Is it a good time to go to graduate school?: understanding the economic moment

Davis: Hey everybody, this is GRE Bites. My name is Davis, and I’m an educator with over ten years of experience.

Orion: And I’m Orion, the founder of StellarGRE.

Davis: We’re here to bring you your weekly bite-sized episode on GRE prep and grad school admissions. Check out our top-rated GRE self-study program at And don’t forget, you can use the code “BITES” for 10% off any membership.

When’s the best time to go to grad school considering the larger picture and things happening in the world?

Orion: It’s an excellent question. I think that right now is actually a great time to go to grad school. There are a number of very simple economic reasons behind that. When we’re in a bull economy, when there’s lots of money, when the economy is robust, now that is not the time to go to grad school. That’s taking yourself out of the job market. It’s reducing your lifetime earnings. Because the getting’s good in those moments, the currency is flowing, as it were. You don’t want to take yourself out of that situation. To prepare for that moment, it’s a good moment for action.

By the same token, if market conditions are poor, if hiring is stagnant, if you’re in a bear economy, it’s often a good idea to kick the can down the road. In a few years, if you can go back to grad school, learn some skills, and increase your future salability by having a graduate degree, then hopefully, in one to three years, for getting a master’s, the economic conditions will have improved, and you will be in a better position to make good use of those conditions.

Davis: So, okay, let me just get this straight. You’re fresh out of undergrad, looking at your options. If you have a marketable skill that can enter the job force in a moment of national or global economic prosperity, go jump into the job market and defer your future education for a little bit. Just because, like you said, the getting is good.

Orion: Well, I would say that if you have a marketable skill that you can profitably leverage in the market, regardless of what’s going on globally, you should take advantage of that. Because the whole point of grad school is to prepare you for that. And if you can get it without going through the preparatory phase, so much the better. You’re not going to save just years, but hundreds of thousands of dollars, and you can cut right to the chase. And there are opportunities for folks like that even during recessions, even during a bear market, because it depends on individuals and skill sets and things like that. There’s always going to be opportunities; there are just fewer opportunities on the whole when we’re dealing with a recession and in a bear market. But then, in this case, when we’re dealing with the recession and bear market, if there are people on the fence who would like to go back and, if you’re saying, increase their skill set, continue their education, prepare themselves for higher earnings later, this is the time to do so, because it’s not a very favorable time to enter into the job market. There’s another great reason why now is a great time to consider grad school, which is that grad school is at a discount.

Davis: What do you mean grad school is on sale, my dude? Is that because of what student loan interest rates are?

Orion: So, most people are going to be taking out student loans in order to go back to grad school. And student loans, I think, are fixed at around six and a half percent, which is high, but not as high as, let’s say, credit card debt, for instance. So, folks should always be very cognizant and prudent about taking on hundreds of thousands of dollars in student loan debt at, you know, a six to seven percent interest rate. That said, by recent estimates, we’ve surpassed 8% inflation, and it’s going up to, you know, close to 10%. So, if inflation is outpacing interest rates, then basically the money is on sale on some level. Like, if you don’t take out the debt, your money will deflate in value faster than the interest will accrue.

Davis: That makes sense.

Orion: So, yeah, okay. So, you also don’t have to pay the loan back right away. So, hopefully in a few years, inflation will have gone down so that your money will be worth more later, to pay it back, as opposed to right now.

Davis: So, student loans – how does this work with, like, government incentives for student loans or grad school? Does that fluctuate over time? Are there a few grad school interest rates that aren’t fixed for grad school? Is that the same for undergrad?

Orion: No, undergrad is different. So for grad, they call them Grad PLUS loans. Okay. And when I was in grad school, they were fixed at around 6.5%. That may have changed, but I do know that they are fixed. There are some incentives in certain professions for loan forgiveness. Like, for example, I got my degree in psychology. If I were to have worked at certain, let’s say, community mental health centers for a certain amount of time, then they would have forgiven the remainder of my student debt, because it’s sort of like a public service. There’s also always the military. I was tempted by the military as well; they often pay for higher education. The military offer was phenomenal.

So, I was now close to $100,000 in debt, and they said, “We’ll just make it go away. We can just push a button, and that debt, no one has to know about it; you pay for it with four years, or well, you get, yeah, eight years or whatever, if you’re potentially more”.

