I used to hear it every day at work – people saying they wished they had never gone back to school…
It’s because I work in the student loan servicing industry, and I talk to people about making their student loan payments.
Even with the new Income Driven Repayment Plans, some people who have a college degree are still having a hard time finding a job that will compensate them enough to justify their having gone back to school.
And here I am thinking about going back to school myself…
Am I Too Old to Go Back to School?
I’m seriously considering it because my employer announced at the first of the year that they would raise their annual tuition reimbursement from $2500 to $3500.
Believe you me, my eyes lit up when I read that memo!
$3500 annual tuition reimbursement?
That’s pretty cool on top of the other benefits we receive, like medical/dental/eye insurance, paid time off, pension, and a 401K.
Why Employers Provide Tuition Reimbursement
According to Luke Landes, author of Tuition Reimbursement: A Benefit for Some Employees and Employers, most employers provide tuition reimbursement to retain their employees not lose them to someone else. He says that’s why most companies require employees to earn degrees that are job related – ones that will enhance their position within the company and add value to the company’s bottom line.
He also says companies that provide tuition reimbursement usually require a grade of C or above in order to receive the benefit and that most require employees to stay at their job for at least two years after completion of the program in order to dissuade any desire to get a totally unrelated degree and up and leave immediately afterward.
My own employer has these same restrictions.
This will require me to get a degree in the business field – one that is far removed from my earliest dreams of becoming an educator of literature and the language arts.
So I have been looking at these programs:
You will notice that the links go to Grand Canyon University, located in Phoenix, AZ, where almost all of their courses are online with a Christian bias.
This suits me just fine…
It is where I was studying for my degree in English Education with a 4.0 GPA before I got the job I now have.
So most, if not all, of my Gen Ed courses have been completed.
And this means I already have $24,136 worth of student loan debt.
You may also notice here that the average total cost of a Bachelors degree in Business at GCU is $56,350, plus $2830 for books and supplies.
And this is where I falter too (as most others do) and ask myself: Will there be a satisfactory ROI (return on investment) if I do this?
The only way to figure this out is to do an old fashioned Pros and Cons analysis…
1) $3500 tuition reimbursement
If we do the math, it will look something like this:
$56,350 (cost of program) – $20,000 (amount of original student loan debt) (yes! the rest of the current balance of $24,136 is interest that has accrued while being in a deferment/forbearance and the IBR program the last four years) = $36,350 left in future college costs
$2830 for books and supplies minus let’s say $830 for books I’ve already purchased for the Gen Ed courses (I know I paid more than the $830, but I’m going to calculate on the high side for practical purposes) = $2000 left to purchase in books and supplies
$36,350 + $2000 = $38,350 total future college costs
Now, to figure in the $3500 tuition reimbursement I will have to figure out how long it will take me to finish a 48 month program (for those that are attending full time and me being able to only attend half time).
If memory serves me, I have already attended two academic years at GCU ($10,000/yr), and some of the courses I have taken are not going to count toward a business degree – like Shakespeare.
So let’s say I have only attended a year and a half’s worth of classes that will count.
This means I have two and a half years left (if I go full time).
But I can’t go full time.
I have to go half time.
And half time means 5 years left….(2.5 X 2 = 5 yrs to get my bachelor’s degree!!)
Going back to the $38,350 that’s left for expenses and divide that by 5, and we get $7670 for future college costs per year.
$38,350/5 = $7670
Subtracting my annual $3500 tuition reimbursement, and I will only need to personally cover $4170 per year.
$7670 – $3500 = $4170
$4170 multiplied 5 times equals $20,850 in total additional student loan debt (or money out of pocket).
$4170 X 5 = $20,850
2) Now, if we take into consideration the IRS education tax credits and deductions, I could receive some additional financial benefits from going back to school.
It would look something like this:
I could claim up to $2500 for the American Opportunity Credit (until 2017) -or- up to $2000 for the Lifelong Learning Credit, where either would reduce the amount of taxes I would need to pay for each year.
PLUS I could take up to $4000 in the Tuition and Fees deduction, where it reduces the amount of my income that is subject to tax, thereby reducing even further the amount of taxes I would need to pay for the year.
$4170 (I still owe) – $4000 (Tuition deduction) = $170 (I still owe)
$2500 (American Opportunity Credit) – $170 (I still owe) = $2330 (tax refund?)
So, all in all, I might be able to break even or possibly come out ahead!?!
3) I would FINALLY be able to say, ‘I have a college degree!’
4) No doubt, the knowledge I would obtain would make me a better employee.
1) By the time I obtain that coveted Bachelors Degree, I will be 53 years old!! (OMG!)
2) There would be no guarantee of a promotion.
Having had a conversation with my Supervisor about this already, I KNOW there is NO GUARANTEE I would ever get a promotion or higher compensation from said degree. So it makes me wonder ‘what’s the point?’.
In fact, there are many examples already where people have been promoted within our company without any additional outside education. Sometimes it was just a matter of how long they have been there and/or their previous work experience.
3) Going to school, even half time and online (which is supposed to make it more convenient) would take up A LOT of my time.
This means I will have even less time to blog. (Unless…I do what Pat Flynn did and blog my way through school, sharing with the world what I learn.)
And I might probably even have less time to read good books like this one…
What do you think?