Public or private graduate school

Question: I am trying to decide between two different graduate schools: a state school and a private college. Both have good, well respected programs, although I'm fairly certain that the private school has a slightly better reputation and would probably improve my chances of getting a good job after I'm done at least a bit. The real difference between the two schools is the cost, and it's the reason I'm concerned about accepting admission at the private school. I would probably have to take on between $30,000 to $40,000 in student loans to attend the private college, in addition to spending my entire life savings of about $30,000. This concerns me especially because the program - A masters in English literature--isn't going to greatly increase my earning potential. I plan to become a teacher, hopefully at a community college, although there's a chance I may want to go on to do a PhD. Also, I'm 31, and hope to buy a home and have children sometime in the not too distant future. And I have no retirement to speak of.

I'm really torn, because while I think I may get a better education at the private school, it seems like a bad idea financially, especially since the state school MAY be just as good (if not as cushy and warm and fuzzy). Should I take the risk and take on the debt required to go to the private college? Thank you! Anna, San Francisco, CA

Answer: Anna, I think you already answered your question as you wrote it out. You believe it doesn't make sense for you to take on that much debt and drain your savings for a degree that won't increase your earnings potential (much). If you go to the private college you'll spend years after getting your degree struggling to pay down debt, living on a financial high-wire. I take seriously the importance of enjoying your graduate school experience. But I worry that you'd end up financially strapped, limiting your freedom of choice once you have earned your degree.

I hope you've really explored that the state college graduate degree will pay off in terms of job and career. I'm not an expert, but I do know that the competition for teaching jobs at community colleges and junior colleges is soaring. When it comes to graduate school, it's less about getting an education (which is vital with an undergraduate education) and more a cold, rational calculus on the return on investment.

You might want to check out my answer to a related question that I posted on May 8th, Take on graduate student loans? Better yet, read the comment section. There are some very sharp observations on money and the risks of getting a graduate degree.

Anyone else want to weigh in with some insight for Anna?

About the author

Chris Farrell is the economics editor of Marketplace Money.

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