Wednesday, 23 November 2011

The cost of graduate school: Investing in your future

Graduate school is an investment. The question for you is whether it is worth it.

Let's look at the costs and benefits. First, the costs.

Every graduate student, whether or not they pay tuition, shoulders an opportunity cost of foregoing job earnings for education. If you go to graduate school next year, you will not be pocketing the money you would be earning if you were working a full-time job. I cannot quantify that. Some of our students give up high-paying jobs to come to SAIS. Others not so. But every student could have chosen to work.

In most cases, the opportunity cost of studying far outstrips the price tag of school. And every student bears that cost.

Then there are the outright costs: tuition, books, living expenses, travel. We provide an estimate for incoming students. Here is the estimated budget for 2011-12 at SAIS Bologna.

If you add the opportunity and the real costs, it comes to a chunk of money. No one would deny that. The question then becomes: Is it worth it?

The return on your investment can take many forms. Some are straightforward: SAIS is a professional school, and most of our students use it as a springboard to a career in the international sphere. You may not know what job you will have when you leave SAIS, but you know the choices are exciting. Our alumni are leaders in many fields -- from the private to the public, from corporations to international organizations, from governments to NGOs.

Take my own experience. I was a high school teacher before starting SAIS. I yearned for a job on the global stage. When I finished SAIS, by virtue of my studies there, I was able to make a credible pitch to cover international finance as a journalist in Washington. That led to an unexpected but fulfilling career as a foreign correspondent.

I cite this because it is not atypical of SAIS graduates: There are doors leading to places many can only dream of.

Even before leaving SAIS, when one is at one's studies here, the experience can be gratifying. This blog has featured many students describing the learning experience in and outside the classroom, of deepening their knowledge through course work and by sharing experiences with the diverse student body.

Many readers know that one of my favorite adages is, "It's not the destination that counts but the getting there." At SAIS, the destination does count -- we want our graduates to land the jobs that inspire them. But the "getting there", or the time spent at SAIS, is also extremely satisfying. So the return on investment starts on Day One, not just at graduation.

If we continue to attract top students from around the world, it is because they recognize the benefits of the investment and also know how to make the best use of it.

How do they pay for it? Almost all students combine a mix of resources to make ends meet.

Most receive financial aid from SAIS, and in many cases the aid cuts the tuition cost substantially. For more information on financial aid and fellowships, click here.

Many land scholarships outside SAIS's control from national, international or local foundations. Some of these are well known, others less so. For a partial list of such sources, go here.

Most SAIS students have worked before starting their studies, and they may have set aside some savings to help defray the costs. Many work part-time jobs while studying. Even eight hours a week can help pay a large chunk of the rent.

Finally, some students take out loans. This is very common in the United States where subsidized student loan programs have existed for many years. But not only U.S. students. SAIS Bologna students who are citizens of EU member states are eligible to take out a fixed-rate loan from UniCredit Bank for up to 15,000 euros per year. For more information, click here.

Financing graduate school, wherever one goes, is a complex matter that extends well beyond the headline tuition figure and the size of financial aid packages. For some students it is daunting because it marks their first foray into the full complexities and challenges of personal finance.

But it can be done. You may not feel fully on top of the financial challenge at this point. My recommendation would be to think big: Why do I want to go to graduate school? How will it benefit me? Will it help me be where I want to be in 5, 10, 15 years?

Once you've tackled those questions, the nitty gritty of costs will tend to fall into place because you will see them as an investment that yields benefits far into the future.

Nelson Graves