I just paid my student loan a couple of days ago, which basically means I hit a button on the loan website and depleted my financial resources for another month. In the moment, I started to reflect on the debilitating costs of graduate school, costs which most people don’t consider even later in their lives after they’ve graduated. Most academics that I know have a deep sense of nostalgia for their days of poverty, where living on ramen, cheap beer, and the company of good friends in the same boat got them through until the next measly TA paycheck. They also have a healthy resentment for how paying student loans back takes money directly from their pockets in the present. This is all at the level of obviousness. But the unacknowledged costs add up to a substantial amount of cash, yet no one ever includes them in any accounting. When you compare the cumulative financial drain of graduate school to the financial gains of other professional careers, it’s rather boggling.
First are some of the more predictable professional expenses: books (not textbooks, but books you need to read to stay current with your field), journal subscriptions, memberships to professional organizations, travel and registration fees for conferences. These are things that you have to spend money on, and the expectation for these things is greater and greater as the job market gets more and more competitive. Few of these costs are subsidized by academic departments. Take conferencing. Professors often wax nostalgic about piling in a ton of students in one hotel room and packing a rental car to overflowing all in the name of academic pursuits. For those bodies in the moment, it’s pure hell. The forced intimacy can be fun or it can kill relationships. Either way, graduate students bear the cost of these expenses. Compare this to, for instance, lawyers. Most law firms pay for training, many pay for the bar exam or review courses. Even in difficult economic times, companies pay for the professional development of their employees. So, this is one hidden cost of graduate school.
Second, in my experience, the constant need to juggle money forces graduate students into making bad decisions, which they sit comfortably with because the consequences are deferred. Bad choice #1: Most graduate students take out the maximum of student loans. Living from student loan to student loan is like living from welfare check to welfare check in hyperdrive. The “first of the month” syndrome is exponential when it’s a “first of the semester” thing. It makes for bad money management practices. You buy your new computer in September and live on Ramen in December. In addition since summer teaching is always sketchy, they live on credit cards when there’s no school. Also, graduate assistant paychecks are a shell game. You go back to school at the beginning of the semester but it’s often four or five weeks before you get your first paycheck. Credit cards wear thin and people don’t think of the long term consequences of maxing out multiple cards to manage the lean times. When the loan check comes in again, there’s a compulsion to splurge. Thus the graduate student welfare check cycle begins anew.
Between loans and credit cards, by the time you graduate, you’ve accumulated an avalanche of debt. My monthly payment is at least the equivalent of a car payment, if not rent. Now that Obama has passed new financial aid laws, I will now have the opportunity to pay off my loans before I retire. Prior to this new law, my debt would have followed me into my seventies. I have always been thankful that your student loan debt dies with you.
Another unacknowledged consequence of taking out max student loans semester after semester is that you move into a false sense of what your standard of living is. In your mind, you’re living on a TA salary. In reality, you’re living on a TA salary+loans+credit cards, which is considerably higher. So, when you finally do receive the economic bump of a real job, you don’t feel the difference because you simultaneously lose several thousands of student loan dollars and you deduct the loan payment. Often, this perpetuates the bad spending habits of living beyond your means. After all, you worked hard and now you’re entitled to a better standard of living, and so you deserve a new car, or better furniture, or what have you, and you buy, frequently on credit.
Then there is the delayed effect of postponing things that need regular attention. Dental care is the most pressing. Few graduate students have medical or dental care. Though most universities have decent student health centers for colds and birth control, longer term health care gets neglected due to expenses, and that often impacts people later in life. For instance, postponing dealing with cavities until you need major dental work is something many graduate students I know have faced. I delayed dealing with a cavity until I required a root canal and crown, which I couldn’t afford. I had the tooth pulled. Over the long run, that causes greater problems because your teeth shift. Moreover, most dental policies have a missing tooth clause which means they won’t pay for a bridge or an implant if you had a tooth removed prior to the time your insurance took effect. Replacing that tooth cost me an arm and a leg.
There are also some cumulative effects that result from living in poverty that your college classmates don’t experience as they advance in careers and accrue equity. So, let’s accept that the average time students take to earn a PhD is ten years. Let’s assume that you don’t fall victim to the student loan game, and that you are frugal and financially cautious as you pursue your degree. Now compare the financial gains of a graduate student to their college classmates. There are several financial drawbacks.
First, graduate students live in a transient state of near-poverty. They move constantly, to cheaper apartments, to cooler rent houses, to larger places where they can share costs with roommates. This transient life is accompanied by slogging around shoddy hand-me-down furniture, toxic press wood bookcases from Walmart (or Target if you’re feeling profligate), and “soft” furniture from garage sales (soft means that it falls apart at the slightest move, and is therefore not easily transportable to your new digs). Compare this to college classmates who began purchasing quality furniture, the type that lasts a lifetime, within a couple of years of graduating.
Similarly, college pals have bought their first house long before the average graduate student, which means graduate students are far behind their peers in accruing equity. Even if the housing market is a bust in today’s economy, owning property — your own home — is the foundation of building wealth in this country. And if disaster strikes, you can borrow money against that equity.
Most significant, though, is retirement.
Most graduate students don’t pay into social security. For ten years.
Moreover, for ten years, graduate students do not pay into their retirement. Building retirement funds early is crucial to financial security later in life because retirement funds grow exponentially (like yeast, they say). So academics accrue no social security and they suffer from a weakened retirement fund. Tragically, so many academics (like me) put their retirement in TIAA-CREF, and now face a depleted nest egg. People console themselves by saying it will grow again, but if you remember the yeast principle, that’s a lot of lost funds. Between minor but ongoing expenses, the accumulation of debt, and the lost time on accruing equity, graduate school costs much more than we realize.
Graduate school is a wonderful, challenging, intellectually invigorating experience. The academic lifestyle for grad students and later for academics gives you great control over your time and great freedom over how you work. This is a huge benefit when compared to working in the veal-fattening pens of a corporation. I think most academics would tell you that this reward is well worth the deep costs. But now that the PhD applicant pool has far outgrown the available jobs and so many academics are faced with a transient life of adjuncting and visiting positions, I can’t help but wonder whether or not it’s worth it for many people.
When people ask me if they should go to graduate school, my answer today is very different than it was ten or fifteen years ago. If you have money, don’t mind a low standard of living and a life of transience, then the life of the mind can be a fabulous lifestyle. But now more than ever, people should weigh the costs carefully.
