When considering whether to pursue a Master’s degree, you will want to explore myriad options for financing that education, and may wonder whether you should take out student loans. Studies have shown that in the United States, a university degree translates into a higher salary, but it is nevertheless prudent to acknowledge, particularly in a struggling economy, that an expected salary is never an absolute guarantee, so student loans should be applied for responsibly and conservatively. Peterson’s offers sound advice for the loan-seeking graduate student, including practically evaluating your current and expected finances, and considering alternatives such as grants or fellowships. Overall, in taking out a student loan, you will want to think about whether your long-term career gains will outweigh the debt you incur to earn a Master’s degree.

More Education Equals More Pay

In a recent survey by the Pew Research Center which studied the effects of higher education on earning potential, employed young adults (ages 25-32) with a Bachelor’s degree or higher earn $17,500 more annually than those with a high school diploma only. The U.S. Census Bureau confirms this trend, reporting that a college graduate will earn $2.1 million in a lifetime, while a Master’s degree holder will earn an estimated $2.5 million.

The Debt Factor

When examining income potential, a Master’s degree seems to be a wise long-term investment. Nevertheless, the cost of that education and the consequences of debt mean that student loans should still be borrowed with caution. If you are dealing with other sources of debt, such as undergraduate loans or credit cards, it is important to consider whether your finances can handle more debt, and to devise a realistic payback plan. Peterson’s suggests that your student loan payment should be between 8 and 15 percent of your expected salary.

Career Field is the Key

Your chosen career is a good indicator of your earning potential. An article in Business Insider shows that a Master’s degree in Arts, Education, or Social Work will earn you approximately $60,000 by the middle of your career, while degrees in fields like Engineering, Computer Science and Mathematics will bring in over $90,000 by the same career point. In some professions, a Master’s degree may not be necessary to career advancement, according to the Center for College Affordability & Productivity.

Finally, when considering whether you should take out student loans to get a Master’s degree, be aware of your options. Some schools offer scholarships, or even paid fellowships, to students who are advancing in their programs, and it’s important to investigate and apply for these opportunities. If you’re working at a full-time job, perhaps your employer may offer some type of tuition reimbursement plan as well. See “Will My Employer Pay For My Master’s Degree?” for more information. The final word of advice: keep your loans manageable and stay abreast of your finances. Talk to a financial adviser at the school who may be able to help you lock into a low-interest loan, and if you can, try to make payments on the loan even while you’re in school so that you don’t accrue more interest. Taking out a student loan to get a Master’s Degree can be a wise financial decision, and if you plan responsibly and borrow frugally, your return can be both personally and economically rewarding.

Further Reading:

100 Great Scholarships for Master’s Degree Study