I used to fantasize about what it would be like to attend Harvard Business School.
I could see myself wearing Crimson and living in Cambridge.
I pictured exotic trips with friends, interviews with top consulting firms, and a big fat salary post-graduation.
In late 2012, I bought a GMAT prep book and was ready to buckle down and start studying.
Considering Student Loan Debt and the MBA
In early 2013, I started to acknowledge that I still had $20k+ in student loan debt from undergrad.
I was coming up on my two year anniversary of graduation and yet I had made little progress on my student loans.
One night I was googling student loan debt and came across Joe from No More Harvard Debt.
Joe was a Harvard Business School graduate who left school with over $100k of student loan debt.
He lived a life of expensive cars, meals, and dates until he completely transformed his life and paid off his debt in 10 months.
His blog tracks his debt pay off but more importantly, the personal growth he experienced in the process.
This blog influenced me greatly.
I was surprised to see what was behind the curtain in the life of a Harvard Business School graduate.
It was also the first time I thought about the $100k of debt I would take on by going to business school.
I decided to table my business school pursuits until I could get my undergraduate student loans under control.
I went into full on beast mode and paid off over $89,000 of debt in 18 months.
Realizing Technology Careers Rock
While I never saw myself pursuing a career in technology (my college major was Political Science), I fell into the field and I enjoyed it. I eventually led a team.
I started to realize that there were other ways to make good money and obtain a management position than getting an MBA.
Pursuing a Technical Degree
Now that I was responsible for leading a team, I wanted to have the credentials to back it up. I needed a more technical degree.
While I don’t regret getting a liberal arts degree, I definitely see the value in getting a technical degree.
When I look at schools with the top return on investment, I see schools such as Colorado School of Mines and Georgie Tech top the list.
I started researching graduate programs in Computer Information Systems.
Going Part-Time to Minimize Opportunity Cost
If I took my salary and projected raises for two years, then added the cost of school on top of that, I was looking at a loss of nearly $300,000 to go back to school.
I can think of 100 better things I could do with $300,000 (like invest-ha!)
I decided to apply to a part-time program.
It was definitely the right choice for me.
In the two years that I would have been in a full-time program, I doubled my salary and received two more promotion opportunities.
Related: How I Went From $60K in Debt to $200K Net Worth in 1 Year
Finding the Right Part-Time Program
At first, I planned to apply to a program at a local university.
Except the school wasn’t thrilled about accepting a student with a non-technical undergraduate degree into the program.
After a harsh call with the school, who said “I wouldn’t be able to handle the rigor of the program,” I had to come up with a plan B.
(This conversation upset me greatly. I don’t like when others place limits on me).
It all worked out in the end though.
My plan B was an online program at a good school.
As a bonus, the program did not require the GRE or the GMAT for admission. I saved countless hours of prep and money.
My Fears About an Online Program
At first, I was hesitant to apply to an online program, especially one without strict admission criteria, because I thought it didn’t “look as good” as a full-time program.
My fears turned out to be untrue.
Education is changing and online programs are gaining respect and acceptance.
My degree has added greatly to my resume.
The degree has helped open doors for me.
Maximizing Tuition Reimbursement
Many employers offer $5,250 worth of tuition reimbursement each year.
If you switch jobs in a year, you may be able to collect $5,250 from each employer.
Overall, I received nearly $20,000 in tuition reimbursement over three years.
I’ve also waited to submit my Fall tuition reimbursement until January of the coming year, which is another saving tip you can use to maximize tuition reimbursement.
I’ll be eligible for another $5,250 for 2017 which will bring the total to around $25,000 total reimbursement for the degree.
Related: How I Saved $26,000 in 7 Months
Tax Deductions on Top of Tuition Reimbursement
I did not quality for the American Opportunity Credit (since I was in grad school versus undergrad), the Lifetime Learning Credit (my income was too high), or the Student Loan Interest deduction (my income was too high).
I could have figured out how to use a 529 for my own education but didn’t research that option at that time.
Since my first employer only reimbursed 80% of my tuition, I could though deduct the 20% of tuition I had to pay out of pocket as work-related expenses.
