Figure Out Which Graduate Degrees Are Worth the Debt with the One-Year Salary Rule

Grad school is a significant investment that can really pay off—depending on your field. DailyFinance reports on the degrees with the best and worst payoffs, as well as a one-year salary rule for deciding whether or not to go for that advanced degree.

The big winners for grad degrees that greatly bump your earnings (as much as 190%) are in the health and sciences, while the worst degrees in terms of effect on your salary include studio arts, mass media, and computer engineering.

How to tell if going into debt for grad school is worth it? Use the "starting-year salary" rule of thumb:


Basically, prospective grad students should calculate what their expected salary at graduation, then borrow no more than that amount. According to the Student Loan Network, most federal student loans follow a 10-year repayment schedule, which means that students who limit borrowing to a year of salary can expect to dedicate about 10% of their paychecks to paying off their educational debts — a manageable percentage. By contrast, they note, students who borrow 15% or more stand a much greater likelihood of defaulting.

This way, you can pay off your student loan in ten years if you allocate about 10% of your paycheck to the debt.

Check out the full article for more details on getting the most bang for your buck with a graduate degree.

Grad School Math: Which Degrees Are Worth the Debt | DailyFinance