Should We Pay For Grad School?

John and his wife are trying to decide if they should pay for one daughter's medical school and another daughter's MBA. Dave suggests there may be some alternatives to getting this education.

QUESTION: John in Dallas and his wife are trying to decide if they should pay for one daughter’s medical school and another daughter’s MBA. They’ve paid for both of their college educations but aren’t sure they can afford the medical school and MBA. Dave suggests there may be some alternatives to getting this education.

ANSWER: It’s not a good idea for them to take out loans. If they’re going to go through medical school, I would put them in the M.D./Ph.D. program so that they can be working on a Ph.D. while working on the M.D. They become an employee of the school and thereby go through medical school free. It’s very hard to get into but very much worth it. There are several of those around the country. As far as the MBA goes, it shouldn’t be that expensive. It ought to be something they can work their way through.

It’s going to be a little tough for you to cash flow these two things. You really don’t have the money. I think these kids are going to have to find other ways to do these things. Somewhere in this discussion, there’s got to be this understanding that money doesn’t just keep flowing. In other words, it’s not endless. Money is finite. It has to come from somewhere, and we don’t have piles of money over here. If we do, we end up retiring and having to eat Alpo.

If you start dropping $50,000 in an MBA and $200,000 in a medical program, half of your liquid net worth is gone. We’ve got to have some adjustments of expectations with these kiddos and start trying to find other ways they can fund these things and why it is that they’re doing them. Is this the only way to do it? You’ve got to look at all the different angles on this from an education perspective.

I’m not against education. I am against this vague sense that it’s always worth it.