There are certain criteria that need to be met in order to deduct the expenses as work-related such as my employer not requiring the education for the job and meeting a certain percentage of overall income.
Check out the IRS Guide on Tax Benefits for Education for additional detail on the options available to students.
Choosing Classes with My Wallet
I also found a way to lesson the cost of the degree by making strategic course choices.
I noticed that some math and other foundational courses billed at a lower rate than the other graduate courses.
I switched concentrations mid-degree so that I could take advantage of the lower rates.
I also requested and ultimately got a more expensive required course waved (by demonstrating that I had equivalent work experience to the course) and replaced it with a less expensive course.
I chose cheaper electives where I could.
I still learned a good deal in those “cheaper” courses and don’t think I missed out by not choosing the more expensive courses.
Do I Regret Not Getting My MBA?
In no way do I regret not getting my MBA.
It’s been over 5 years since I graduated college and in that time, I’ve achieved the professional and financial success I hoped for at graduation.
I’ve seen many acquaintances from undergrad pursuing their MBAs and going on jealousy-inducing but crazy expensive networking trips. I was able to achieve a post-MBA salary without the cost of tuition, expenses or the opportunity cost of pausing my employment.
As I’ve discovered through travel rewards, there are many ways to get to the same result.
I don’t doubt that MBAs help people get ahead, it just wasn’t necessary for me to get an MBA to get ahead.
I just finished the last course in my program earlier this month and will graduate with my M.S. in January.
Are MBAs Worth It?
In an age where the internet has made it easier than ever to actually learn and pick up new skills, many people are questioning whether an MBA actually holds that much value. In the old days it was something that you could use to signal to a potential employer that you had credentials and certain knowledge.
Now, there are other ways to demonstrate to an employer that you can provide value to them. For instance, I often recommend to millennials that working on side projects is actually one of the best ways to get your resume to stand out from the crowd when applying for a job.
The reasoning is simple: Very few people actually work on side projects. By working on one, you can demonstrate to an employer that you are able to take initiative and build something from scratch purely out of your own discipline and curiosity.
It used to be the case that earning certain degrees were the only way to get past the gatekeepers at jobs. Nowadays, thanks to the internet, it’s possible to pick up new skills and build things without getting a formal degree.
At the end of the day, you want to be able to convey to an employer that you can be an asset to their company. It seems that there are better (and cheaper) ways to do so besides getting an MBA.
Do you have any tips on hacking your education? Are MBAs worth it?
- How to Make a Backyard Movie Theater with a projector screen - September 19, 2020
- HONEST Passive Income Planner Girl by Michelle Rohr course review - May 25, 2020
- 35 Pink Aesthetic Wallpapers with Quotes and Collages - May 20, 2020
Completely agree! I did the math and came up with similar numbers. Unless you want a completely new direction into the business world, an MBA is a bad choice. For example not only do you pay close to $100k per year to get an Iny League MBA, you also make $0 during those two years. Assuming you’re smart enough to get into Harvard, Yale, etc, you whould be making $50-100k per year minimum at the time you’re accepted. As a liberal arts major (History), it is tough to find a good career without some sort of grad school. Tech sales is what worked for me!
Gotta love tech! I’m sure there are MBA students who work while getting their MBA full-time but they are probably the exception and not the norm.
I think we tend to believe what’s best for us based on our experiences without fully knowing what would happen if we went the other route.
I got my MBA from UC Berkeley’s Haas School of business over a three-year period because I was working a full-time job as well. My employer paid about 83% of it and I was able to deduct the rest of the cost.
In retrospect, it was one of the best investments made because it was cheap for me, and I gained a lot of knowledge and confidence at a crucial period my life. With confidence, I was able to perform better at my job which led to a promotion.
I love education now. It’s one of the most worthwhile investments someone can make.
But if I didn’t get my MBA, I’d probably feel that my undergraduate degree was just fine as well.
I got it admit, I’m happy to see my degree hanging up on my office wall!
