Are you thinking about applying to a PhD program? Are you already a doctoral student? PhD is a huge investment of time and money. So make sure you spend 15 minutes of your time reading this blog devoted to PhD program success and survival tips. I'm confident that these tips can save up to 10 years of your life, up to $1,000,000 of your money, and, most importantly, your physical and emotional health.

Friday, March 27, 2009

How much does it cost to get a PhD degree?

A very common misconception is that getting a PhD degree is free. There's a saying that goes like this "free cheese is only only found in the mousetrap". Why would something valuable be offered free of charge?

It is true that most doctoral programs offer full tuition waiver and some sort of a stipend (usually around $20,000 per year). Before you accept an offer from a PhD program, you have to consider some of the factors that don't seem to be obvious. First of all, you really have to "read the small font". Just like car saleswoman, your prospective school may be playing dirty tricks with you. For example, full tuition waiver may not include "other fees". So you may still end up paying 1-2K for tuition per semester. Also, there may be a "as long as the student is in a good academic standing". This may mean that you will get the support for up to four years. Since most PhD students do not graduate withing 4 years, you may be facing a very real possibility of paying full, "out of state" tuition for the last year or two of you studies.... In the worst case scenario, this may be around 6K per "long" semester. Usually, there are ways to get around this. But it will cost you a lot of time and nerves to extend your financial support beyond what is considered by the school a "normal" length of a program.

Even if you don't take into account this dirty financial tricks, $20,000 (or even $30,000) per year may not be enough to live a decent life. You will need money for vocation (if you are planning to live 5 years without a vacation you are a prospective candidate for a mental house). You need money for textbooks. You need money to go to conferences (some departments provide some sort of support for graduate student travel, but this may not be enough). To get a feel of how it is like to live on 20K, you have to talk to folks working at McDonald's. But keep in mind that they are likely to be making more money on per hour basis than you. I have two friends who got out of graduate schools with debt pushing the $100,000 mark. As for me, after living a quite frugal lifestyle, I spent around $50,000 of my own money after 5 years in a PhD program.


Also, don't forget to factor in the opportunity cost. Let's assume that before you get into a PhD program you have a job paying around $50,000 a year... Let's say you manage to save $10,000 a year for the next five years. If you put invest this money at 5% a year, you will end up with roughly $140,000 in 20 years. This is the difference you may never be able to make up even if you end up having a decent academic job after you graduate (see this post). I've know a person, a former mid-level executive, who decided to become a professor after many years in the industry. After more than 6 years in a PhD program, he estimated his opportunity cost at around $1,000,000.

From an economic perspective, a "free" graduate program may be a good deal only to a guy from a poor Indian, Chinese, or Russian village. This, in part, may explain why there are so many foreign students in graduate programs.

37 comments:

  1. This is assuming that you're going through all of the physical and emotional stress for financial gain. What if you're in it because you really enjoy learning what you're learning and value it above a large retirement nest egg? Education is very dangerous if you go at it to make you more money.

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    1. I'd say just the opposite. Education can be very dangerous if you go at it on impulse and don't plan to make some money.

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    2. You're thoughts are interesting.. Both of yours but I must disagree. Education is not about money.. Its about knowledge and how you implement and use it to do well in life. For some that means making money, for some it means doing good in the world.. Whether it be for people or anything else.

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    3. There is no wrong or right. I went into a Masters in Business/Law for the love of learning - when I am in nursing in healthcare, not the preferred Masters. I never anticipated a job out of it, in fact, I made up stories about the use of the Masters because barely anyone understood my motivation to spend $18,000 on study without an aim except enjoyment of knowledge. Whilst applying for a completely unrelated role in the nursing industry, I was offerred additionally, over the interview table an industry flagship role - Ive never looked back. It seems the dangerous educational game being spoken of, wasnt dangerous after all

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  2. You see, I don't really have any desire to buy an expensive car or wear designer clothing.For me, money is only a measure of value. If you start telling people that doctors should work for free since helping other humans is a noble thing to do, they will probably laugh at you. Why should education be exempt from basic economic laws? If helping people attain better lives is valuable, this job must be compensated well.

