No Return On This Investment

Angela wants to go to graduate school. She's found a program overseas, but she will have to take out more loans to attend. Dave disagrees that this is a good plan for Angela's career.

QUESTION: Angela in Detroit graduated from college two years ago and wants to go to graduate school. She’s found a program overseas, which is inexpensive, but Angela will have to take out more loans to attend. She still owes $30,000 and would need another $20,000 for this program. Dave disagrees that this is a good plan for Angela’s career.

ANSWER: I guess my question is other than you like to go to school and you want to go overseas, aside from those two things, from an investment standpoint… If you want to go on vacation and study while you’re there, and you want to pay cash for it, go ahead. But on the auspices that we’re doing this for our career, I don’t know that you can make the case that you’re going to make your $20,000 back as a result of your studies—unless you’re going to pick up some extra knowledge that you get no other way since the majority of the people in your field don’t have a master’s.

I disagree that you would be making more money because you have a master’s. A master’s is not a part of the hiring procedure in your field. I don’t think you can make the case that there’s an ROI on this.

I’m not ever going to tell you to borrow money. Ever. Ever, ever, ever. You need to clean up your debt, and you need to pay cash for this or you don’t need to do it. It’s a definite no. It’s not even open for discussion that you borrow money to do something—you’re borrowing money to go on vacation and study. It is a vacation because you can’t make the case that it can give you an ROI in the marketplace. I’m sorry. Photographers, graphic artists, visual design people—they’re all over the place. I’ve got a whole floor of them up here. I don’t hire them based on a master’s, and I sure don’t pay them an extra $20,000 a year or $5,000 a year because they have a master’s. I hire them based on their skill level and their eye and their ability to produce that type of product line and produce in that field. You’ve already got an academic underpinning to do that with.

If you want to do it, you can do it, but you’re asking my opinion. I don’t think you can make the case—not even close—that there’s an ROI on this. But if you want to go study abroad and spend money, I’ve got no issue with that as long as you’ve got the money. In this case, you don’t have the money, so there’s no justification for this. You just can’t do it if you’re wise. You can do it. People do it all the time, but then you get home and you’ve got $50,000 in debt. You meet somebody and get married and have a kid and don’t want to work. You want to be home with the kid. And it’s all because of this little adventure. Then you call me five years from now and, “I can’t quit my job because I have student loan debt.” That’s the conversation I have on this show every day. So no, I’m not going to endorse that. I’m sorry. I’m not trying to bust your bubble; it’s okay to go do the thing you’re talking about, but for goodness’ sake, get yourself out of debt and pay cash before you do it.