Sam
Totally agree! It’s difficult to know how things would have turned out should we have chosen a different path. That’s awesome you were able to get your MBA reimbursed! I’m convinced part-time school is the way to go in order to take advantage of the tuition reimbursement.
I have done the math as well. Lot of coworkers leave to go get their MBA at top-10 programs. The math just doesn’t make sense for someone like myself with a decently high income and a short projected length of career after the MBA. If I wasn’t on the FIRE route, then it would definitely make more sense. But I just couldn’t wrap my head around spending a half of a million dollars including opportunity cost on one.
Yup the higher my income creeped, the less excited I was to jump into school. FIRE definitely makes you re-evaluate your spending on education since your working life is hopefully short(er).
Wow congrats on finishing the course this month Julie, this was really a boss move!
Doing your part time program while working is a excellent choice since your employer can also help with the tution fees. Of course it is very tiring to work and study at the same time but I am sure it all paid off in the end!
Thanks!! This year, I moved and planned a wedding too which was crazy!
Hello,
I am also interested in learning which specific graduate school you attended. Sounds like it was a great program
Great post, Julie, and great choice! As I mentioned on your Instagram, I have a similar story with law school. My entire life I planned on going to law school, but just couldn’t pull the plug when I received my acceptances and realized the loans I was looking at. I, too, have some undergraduate loans. But, I’m actually grateful for having those loans because it made me take the price tag on graduate school much more seriously. I don’t think we’ve lost much, though! Gone are the days of and MBA or JD equating power and wealth. Thanks to the internet, personal finance, and entrepreneurship, there are so many less expensive (and honestly, more exciting!) ways to become self-made. At least, this is what I’ve come to believe. 🙂
Keep rocking, girl! You’re so inspiring and have us all cheering for you.
– Leah from www.urban20something.com
It’s so crazy how career paths have changed! I remember playing with toys when I was younger and the only career paths were fireman, doctor, lawyer, etc. It’s totally changed and online careers have changed the game. Thanks for the kind words!
Hey there, thanks for posting this! Just came across your blog from the Mad Fientist’s podcast. Would you mind possibly sharing the specific program you went to? It sounds like it was possibly Georgia Tech’s online Computer Science Masters degree? I’m currently looking to go back to grad school for computer science, and would love to hear about other people in similar situations to me and how they went about getting their education.
Hoping to hear from you!
It’s in CIS – send me an email and I’ll give you the details 🙂
Julie,
Thanks for putting together such a great blog. I’m also interested in the CIS course you went for. Do you mind sharing what it was?
I am also interested to know!
Working for a big consulting company, I’ve seen lots of people make the decision to pursue an MBA while still working. For some, they just seem to think it is the thing to do in order to stand out. I’d argue that it doesn’t actually help much. There’s no getting around the fact that school puts them into a situation where they have a massive time commitment beyond their work, and therefore the work often suffers. It almost has to. Then, upon graduation, I know several people who did not get commensurate salary bumps. They ended up leaving, and presumably had an easier time finding new work with their MBA credentials, but I just don’t see a big ROI for many.
Doing school and work at the same time was super hard, especially this year for me. There were so many nights I stayed up until 3-4AM doing my homework. I definitely can see how work can suffer by taking on too much like you mentioned.
My sister was pretty gung ho about getting an MBA a couple years back. She did the math on what it would do for her finances and seemed to accept it, but I challenged her why she was actually doing this. “What are you hoping to gain from having an MBA?” “Maybe you should invest in a single business or accounting class first to see if you even like it?”
Turns out she just didn’t know what she wanted to with her life, and a “MBA seemed like a good idea”.
And…she stopped before she started.
Some friends told me I was being a jerk, but hey, my sis doesn’t have six figures in graduate school debt and higher amounts of stress.
I am mildly interested in higher education for increasing my knowledge, but until I can make the numbers work (like finding an employer who will bankroll it…), I just don’t see it as a good financial investment for me personally.
Especially since I’m not interested in any sort of management role, I feel like additional degrees would just work against me in the workforce. Who wants to get the “you’re overqualified” response when seeking work?
