How do you know whether more student loans are the way to go?
Jennifer wants to know…
I’ve been enjoying reading your blog for quite some time now. I have an issue I was hoping you could provide input with, from a financial perspective.
I am trying to get a 2nd B.S. degree in engineering, and debating between a UC and a Cal State. Obviously UC’s cost more, so that’s where the financial issues come into play. Do you believe taking out an extra $20-25K in loans (on top of the already existing $10K from 1st B.S. degree) is a smart move? I am in my mid twenties, and am married with a husband going back to grad school at the same time, but his employer will pay for his tuition.
[Aside: UC and Cal State schools are in California, and UC colleges are thought of as more reputable and harder to get into as a result]
I have a Roth IRA and have been reading pros and cons about taking out the money for education uses. Do you have any perspective about that?
I guess I’m mostly worried about digging a financial hole for my husband and myself that I will end up regretting, but I hear it’s wise to invest in education so do not know which thought should prevail. My goals for education is to eventually pursue graduate school after the 2nd. B.S.
My education was one of the most wonderful experience of my life, even despite the fact that I run a business that has little to do with my actual degree. Couple with the fact that $25k is easily recoverable under the right circumstances, and my initial reaction is to encourage you to go to the better school. However, there’s a major caveat, which you need to completely understand… Is the more expensive school that has a better reputation actually better for your education and situation?
Know the Real Difference
There are several factors that benefit a career other than luck. Since you aren’t a teenager and instead going through this process the second time, it’s even more important for you to research thoroughly. Here are a few factors that you should consider.
- Passion – Does going to the UC actually increases your passion for your eventual line of work? Or better yet, does it help you find your specific major more easily? The right professor can help you far more in this area so sometimes, the Cal State University may be an even better choice.
- Reputation of Your School in the Subject Matter – In general, a UC looks better on a resume. Don’t get me wrong. There are many Cal state students who are much better job candidate than UC students, but I’ve seen too many cases where a job candidate was picked based on what’s on paper. Perception matters.
- Networking Opportunities – Your life is shaped by the people you know and hang around with. A big portion is based on the luck of the draw, but the more reputable schools usually have students with better connections. Just like in the corporate world, networking is key to success. Can you meet more people and give yourself a better chance of finding your first job in your career? Or do you always stay in your room?
Location Specific Issues
You didn’t mention whether those two schools were in the same vicinity. Even if they were, I assume the commute would be different for you. Have you thought about that? How about cost of living? Have you checked out how much a bag of ramen costs at the two cities?
Obviously, being able to live with your husband will save you a bundle, and work wonders for your marriage too. Is there any reason why one school would be better for you other than economical reasons? You can be much more productive, both in terms of schooling and meeting new people, when you are happy. Never forget that balance is important, so a UC in the middle of nowhere may not be the right choice if that will make you miserable.
Teaching Assistant
One of the few ways to supplement your income is to work as a teaching assistant. Since you are an adult now, I would talk to the professors and see if there are any opportunities. As long as you are genuinely asking for help, good things can always happens.
Roth IRA or Student Loans
Student loans can be paid off at any time with money in your Roth IRA account. Since your contributions can be withdrawn at any time, it’s much better to try getting a student loan first. Even if your situation changes and you find that it’s better to pay it off, having a student loan gives you that much more flexibility. Therefore, I would take out a student loan just on this basis alone, just to keep your options open.
Other Factors, and Perhaps the Most Important
But going back to the choice of schools, you mentioned that this is your second bachelor degree, so what happened to your first one? You also plan to continue going into graduate studies after this. Will you be back to square one in four years when you think of your third degree?
I’m sure you had good reasons to want a totally different career path, but just remember that the grass is always greener on the other side. You already show (through contacting me) that you are at least a somewhat practical person, so I won’t beat on this too much. You know what I am trying to get at, so think this through.
$25k is easily recoverable, but there comes a point when even $1 more is too much. How much debt do you have other than the $10k in student loans you mentioned? You don’t want to be 40 with a few hundred thousand dollars worth of debt, a bunch of degrees with no job. That’s worst than starting over.
So what’s my bottom line advice? Go to the better school even with the higher cost because you are going to make it worth it. If you don’t put in the necessary hard work to make it work, even the degree itself may not be worth the effort, cost or time.
{ read the comments below or add one }
First off I would like to say awesome blog! I had a quick question that I’d like to ask if you don’t mind.
I was interested to find out how you center yourself and
clear your head before writing. I’ve had trouble clearing my thoughts in getting my thoughts out there.
I truly do take pleasure in writing but it just seems like
the first 10 to 15 minutes are usually wasted just trying to figure out how to begin.
Any ideas or tips? Thanks!
I am having the same problem of choosing a school for an MBA in project management. I need to go to an online school b/c I work full time and the local school I got my B.S. from doesn’t have a single PM offering. I am torn between going for the dual-degree option at UMUC (MSIT & MBA) for $30k or going the cheaper option of the MBA & MSIT at Aspen University for less than half the cost! UMUC is just one example, there are several other similar schools that are relatively the same cost for the MBA-approx. $30k.
My fiancee is starting her graduate program en-route to a PhD for psychology this summer so I obviously don’t want to put us in a hole too deep to get out of, but on the other hand, the MBA and project management cert will open doors for a salary nearing six-figures and the student debt won’t be an issue. Do hiring managers care where you go the MBA, or see the project management cert and ignore everything else since it is a global certification?
