After working for some time, many realize that what they’re doing isn’t what they would like to do their whole life. Going back to school to change career paths can be daunting and even financially devastating. Recently, I’ve started looking into going back to school to get an MBA. Here are a few things that I am looking at as I work towards this decision.
ROI stands for Return on Investment. In this situation, it’s how well you are doing after school. Are you making more money? Is the payback period on your loans short enough that you won’t be in debt forever? As you’ve probably experienced, going to school is expensive. Taking out more student loans sounds like a drag. However, many programs publish the average salary of their graduates. Use this to start calculating how long it might take to pay back these loans. Obviously, we don’t want to be paying back debt until we’re 70. So plan conservatively with your payback timeframe.
2) School recognition
School recognition is huge when going back for another degree, consider it as brand recognition. Think of it like this, if you offered a random person on the street a can of Coke or a can of store-branded Cola, what will they pick? The Coke, right? Because it’s a known and trusted brand. The same thing happens with schools. Nationally recognized schools help assure organizations looking to hire you understand that you went through a rigorous program. Shoot for a top 50 school in your discipline with national recognition. Large state schools are a good option to get national recognition while reducing costs.
3) Career path afterward
To be clear, this is highly depended on the position you accept after getting your degree. Did you accept a senior position with a fortune 500 company? A consultant position with a top consulting firm? Did the company you’re working for promote you based on your new skills? Utilize school resources like the alumni network or job fairs to help you find that next position to put you on the career path you wish to follow. Personally, I’m looking to where I want to be in 10 years and whether or not the position will help me get there.
4) Financing (company pay vs student loans)
Unless you are an executive in a very large company, it is very unlikely that the company you work at will pay for your entire degree. However, a lot of companies do have continued education funding. For instance, the company I currently work for grants approximately $5,200 a year for classes. While this isn’t a lot, it’s still financing that I won’t have to get through loans. The thing to consider most through utilizing company funding is time to complete the degree.
Another option is to quit your job and go back to school full time. The issue with this is that you will be spending more due to having no income, possibly having to move, finding new housing, etc. For this situation, we’ve determined that the payback period is too long to quit your job unless you are accepted into a top 5 program nationally. Even then there is still a possibility that the expenses to get the degree are too much to provide a reasonable payback period.
5) Networking (online vs in class)
Going back to school is as much about networking as it is about studying hard and getting a degree. Creating a network of similarly thinking individuals and friends will help with finding potential opportunities in the future.
While it may be cheaper and more flexible to get a degree online, it sacrifices the networking potential of attending classes and meeting new people. If you have great networking skills this may be a non-factor. However, for the majority of us, meeting new people and struggling through class together helps build networks that we can use in the future to find financial opportunity.
One big positive from Online degree programs is flexibility in location. If you are doing an MBA program where you are still working and going to school part-time, it may take up to 5 years to complete. In the meantime, you might be asked to change locations for your job, or might take a new job opportunity in a different location. The online program will allow you location flexibility without penalty. Just be sure to pick an online program that has a good or even great reputation. See point 2 above.
6) Time to completion
For me, the time it takes to complete a degree is probably the most important factor. Taking your time and using company financing is good, however if it takes you an extra 3 years to complete then you’re losing out on 3 years of financial gain. Transfer credits, overload your semester, or in general do what you can to reduce the amount of time you are in school. Doing so will help with reducing the payback period of your loans as well as with maximizing your earning potential.