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  3. I agree with the last two comments posted above. I find your reason for obtaining a PhD somewhat unclear; in the past 5 posts I've read you seem to just rant about costs and all the downsides. Currently, I'm working on my undergraduate degree and I make around $11,000 a year, my wife makes about the same and we're pretty happy. We both are students and have a passion for knowledge, both of which are free. We make it just fine without fancy cars, clothes and other junk. I kind of pity people who spend too much time going over the numbers rather than pursuing life to the fullest...

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  4. I agree with Anonymous said above. Knowledge is a wonderful and powerful thing to have. I am in my fifties and am thinking on pursuing my doctorate in a specialized area. I am toying with the idea of debt howver and that bothers me but what I think would bother me more is to pass up an opportunity to really make a difference in anothers life through giving and research. I can save and go without nice cars etc, but to pursue your calling in life would be unfortuante if we did not do what we are meant to do in life.

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  5. I am currently a single mom, working full time and making roughly $25,000 a year. I live modestly, but not lacking for food, clothes, shelter, or a good nieghborhood. I have a thirst for knowledge, and I am 5 classes away from my bachelors in Pshychology. I have over 10 years in the field. I have already looked into my Masters degree that will start in the late summer. If I did go for a doctorate degree I would be 41, when I complete it. I tell my daughter constantly, about the benefits of education;epecially for women and minorities. I have contemplated a doctrates degree because I believe in the end, their is no dollar sign on reaching the hightest level of academic edcuation. I would rather be indebt to my education;than to materialist things ( ipods, huge televisions, fancy cars). Not everyone has the drive or the ability to face such a challenge.

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    1. Shep Man,

      I am in my late 50,s and am looking at A PHD partly for my own learning and to add credibility to the book I hope forms the basis of my studies.

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  6. If you don't think money is important then perhaps you should have a chat with the scores of senior citizens who failed to plan for retirement and are living primarily off of social security! That said, I think the author of this post identifies some important financial issues for a potential student to consider. If you don't take the time to educate yourself on the both the risks and benefits of an endeavor as rigorous as a doctorate, then you may not be the caliber of person who should be pursuing such a degree. Just my two cents.

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    1. The "calibre"...truly? since when wasnt education a life defining question?

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  7. Doing what you love for a living is great, but unless you are financially secure and can afford to meet your responsibilities at a reduced income, you need to carefully analyze the ROI and opportunity costs as the author of this article did. My employer has a tuition reimbursement benefit and I just finished my MBA for less than $3k out of pocket total. Perhaps that would be another PHD strategy mentioned...find and work for an employer that will pay for some/all of your post graduate education, which would help address opportunity costs and ROI. It took me 4 years to do my MBA part time, but I did it for free. I know others that took jobs at Universities doing secretary, janitorial work just so they could get free tuition for themselves and their family.

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  8. The real issue here is the price of education.

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  9. Which is why I moved from the states to Portugal, to pursue a PhD for a reasonable price.

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  10. if any one interested in making big money in scam then contact me I will take the risk but need some one with good English.. I have few great ideas and I am in the UK can travel any where Original from India..Contact mikemacronatgmaildotcom. or chaganmagan420atyahoodotcodotuk..

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  11. To all the people who say they "don't need a retirement nest egg" and they value education over money: Talk to me when you have kids. We'll see if you're still so naive. That's all.

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  12. Well, education is life...I love learning and open to the new and knowledge. However, what is defined here is an old title on the field for the few who want to hold to some old fashioned title for what, ego or pay? I had been listening to my mother repeat over and over that her grand daughter was now pursuing her PhD. Wonderful, I said, and she is of the very few women to pursue such an idea on furlough (attorney) out of a paying law office, just divorced with two small children? Mother, who is carrying this cost for PhD study, if she is not working and her parents are watching these two small pre-school children of hers with the ex-husband out of the country? I furthered, something is a miss here, as she has no common sense to LIFE and is almost 44 years old with now going for a PhD in nursing? G-d who wants to explain this to a merit scholar that is spoiled by notions of more, more, more knowledge at the expenses of others? When I told my mother the cost of ones pursuit at 50-80 grand, she just could not believe this...why - how could one believe this of an attorney, 2 pre-school children being watched by her parents, because she is sooooo bright! WHO cares! The bigger question is what is come to benefit the society or greater good? GO OUT and GET A JOB! Good luck all of you PhDs and I really do hope you have an agenda beyond the small pictures of yourselves! I would love to secure the PhD for myself...phoney-hype of a doctorate...at 100,000 bucks you suckers!!!

