Business Grad School Test

This year, I talked someone out of going to graduate school.

Actually, he already was enrolled in a prestigious MBA program and on the way to accumulating about $100, 000 in debt, including interest.

Michelle Singletary writes the nationally syndicated personal finance column, “The Color of Money.” View Archive

With one semester completed, he and his wife came to the ministry I direct. They already were struggling under the weight of credit card and undergraduate student loans.

As I usually do, I asked him a number of questions. He couldn’t answer most, and that led him and his wife to realize he couldn’t afford the program.

Now, 10 months later, the man and his wife have paid off more than $21, 000 of the loans. By next year, they should be debt-free. An MBA still may be in his future, but without the heaviness of debt.

Is graduate school worth the cost?

I am an advocate for higher education. I have a master’s degree in business, and I studied for it not because it was going to directly increase my earning power but because I wanted the knowledge. My husband has an MBA. We both obtained our advanced degrees without resorting to loans.

Earlier this year, a brief about the state of graduate school debt released by the New America Foundation addressed the question of whether there is too much borrowing for expensive graduate programs because such debt has surged in recent years.

“While a graduate or professional degree boosts a student’s earnings prospects and the economy at large, it is not the foundation for economic opportunity and middle-class earnings that a two- or four-year degree now provides, ” wrote the report’s author, Jason Delisle, director of the foundation’s Federal Education Budget Project.

You know the $1 trillion in student loan borrowing that is of concern to many of us? About 40 percent comes from loans to finance graduate and professional degrees, according to the report.

In looking at data from the Department of Education, Delisle found that the median level of indebtedness for a borrower with a master of arts was $59, 000 in 2012, up from $38, 000 in 2004. And that’s after adjusting for inflation. There were similar trends for other master’s degrees, such as in science or education.