Cons of Personal Finances for Graduate Students

See also: Pros of Personal Finance for Graduate Students

1. Low (or no) salary

You will hear graduate students complain about this constantly. Making no money is not fun. It is not fun to see your friends making higher and higher salaries in the private sector while you have a very low salary locked in for years. It may also hinder your ability to make friends outside of graduate school, to travel, to eat out, etc. But, everyone makes it work, and you will too. 

Going to graduate school is a major commitment and sacrifice in many ways, and the low salary of graduate students can lead to financial stress and anxiety. This can make it challenging to maintain a healthy work-life balance, as graduate students must focus much of their time and energy on their studies and research.

It's also worth noting that graduate students typically don't have many opportunities to increase their earning potential while in school. Unlike working professionals, they don't have the chance to earn bonuses or take on additional responsibilities that come with a higher salary. This can be a major source of frustration and disappointment for many graduate students.

Despite these challenges, it's important to remember that the experience of attending graduate school can be incredibly valuable. The knowledge and skills gained can be life-changing, leading to a brighter future and higher earning potential once you complete your degree. And while the financial sacrifices may be tough in the moment, they are often well worth it in the long run.

2. Paying to go to school (more loans!)

Worse than not getting paid very much, one major financial downside is that you may have to take out loans to pay for your education. This is especially true for professional Master's programs, which often come at a high cost and may not offer a stipend or salary.

As a result, many graduate students find themselves digging themselves further into debt, watching their friends advance their careers and increase their salaries while they struggle to keep up. This can be a major stressor and put a strain on your finances.

It's important to consider the cost of your graduate education and the potential impact it may have on your finances before enrolling in a program. In some cases, it may be possible to minimize the amount of debt you take on by working as a teaching assistant or finding other funding sources. However, for many students, taking out loans is a necessary reality of pursuing a higher degree.

While it can be discouraging to see your debt increase, it's important to remember that the investment in your education can pay off in the long run in the form of higher earning potential and greater job opportunities. It's important to create a budget, prioritize your expenses, and make a plan for repaying your loans after graduation. With careful planning and effort, you can successfully navigate the financial challenges of graduate school and come out on top.

3. Sacrificing opportunity cost

The cost of attending graduate school is not limited to tuition fees and other expenses. One financial downside that often goes overlooked is the opportunity cost of attending grad school. The opportunity cost refers to the potential gain or profit that you could have received if you had chosen an alternative course of action.

For those who already have a stable job in the private sector, the opportunity cost of attending grad school can be substantial. If you are already making $80k and decide to go to grad school for 5 years, where you make only $20k, not only are you losing out on $300k in earnings, but you are also missing out on the career advancements and pay raises that you would have received during those five years.

This can be a difficult decision, as you need to weigh your personal happiness and career goals against the substantial cost of attending graduate school. The loss of opportunity cost can be a major financial disadvantage for those who are considering enrolling in a graduate program. Therefore, it is important to carefully consider your options and weigh the potential benefits and drawbacks before making a decision. 

4. High cost of living areas

This is one of the many financial challenges that graduate students may face. High costs of living can be a major burden, and it is important to consider this when deciding whether or not to attend a particular university. If you are only admitted to a university in a city with a high cost of living, you may need to find ways to budget and save your money carefully, or look for other forms of financial support such as grants, scholarships, or part-time work.

It is also important to think about the long-term impact of living in a high-cost city. Will you be able to repay your student loans while living in this expensive city, or will you need to find a higher-paying job after graduation? These are important questions to consider, as they will impact your financial stability and well-being in the years to come.

While the cost of living in a high-cost city can be a significant challenge, it is also important to keep in mind that the benefits of attending a top-ranked university may outweigh the financial challenges. For many students, the experience of living and learning in a big city, and the opportunities for career advancement and professional growth, make the high cost of living worthwhile. However, this is a personal decision that each student must make based on their own financial situation, goals, and priorities.

5. No guarantee of higher salary

One of the major financial downsides of attending graduate school is the uncertainty of a higher salary after graduation. Despite the promise of a better future, there is no guarantee that getting a graduate degree will translate into a higher paying job. In fact, in some fields, a graduate degree may make you overqualified for certain positions, and actually hurt your chances of getting hired for certain jobs.

It's important to weigh the potential long-term benefits against the immediate financial costs of attending graduate school. While the promise of a higher salary is a driving factor for many people, the reality may be different for your particular field or job market. It's essential to do your research and consider all factors before making a decision about graduate school. You want to ensure that the investment of time and money will pay off in the long run.

In conclusion, pursuing a graduate degree can be a significant financial commitment with both pros and cons. On the one hand, obtaining a graduate degree can lead to higher earning potential and greater career opportunities. On the other hand, the cost of tuition, books, and living expenses can be substantial, and students may also need to forego earnings while they study. Before making a decision to pursue a graduate degree, it is important to weigh these financial considerations carefully, including the type of program, length of study, and expected return on investment. Moreover, students should take advantage of any financial aid or scholarship opportunities that may be available. Ultimately, the decision to attend graduate school should be based on a careful consideration of the potential financial benefits and costs, as well as a student's career goals and personal circumstances.