By Eric Haun, staff writer

Making the choice to further your education with graduate school is one that students should carefully review. While some fields require advanced degrees for entry, others are more elective. Most students focus only on the hard costs of the decision, but the opportunity costs of the decision to go to graduate school could have an impact well into the future.

Our first thought is probably the hard costs and immediate considerations that come with choosing graduate school. Not only must we consider the tuition amount and debt that can mount over the course of attaining the degree, but there are also the costs associated with the location of the school and living expenses — graduate students still have to eat.

We may then take an inventory of our life expenses – will I be paying for a wedding, house or child within the next few years? Is this choice going to place me in a higher level career after graduation or at least position me for faster advancement so I can recover these costs?

For some, the reasoning might stop there. The hard costs appear to give enough pros and cons to weigh the alternatives and make a choice to attend or not attend graduate school. 

However, don’t forget the opportunity costs and considerations that could weigh heavily on your decision. These include lost years of income and lost years of experience and potential promotions. There are also hidden costs such as the personal and employee-sponsored 401(k) contributions on which you may be missing out, the income you would have saved for investment purposes and the earnings you could have made from your investments. 

You could say there is a domino effect for each decision you make, and this one warrants some time and consideration so that you are aware of all the variables.

Do the opportunity costs outweigh the benefits of your higher degree? In many cases, the choice to attend graduate school could be your best option, as long as you’re smart and in the game along the way, making the right choices regarding your finances. 

You can also create a strong financial foundation for yourself by practicing money management with what little money you do have. Typically, you will have a job of some sort to get through, so save 10 percent (or what you can) from the beginning. The difference between doing this from ages 18 to 22 vs. 30-plus or whenever you can “afford” it can make a huge difference in your end sum. Maybe you seek out opportunities for teaching or doing research while getting your degree so you don’t have to take out as large of a loan as you originally planned. Each of these little steps toward properly managing your finances can help you start out on the right foot when graduation comes.

Eric Haun is a junior in finance. Please send comments to [email protected]

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