a PA was time.
- Time is just as (if not more) important as money, and I did not pursue medical school for this reason.
- More time in school equals more loans and less income in the short-term.
- More time at work equals less time for family, friends, and traveling, even if it does mean a bigger paycheck in the long run.
Let’s take a look at what my return on investment (ROI) is for an MS degree (blue) vs BFA plus 3 extra years in the workforce (orange).
Age is the X axis, which starts at 22 when I entered the workforce, student debt-free thanks to generous scholarships.
Salary is the Y axis on the left, and cumulative assets is the Y axis on the right.
To keep things simple, both salaries assume a 5% raise each year and both cumulative assets assume a 6% rate of return.
The point at which my Master’s degree pays for itself is between the ages of 31 and 32. From here, assuming I am able to invest 50% of my PA salary each year (less $25,000 for living expenses), I will reach my first $1 million in assets by the age of 41 versus the $220,000 in assets at that same age had I stayed in web design.
Again, this is a very basic projection based on the 5 main variables:
- My starting salaries in both careers
- Fixed raises of 5% annually
- Fixed rate of return of 6% on cumulative assets annually
- Fixed cost of living of $25k annually
- Fixed savings of 50% of salary annually
The age at which the graduate school pays for itself will vary greatly based on these 5 factors.
Not all graduate degrees were created equal.
While the more pragmatic degrees such as engineering and finance have shown to pay for themselves relatively quickly, a large percentage of other degrees have poor ROI.
According to a 2014 Economist article, some arts and humanities graduates can expect to make $147,000 LESS over 20 years than a high school graduate. The high cost of education, which has increased 5 times greater than the rate of inflation, contributes to the poor ROI.
A 2015 Washington Post article revealed that as many as 1 in 4 degrees have a negative return.
My total opportunity cost of over $230,000 ($108,000 upfront + $130,000 in wages and investment opportunities forfeited) is paying off significantly.
What’s immeasurable is job satisfaction and work-life balance, both of which are also very high for me. Big will also say the same about his MBA.
I work 40-60+ hours a week, 1 call weekend every 5 weeks, and have 5 weeks of PTO. In my free time, Big and I have been traveling upstate to work on DIY projects for our new apartment and across the country to Savannah, Montreal, and more!
If you’re thinking about pursuing higher education:
- Do your research.
- I knew I wanted change but considered different paths (including architecture and physical therapy) before discovering the PA profession.
- Reach out to your social network to find others in the same field.
- Invite these folks out for coffee and/or shadow them, and pick their brain!
- Make a Pros vs Cons chart.
- Make a Cost vs Return graph.
- See if it makes sense to invest tens or even hundreds of thousands of dollars into an advanced degree or if there are more affordable alternatives
- Consider the immeasurable variables such as job satisfaction, work-life balance, etc.
What are your thoughts on higher education? Feel free to comment below.
Subscribe to stay tuned for Part 2 of our Is Higher Education Worth Pursuing? series, where Big talks about his MBA and its ROI.
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