You Can't Afford the Master's

Amanda and her husband have $60,000 in student loan debt with a mortgage. They gross about $36,000 a year. He has $10,000 invested in his master’s degree, and he does not want to finish. Amanda thinks he should finish.

QUESTION: Amanda in Buffalo is a stay-at-home mom, and they have $60,000 in student loan debt with a mortgage. They gross about $36,000 a year. He has $10,000 invested in his master’s degree, and he does not want to finish. Amanda thinks he should finish. Dave doesn’t think they can afford it.

ANSWER: No, he doesn’t need to go after his master’s right now. He needs to clean up this mess. If he’s doing it to get an immediate raise in family income, then you can justify it. But you guys can’t make any more investment in vague educational goals. You’ve done enough of that.

Of course I’m saying throw the $10,000 away because you’ve planned so poorly. I mean, yeah, throw it away, if that’s what you want to call it. Throw it away. That’s exactly what I’d do with it. The point is not the $10,000 that’s already invested; the point is your family is starving to death. You’ve got $60,000 hanging over your head. The last thing you need to do is go spend more money on education he’s going to use when he goes into retirement. That’s just silly. It doesn’t make any sense at all.

Go back and get your master’s later if you want your master’s. But you start and don’t finish, he goes and gets a degree, and you’re $60,000 in the hole. You’ve got to have better payback on your educational spending. Then it’s an investment, and that makes sense. So yeah, throw it away for now. It doesn’t cost you anything more today if it’s thrown away—and I’m not positive it is. I’m not sure you can’t use it and finish those classes at some point. You may not be able to finish on that catalog that you started, but they’ll apply in some way or another. But if it’s thrown away, it’s thrown away. He’s not using it until retirement anyway. You’ve got to clean up the mess he’s got today.