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If you're looking at grad school, the first thing you need to know is that it's not cheap. The average cost of obtaining a graduate degree varies widely from school to school and even program to program, but you're looking at spending between $30,000 and $40,000 per year. However, the cost of grad school is more than just the cost of tuition and fees. It's also the cost of lost wages, which can double or even triple the real cost. So how do you know when grad school is the right choice for you and your career?

Evaluating Your Debt

Mark Kantrowitz, a financial aid expert and president of MK Consulting Inc. in Las Vegas, has a very simple formula for how you can decide whether or not grad school is worth it. "Look at the debt you'd take on, as well as your current debt from your undergrad years," he says. "If your expected debt is less than your expected annual income, you'll be able to pay your debt back in ten years or less." If that's the case, you can afford to go to grad school and, in some sense, it's worth it.

For Kantrowitz, it's mostly about looking at the additional debt that you're taking on, as well as the additional debt you will accrue in the form of compound interest while you're getting your graduate degree. "It's important to look at the interest accruing on your debt if you're not going to be paying it in school," he says. This is another factor to consider when calculating how much income you're going to lose from the two or three years that you won't be working.

The only exception to this ten-year replacement metric is if you have retirement looming in less than ten years. "You should aim to borrow no more than they can afford to repay in ten years or by retirement, whichever comes first," Kantrowitz says.

You really want to plan on not having the additional cost at the age of 63, because you only have a couple years to benefit from your new income.

Evaluating Your Present Field

There's another way to figure out if grad school is right for you, irrespective of cost, according to Kantrowitz. "In some cases the comparison isn't to what you were earning before," he says. "You might have lost your job or your entire industry might have gone away, like in the auto industry." Kantrowitz points out that it's not uncommon for auto workers to become nurses, as an example.

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In this case, you might not have any other option than to return to school for a degree, though it might not be a graduate degree. Fortunately, there are a number of not-for-profit trade schools offering top-notch career training.

Of course, you might want to change fields, even if your industry hasn't entirely disappeared.

"In some cases, if you're looking for a career trajectory into academia, you need a graduate degree," said Steve Paulone, director of graduate business programs at the Malcolm Baldrige School of Business at Post University. So another way to find out if it's worth it is to ask yourself if it's necessary to your professional development. "You have to ask yourself what's lacking?" Paulone says.

For Paulone, it's less about the credentials and more about the skill-set you're going to achieve.

"If you need a degree to check a box, that's the least reason to go," he says. The one contrary example that Paulone gives is credentialing. You might need a degree to obtain professional credentials, even when you already have all the skills required. In Pauline's case, he was already un upper management, but needed more tools in his toolbox to take things to the next level. "The credentials helped, but what I really needed was an education," he says. 

Employer-Paid Education

Paulone's own experience raises another issue you should be aware of when trying to figure out whether or not grad school is worth it. "My employer paid for my degrees," he says. Two masters' degrees didn't cost me one nickel." In fact, if you work in manufacturing, engineering or other related fields, you might be eligible for employer-paid or employer-reimbursed tuition. In this case, if you think you're going to be able to go further in your career with a graduate degree, you might as well go for it. After all, it's going to come at no cost to you.

But always remember that, in most cases, a graduate degree is going to cost big money. While it's all well and good to talk about "chasing your dream" and going for an MFA in creative writing or an advanced degree in some arcane social science, unless you have an endless reservoir of expendable cash, it's just not going to be worth it.