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  13. For me In Nigeria, a PhD is really great to secure well paying permanent federal appointment. So, its worth the effort for me.

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    1. I guess every country is different. It's nice that PhD is highly valued in Nigeria.

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  14. Every single technology that you utilize to live with was made by somebody to studied a particular field formally or informally reality is it is people who dedicate their lives to education who change it for the better

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  15. What a WEIRD blog! The writer seems a bit ignorant on life's subjects, not to mention grad programs. Have you read the other articles by this guy? I wouldn't be surprised if he didn't finish junior college. Plus the assumptions made about "foreign students" is pretty strange... Do you smell the resentment here?

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  16. #happy, happy, lily day...#

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    1. Haha, great timing of reference.

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  17. SOMEONE didn't earn their Ph.D. lol. Anyway, don't let anyone tell you what to do. Follow your instincts. For some going to Grad School is a necessity in order to climb the Social Ladder and get out of poverty, for others, Mommy and Daddy will pay for school, so you really never suffered enough to appreciate what a simple degree means for others. Stop judging others and do what you wish to do with your life. Be safe everyone...and God Bless.

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    1. Absolutely! good sign off! do what you wish to do with your life - Totally agree!

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  18. There's a difference between living on a small salary, which in actuality depends on where you are, (Say, in Northern California versus West Texas that 20 grand per year means a totally different experience) and carrying a huge debt. Carrying a big debt can bring huge problems and limit your freedom, cause anxiety, and make it hard to get credit cards, which in this day and age are necessary, and if you ever have a rough couple of months, can ruin your credit. It's hard for me to imagine how these people are so dismissive of such large debt loads.

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  19. This man is quite chill. However, a PhD is already a poor financial decision. One could make a lot more money for the cost of their MBA than pursuing a PhD in business. PhD's are best used for teaching, so don't expect a monetary award. Do it because you want to learn.

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  20. I find this informative, even though I'm going in to high school. I love learning and knowing this may help me in the future since I plan on a path that will lead me to the future of science so I can learn more then we already know. ( I'm sorry if my spelling is off I have trouble with spelling.)

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  21. Just finished mine and it was 189,000

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  22. I have been reading a lot of books about K-12 and higher education recently. Most have been written by educators. America is facing a crisis for the nest at least 2 generations. Our k-12 schools have focused too much on memorizing and not much on critical thinking skills, reasoning skills, and problem solving skills, etc.
    You all seem to have a love for learning, and I applaud that.
    However, if you wish to help others and additionally wish to satisfy your desire to learn, then figure out how to teach young minds the skills I previously mentioned!!
    The middle class jobs we have lost in the last 25 years will not be coming b, unless we either lower our standard of living by 30% to 40%. or teach the young thinking skills!! We as a nation cannot support all we have on welfare already ( at least 43 million ) added to the 96 million working age not in the work force. And the future will be even worse!! You want to do something exciting, teach these young minds and watch as they become creative innovators and change the world!!!
    JUST MY TWO CENTS

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  23. I have listened to all of you and all of you have good points. I recently retired and am in my 3rd yr of a 5 yr. PsyD program where I will be helping people with their emotional health issues as well as helping others achieve or attain a better life for self through a viable trade (plumber, nurse, carpenter, etc.), or what I did not hear in this forum....entrepreuneurship! Yes, creating a successful business or businesses whereby you create jobs/work for others while providing a service to society. Good luck everyone! We are all 100% accountable for the life we choose to have. So, live your life to the fullest!

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  24. WOW-- SO HELPFUL!! This sole piece of information helped me make my decision!! (In my particular case, with my specific set of circumstances-- No Go) Thanks for saving me lots of grief & money.

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  25. I'm getting a Ph.D. and I have a fellowship. I'm fully covered financially and I'm able to pay my 1,250/month rent with no problem. Most departments provide an opportunity to apply for funding for conferences and I also have received several grants for other miscellaneous problems. I'm not sure of your situation, but it sounds like you might have picked the wrong program

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    1. To: Unknown December 16 2016 at 10:21 AM
      Would you please give us the right program or the right information.

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  27. A very useful and informative information provided by you.

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