I have influenced family members with certain decisions too (and sometimes I feel guilty for that) but I think this one is a good decision to preach. Maybe people go back to school to figure things out but it should be something you do when you’ve already figured out a plan.
I’m happy to see you did the opportunity cost calculation. I’ve helped a few friends think through this decision, and the total cost of tuition and not working for two years is staggering: as much as $500k for one friend! She ultimately decided to go anyway, but I would guess a lot of people don’t even consider the massive financial trade-offs. For me, it wasn’t worth it — and speaking to a different point you wrote about recently, even having my employer pay for it wasn’t worth it to me in light of the commitment I’d be making to work there after school.
Ahh yeah the employer pay back contracts are scary!!
Great post! Could you please share which online program you went with? I’m looking for an online CS program.
Mine is in CIS. Send me an email and I’ll give you the deets!
Thanks! I enjoyed reading this post. Could you elaborate a bit on the online program you completed? How hard was it with your non-technical background? Would you recommend it for others in a similar situation?
Yes, I would love to know your master’s program! I’ve looked a good bit at various online Master’s degrees in CS or CIS. The CS degrees seem very competitive. CIS less so.
Thanks, Fergus
The degree is in CIS. There were math components, coding, data analysis, and a bit of writing. None of that was too hard for me but it was time-intensive. The hardest part is just meeting the weekly work schedule with homework, and quizzes, and labs. If you want more information, feel free to email me. I would recommend the CS if you want to be an engineer who codes. CIS for anything else.
I am almost 50. I also passed on an MBA. My undergrad was degree was Bus Admin with emphasis in Accounting and Minor in American Lit. Once I got on with my current employer, my salary increased rapidly. Pretty soon I was contemplating passing up 2 yrs salary & paying 2 years tuition, all for a $10-20K Salary bump. I am still working with the same employer, just clearing 6 figures, with a NW well over $1M, and am working mostly to put the kids through college, and pay down debt, which should take 7-10 years. That’s with a wife who stayed home with two kids for 5 years, then went back to school, so we gave up $ for stability and time with kids. My job is admittedly always at risk, but that’s part of working for a big employer these days for a lot of us.
Congrats on the net worth and for devoting the time to your family. I hope to someday have the financial stability to step back in my career! Glad it all worked out of your skipping the MBA as well. I had the same experience where I looked at the starting salary post-MBA and it wasn’t that far off from where I was at the time. I ended up hitting that target before the two years of school would have been over.
I think you made some very smart choices! I got my master’s in HR right after undergrad, and I regret it. I ended up with $75,000 of student loan debt total, and like you mentioned, the opportunity cost is huge. Those two years I spent in grad school were years I could’ve spent gaining work experience and increasing my income.
Oh no! That’s a significant amount of debt! The year after undergrad is so vulnerable. I made some suspect choices but luckily none of them brought me into more debt… the additional debt came later ha!
What online university did you use if you don’t mind my asking ? I’m not a millennial, gen-xer. I feel like I will not get ahead and out of low wage jobs without furthering my education, yet I face age discrimination and a lot less years to make up debt, so I am reluctant to take on debt for education. Enjoying your blog, learned of it through the Mad FIentist.
Yes, I definitely don’t recommend taking on debt for education! No problem for asking – send me an email and I’ll give you the details on the program!
Hi Julie,
This past weekend I graduated with a BA in International Relations. While I have a plan for next year, I have been looking into a variety of Masters programs. Like you, I have come to the conclusion that the tech industry is the place to be. I have been looking into getting an MS in Computer Science, but I have been considering overseas options as well as domestic ones. Did you ever consider going overseas to get a degree? Any advice would be appreciated!
Best,
Anna Kareis
No, I never did but that could be another great option (and a fun one!)
There’s tons of more affordable, non top-10 online MBA programs out there. In my circumstance, the programs that I’ve looked into are roughly $12,000 for an 18 month program from credible programs. IMO, obtaining a 20- 30% salary bump for $12,000 is a pretty good ROI. IMO having an MBA is all about having that degree and those three letters after your name, which most tend to be the same anyway, regardless of where they’re obtained from. Relationships are built with networking and outside the job anyway.