Davis: Yeah.

Orion: And you might be deployed; you don’t have a lot of control over that. I mean, it’s the military; you kind of give over a lot of your rights and freedoms to enter into that organization and to serve its interests. But it was also a six-figure salary. It was an officer commission. I mean, it was, it was pretty sweet. And I did consider it for a while.

Davis: I have personal friends, one really close, who went straight out of undergrad into the military to pay for his undergrad student loan. And he ended up going to officer training and ended up with eight years, but he wasn’t in active duty by the grace of his circumstances. It can be a good option for some people.

Orion: I’m not putting down the military here. But it’s interesting that you bring this up about the timing of when to go to grad school as a consideration for making the choice to go. So, in my understanding, it’s like, you know, you’re coming out of undergrad, and you could just have academic aspirations, you want to study and arrive at the peak of your field of interest. You have, you know, kind of just like, well, there’s nothing else to do, can’t get a job. So, let me continue school, kick it down the road, like you mentioned. And then there’s also looking at grad school seriously, as, as a resume builder, as a toolkit to make your future marketability in the job marketplace as high as possible.

And that’s interesting. That’s the best reason to go back to grad school, in my opinion. The first one, not so much. I usually tell folks who want to pursue their passions to get a library card because they can do that for free, on their own time. It’s true, and not necessarily surrender years of their lives and hundreds of thousands of dollars. Following your passion, to my mind, is not a sufficient reason to go into grad school with all of its liabilities. The second one is good. It’s better, because you’re basically hoping for better economic fortunes in the future. Now, it’s interesting, because I mean, we’re talking about grad school. It could be a one-year master’s program, or it could be like an eight-year PhD program, right?

Davis: Yeah.

Orion: And the hundreds of thousands of dollars price tag is usually for a quality grad school, or is that just kind of a general across the board? No matter? You’d be surprised that the top-ranked programs in most disciplines are not much more expensive than the 50th ranked programs.

Davis: Dang. Okay.

Orion: Grad school is, it’s a racket, man. Every GRE really matters to get into those top levels. The GRE does really matter because those are the programs that will probably never waive the GRE requirement, because they have so many applications. The GRE requirement has been waived in recent years, but usually for lower-ranked programs who are kind of desperate for enrollment. And so they’re trying to remove the obstacles for the applications.

But Stanford, Harvard, they’re never going to be at a loss for interested people. And so they will almost certainly always require the GRE because they have to find a legally defensible way to reject otherwise qualified applicants. And so that’s just how it is. But it’s interesting because this could be a one-year ordeal, it could be a seven-plus year ordeal. And now you have to have considerations over the course of a lifespan. Because it’s one thing to spend, let’s say on average, five years of your life in your 20s preparing for your career versus in your 30s versus in your 40s.

Davis: So, there is some flexibility to defer grad school for a good economic moment. But there’s generally a window that people can go back to school at any age. But on the whole, people don’t because they use grad school as a springboard for their career. And the middle ages of their life is when they get to reap their harvests. They’ve done their preparations when they’re younger; that’s generally not the best time to be preparing; you should be reaping what you’ve sown at that point, you know what I’m saying?

Orion: Yeah. So that’s why the vast majority of people go to grad school in their 20s, which kind of makes sense. So if you’re 20-something and you’re considering it, you have some flexibility. You don’t necessarily have to go this year if the larger economic forces don’t make sense, but you probably don’t want to defer it six years. So it’s a bit of a gamble. But right now, the financial situation is so bad, that it will probably improve in the future. You know, it’s like regression towards the mean. Inflation is at record highs. So it’s unlikely that next year will be even higher; it’s most likely that it’s going to come down. So this is the time when money is basically on sale. If you can invest the currency into a fixed interest rate that is lower than inflation; does that make sense?

Davis: No, it makes a lot of sense. I appreciate your time explaining this topic.

Thanks, everybody, for tuning in. We’ll be back next week with another bite-sized episode of GRE Bites. If you have a topic you’d like discussed on a future episode, let us know at And if you’re ready to take your prep to the next level, check out our top-rated GRE self-study program at You can use the code “BITES” for 10% off all memberships there. Talk to you soon.

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