cost / benefit calculator/list of considerations for those considering grad school?

[singasongofjoy]

Idk if such a thing exists, but if so... is there some sort of tool/algorithm/website something to help someone who is not terribly economically/logically-minded to make more informed considerations re: grad school? Like... expected costs, cost of living, opportunity cost, what's your anticipated salary, years to retirement, etc?

Situation: friend of mine has a masters (in English Lit) and a job as an adjunct (personally meaningful work but crappy salary though at least he gets benefits now at full time), and is v. seriously considering going back to school for a PhD. Some degrees he could obtain for much lower cost (e.g., a program at the school he is teaching at, but those of tangential rather than fundamental interest) but what he really wants to do (PhD in literature) isn't available at his current institution and the risk of leaving his job to get a PhD in literature given the expected job market for that sounds... foolhardy to me.

I might be looking for something that doesn't exist.... but I guess I'm looking for some sort of external site/tool to serve the role of making the point in a way that doesn't leave me feeling like a complete dingus shooting down his dreams by saying what I am thinking, which is " I know adjuncting sucks but even so that sounds like a terrible idea for someone who is nearing 40 and doesn't have much retirement or equity in anything to speak of yet because you've been making an adjunct salary for a decade...." I don't want to be that person. Also don't want him to be signing himself up for a life of little means well into what should be retirement years...

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[summerbabe]

I was a humanities major who graduated from a liberal arts college in the 2000s and without any discernible real world skills, had once considered academia. I'm really, really, really glad I didn't. I had multiple close friends go on to finish PhDs and even though they're much smarter than me, none were able to find tenure track jobs.

How aware is your friend of current market conditions for English lit? Does he fit into one of these unfortunate grad school stereotypes?

More PhDs are being pumped out even as tenure track jobs have drastically shrunk and this trend should only worsen. The fact that your friend even gets health benefits is out of the norm, which sucks.

On another note, would your friend ever consider secondary education? Depending on where your friend is located or could relocate, there are elite/expensive private high schools around the country that (after some tenure and raises) may potentially pay 2-3x his current salary + benefits for MAs in English lit with college teaching experience.

I have friends who work/have worked in these settings and while it comes with its own headaches (e.g., dealing with parents who expect their kids to get into Ivies), it's definitely possible for intellectually simulating learning to occur given the general emphasis on seminar-style learning and low faculty to student ratios to justify college-esque tuition price tags.

 

[PsyDr]

It's not really opportunity cost, but I forget the real term.

1) Loss of income: person is NOT earning money for X years
2) Cost of opportunity: person is spending money to get retraining. If paying in cash, this money could be used for another more lucrative option.
3) Relative difference in income between options.
4) Loss of contributions to retirement savings. If you don't contribute, then that money isn't growing. If your average social security contributions are lower, that also affects retirement.
5) Debt/income ratio. Used in deterring if you're getting a mortgage. So if you owe $1MM in student loans and make $80k, you're basically never getting a house. Which means you can't sell that in old age, or pass it down to your kids.
6) Social costs, including lifestyle and having a partner wait for lifestyle to change.


Example:

Person is 30, zero debt, aside from a $500/month in car stuff and sundries. they have $20k saved up. Let's say their current job pays $40k/yr with full benefits, and they put 10%/yr into their 401k. The house they can afford is about $150k. By 65 they'd have about $750k total to live off of. And their house is paid off. They're gonna have to sell that house because forbes puts the median out of pocket medical expenses in retirement at around $250k.

By stopping all of that for 5 years, they'd lost those 5 years of contributions to their 401k, which is a loss of 200k. Then they lost 200k in unearned income (no job those years). Then they lost those 5 years worth of gaining home equity (let's say 25k in home equity).

So they'd need to earn more than 425k MORE over the course of their new career to break even. So like an additional 15k/yr WHICH THEY CONTRIBUTED TO CATCHING UP, NOT INCREASING THEIR LIFESTYLE

 

[Sanman]

Not sure there is anything that really captures the total costs or pursing higher education. For what it is worth, I have a group of friends that have chosen to pursue PhDs in academic (non-clinical) fields. I was one of the first in that group to get into a doctoral program and have tried to advise my friends about their choices. I currently have a friend who I discouraged from getting a PhD choose to go forth anyway due to being in the same adjunct trap with a masters. Now, 5 years later, he is considering leaving his field and taking a government job as he is about to turn 40 with meager savings, no home, and minimal new job prospects despite being single and willing to move anywhere in the U.S. Sometimes, there is not much you can do to convince people about reality. The only friend I encouraged to pursue a PhD is the one that chose not to as he had always had the option to go into his family's business. Once he had a kid the economic reality set in, he quit academia altogether and went into the family business. Adjuncting paid less than daycare and the family business has flexible hours.

