October 1, 2008

Higher Education Options / Read on Before Pouring Your Hard-Earned Cash into More Schooling

The grim outlook for the labor market has been leading more workers to reassess their career options. And it's tempting many to contemplate a return to school to buff up skills or gain new ones. More education can add significantly to earnings, according to a report from the Census Bureau. In 2006, among workers 18 and older, those with less than a high school diploma earned an average of $20,873, compared with $31,071 for those with a high school diploma, $56,788 for a bachelor's degree, and $82,320 for a master's, professional or doctorate degree.

While such financial incentives may be alluring, experts say there are a number of important considerations that must be taken into account before pouring hard-earned cash into more schooling:

Determine your strengths and weaknesses

Figuring out whether you need to go back to school should involve a self-assessment to determine what skills you have and how you can build on them to nab a job, experts say.

It's also important to determine whether acquiring new skills will require taking just a course or two, or earning an entire degree. And workers should make sure to factor in family and social responsibilities, said Deborah Russell, director of work-force issues at AARP.

Those with tight schedules may want to consider taking online courses, or immersion courses that are more time-intensive but last for a shorter period than a traditional course.

"Going back to school may look very different to different people," she said. "There may be caregiving obligations that may preclude you from taking courses during the day or evening."

Also keep in mind that a decision should be future-oriented, taking into account what employers will be looking for in coming years in addition to skills that are currently in demand, said Ronald Ferguson, an economist and lecturer in public policy at Harvard University's Malcolm Wiener Center for Social Policy.

Find local demand

Try to find out which types of employees and skills are needed in your community, experts say.

Russell said you can start by asking career counselors at community colleges, as well as checking out state and local career centers.

Once you know which skills are needed, you can tailor your education. More schools are cooperating with local employers to offer courses that suit workplace training needs, she said.

Weigh the costs and benefits

Make sure your financial gain from increased training is worth the expense, Ferguson said.

"Do some homework," he said, "to be sure that the skills [you] would be acquiring are both in demand and sufficiently compensated to make the time and effort and expense worth it."

Start by figuring out how much you are likely to spend. For the 2007-08 academic year, in-state tuition and fees averaged about $6,200 at public four-year institutions, and about $23,700 at private four-year nonprofit institutions, according to the College Board.

Unless a degree is necessary, workers may be better off financially if they take just a course or two or pursue a certificate program. And make sure to take advantage of low-cost or free offerings from community colleges, local groups and employers, such as programs teaching basic computer skills. An extension class might cost a couple hundred dollars or less.

Prospective students also should keep in mind that student loans may be more difficult to come by these days, said Mark Kantrowitz, publisher of FinAid.org, a Web site offering financial-aid information.

"Lenders have tightened criteria," he said. "If you have a bad or marginal credit score, you are going to have a harder time obtaining a student loan."


Originally published by MARKETWATCH.

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