Author Topic: Online Master's Degree  (Read 1103 times)

rjbf65

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Online Master's Degree
« on: May 10, 2017, 07:18:31 AM »
DW is a teacher and looking to get a masters online.  A program she found and is really interested in is a 20 month program.  Basically there are 10 sessions at 8 weeks a piece.  Each session is 3 credit hours.  The total tuition cost is around $22-23K. 

As a teacher she would get a guaranteed bump in pay and it would be $4,000 per year.  So we are looking at a 5.5 to 6 year payback on this. 

Does it make financial sense to go for it since it takes that long for the payback to happen?   

threefive

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Re: Online Master's Degree
« Reply #1 on: May 10, 2017, 08:41:04 AM »
As a teacher of teachers, I think your wife found a very expensive program. The program you describe has an effective cost per credit hour of over $750. That indicates that it's probably a for-profit institution like Phoenix or something similar. She should first look at the options available through her state institutions. For example, my state has a plethora of options (on campus, and online) for in-service teachers. Most state university systems will, since in-service teacher education is actually a fairly good revenue generator for the uni. Our online cost per credit hour for state residents is less than half the cost of the program you describe, at about $300/hr. all-inclusive of fees, etc., a little less for on-campus courses. Even the non-resident cost is cheaper at $500/hour.  All of those courses are specifically designed to fit around a typical teacher's schedule.

threefive

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Re: Online Master's Degree
« Reply #2 on: May 10, 2017, 09:10:21 AM »
Now ... from a financial perspective: paying $22k for a 2 year program for a $4k bump in pay at the end. I like to look at things like this over 10 years periods. In 10 years you're at a net positive of $10k, or about $1k per year.

Now, assume you just took that $22k in tuition and invested it. At 4%, that's over $800 per year forever with no work. At 7%, you're looking at over $15k of growth in that same 10 years. Basically, you get the same salary benefit or more by not spending the money on the graduate degree. For a good in-state university program that costs closer to $300/hr., then the math changes more in favor of the degree program.

rjbf65

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Re: Online Master's Degree
« Reply #3 on: May 10, 2017, 02:50:31 PM »
Good info.  I'm going to push her to look at more options to make sure we can't find a better deal out there. 

Also setting up a 529 account to mainly transfer money into it for a short period of time and pay the tuition as time goes along.

Thank you for your help.