I think that the reputation value of a degree is dramtically over rated. If you’re actually pationate about something you’ll network yourself. To use myself as an example I was interested in sports nutrition, I did my degree in Dietetics but I was a member of the a regional weightlifting club, through the network people found out there was a weightlifting dietitian fast forward a couple of years and I’m doing the diets for the olympic team. Other dietitians with their prestigious schools have yet to achieve this stuff. Being pationate about something creates the networks for you.
An ex girlfriend did law but she was volunteering at community legal centres and animal rights groups. After graduating she ended up getting a job because one of the major law firms do some probono work at community legal centres and one of them noticed her.
If you’re commited to something find the cheapest way to acquire the skillset you need then go do it.
I think an education is always worth the costs. However, Moneyning is right. It’s important to choose a school that supports what you want. For instance, I am at a community college right now and plan on transferring in the fall. Certain Ucs had my major while others didn’t. Although the UCs that had my major were not as reputable as the others like UCLA, going to a school that didn’t carry my major didn’t make sense as much as I’d liked the school.
Jennifer, why not go for a graduate school degree than a 2nd BS?
Not many schools will allow students to jump straight to a graduate school in Engineering. There are many foundational type of courses that paves the way for more advanced topics, unlike a MBA. Without them, it’s like trying to learn accounting 101 without even knowing about addition and subtraction.
Money Ning is correct; I tried doing that initially but every school I looked into would not allow a non-technical major to get a M.S in engineering.
Studying in a better school really does pay-off. The results are better than the schools with lower reputation and educational quality. I’ll bet on it that if you graduate in a good school, the job is always good too.
Depends which UC. If it’s going to Berkeley, UCLA, or UCSD, then by ALL MEANS go. If it’s any other vs. a Cal State school……… i’d just save your money and make sure you graduate in the top of your class and network.
David, if you could ping the reader to respond with more details, that’d be great.
25K is chump change if you could make an extra 25K a year for 30 years by going to a better school.
thnx
She also mentioned in subsequent emails that she was in business and she plans to pursue engineering, which is where she thinks her passion lies.
I asked her to check back, so she might respond. But are there any other questions you have other than which UCs she is looking into? If we can come up with a list, that’d be great.
Nope. I figure she’d be excited to see her question to u up on your site, so let’s see if she responds. If she doesn’t, perhaps she’s really not that concerned and has already made up her mind.
Actually, she was very appreciative about it and already emailed me to thank me. I’m sure she will come back to read the piece and the comments, I just didn’t know if she will actually type out a comment to respond.
I will ask her about the schools.
Hi. Thank you for your insight and suggestions. The UC I’m debating is Irvine, and the Cal State is Long Beach. I know UCI is not a ‘top’ UC, but it is the only one that accepts 2nd B.S. students. The reason why I am thinking of going to UCI is because they are a more heavily based research institution, and I am thinking about doing research in the field in the future. If anyone knows whether it makes a difference for grad school whether you do research as an undergrad, or if you go to a more ‘reputable’ school, I’d love to hear your responses. Thank you so much.
I think a big brand name school, with all the recruiting and networking connections, can be a better long term value. Note that I said CAN be a better long-term value.
I obtained an MBA from a Top-25, public school. I would have chosen my education over one from a school ranked 5 or 10 places higher, simply because the ROI made it more sensible to go the school I attended. The in-state tuition was the driver.
That said, if it were a top-3 school, I would have gone regardless of cost. The long-term value, in my opinion, would be there for such an investment.
So overall – a better school CAN be worth it, but you really have to evaluate it on a case-by-case basis, and look not just at average starting salaries but the doors that can open in the future.
Definitely go with the school that has the reputation.
I agree with the previous comment about getting similar salaries regardless of which school someone graduated from but most jobs are taken by referrals, and more reputable schools have better connections. Whether it’s a higher chance to get to know other students with better networks or the school itself, it gives you more chances to land an interview.
In my experience, an Engineering degree (so long as it’s at an accredited engineering school) is worth about the same in starting salary, regardless of what school’s name is printed on the diploma. It has more to do with the individual than the school when it comes to job hunting and beginning salaries. I work for a top 10 engineering firm in the country, and we have, literally, thousands of employees from hundreds of different universities…but our beginning salary ranges are set corporate-wide as a function of the cost of replacement (not the cost of living), and one piece of paper is as “valuable” as any other schools’.
So my advice is to go to the least expensive, yet ABET accredited university, and do well. Do a co-op or two as well to give you real-world experience and networking that you just won’t get if you don’t, not in the least to mention it usually pays pretty well too. The “difference” in salary between graduating from one school verses another is virtually non-existant, and even if it is, and it definately won’t be enough to cover the difference in education costs.
Going back to school is a tough choice, especially since your husband is also taking his MBA. I’d think that unless you two have a clear plan to sustain your lifestyle and pay off your loans and still have a good retirement, it’s not the wise choice to start over.
I agree, only go to the more expensive school if it really will increase your abilities and job prospects accordingly. I was fortunate to get my engineering degree from a very affordable yet high quality school (in Pennsylvania), and I’m very glad I didn’t go to any of the bigger-name but more expensive schools (Cornell/RPI/RIT/Lehigh). Especially if you’re already established with job experience, the name on the diploma isn’t as important. Name recognition impacted my first job options, but after that, it’s been relatively meaningless – I’m glad I don’t have the loans now.