 

[MAClinician]

Google popped up this (have not used it myself personally)

Grad school ROI calculator: Is graduate school worth the cost? | Money Under 30

Getting a graduate degree doesn't always mean a bigger paycheck. Learn how going back to grad school will affect your finances before you commit with our grad school ROI calculator.

www.moneyunder30.com

 

[Sanman]

Google popped up this (have not used it myself personally)

Grad school ROI calculator: Is graduate school worth the cost? | Money Under 30

Getting a graduate degree doesn't always mean a bigger paycheck. Learn how going back to grad school will affect your finances before you commit with our grad school ROI calculator.

www.moneyunder30.com

Very interesting. Though I can see people inflating expected salary and decreasing expected costs of living/loans. All of this also assumes you are able to obtain the job you want.

 

[WisNeuro]

Very interesting. Though I can see people inflating expected salary and decreasing expected costs of living/loans. All of this also assumes you are able to obtain the job you want.

"But I'm gonna be able to walk out of postdoc into a 150k job easily, so why worry about the 300k in loans!"

 

[Sanman]

"But I'm gonna be able to walk out of postdoc into a 150k job easily, so why worry about the 300k in loans!"

"I know someone who did it, so your statistics are wrong!"

 

[singasongofjoy]

Very interesting. Though I can see people inflating expected salary and decreasing expected costs of living/loans. All of this also assumes you are able to obtain the job you want.

O*Net (free, online) - you can look up average salary in different geographical areas and links to cost of living, average rent, what it takes to live "comfortably." I just recently rediscovered that little gem.

 

[singasongofjoy]

It's not really opportunity cost, but I forget the real term.

1) Loss of income: person is NOT earning money for X years
2) Cost of opportunity: person is spending money to get retraining. If paying in cash, this money could be used for another more lucrative option.
3) Relative difference in income between options.
4) Loss of contributions to retirement savings. If you don't contribute, then that money isn't growing. If your average social security contributions are lower, that also affects retirement.
5) Debt/income ratio. Used in deterring if you're getting a mortgage. So if you owe $1MM in student loans and make $80k, you're basically never getting a house. Which means you can't sell that in old age, or pass it down to your kids.
6) Social costs, including lifestyle and having a partner wait for lifestyle to change.


Example:

Person is 30, zero debt, aside from a $500/month in car stuff and sundries. they have $20k saved up. Let's say their current job pays $40k/yr with full benefits, and they put 10%/yr into their 401k. The house they can afford is about $150k. By 65 they'd have about $750k total to live off of. And their house is paid off. They're gonna have to sell that house because forbes puts the median out of pocket medical expenses in retirement at around $250k.

By stopping all of that for 5 years, they'd lost those 5 years of contributions to their 401k, which is a loss of 200k. Then they lost 200k in unearned income (no job those years). Then they lost those 5 years worth of gaining home equity (let's say 25k in home equity).

So they'd need to earn more than 425k MORE over the course of their new career to break even. So like an additional 15k/yr WHICH THEY CONTRIBUTED TO CATCHING UP, NOT INCREASING THEIR LIFESTYLE

excellent example and points to keep in mind, thank you!

 

[singasongofjoy]

I was a humanities major who graduated from a liberal arts college in the 2000s and without any discernible real world skills, had once considered academia. I'm really, really, really glad I didn't. I had multiple close friends go on to finish PhDs and even though they're much smarter than me, none were able to find tenure track jobs.

How aware is your friend of current market conditions for English lit? Does he fit into one of these unfortunate grad school stereotypes?

More PhDs are being pumped out even as tenure track jobs have drastically shrunk and this trend should only worsen. The fact that your friend even gets health benefits is out of the norm, which sucks.

On another note, would your friend ever consider secondary education? Depending on where your friend is located or could relocate, there are elite/expensive private high schools around the country that (after some tenure and raises) may potentially pay 2-3x his current salary + benefits for MAs in English lit with college teaching experience.

I have friends who work/have worked in these settings and while it comes with its own headaches (e.g., dealing with parents who expect their kids to get into Ivies), it's definitely possible for intellectually simulating learning to occur given the general emphasis on seminar-style learning and low faculty to student ratios to justify college-esque tuition price tags.

Huh.... secondary education is a really interesting prospect I doubt he's considered. Could be enough of a change in various ways to make it a good option if what he is more wanting is a change from the adjunct rut. Thanks for the idea!