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Thinking About Going Back to College? Make
a Plan First
You're in your 40s, 50s or beyond and you've either always
dreamed of going back to school or realized you need a degree or
extra preparation to get to the next level of your career. The
mid-career college plan should be very different than the one
you and your parents had in place when you were 18 — and that's
probably a good thing.
A July/August 2006 story in AARP Magazine by noted
workplace and career expert Rosabeth Moss Kanter pointed out
that retirement-phobic mid- or late-career types may retreat to
college campuses instead of the golf course to prepare for the
next phase of their life. Why? They want to train for completely
new careers in all-new professional fields or public service.
According to the piece, "Traditional volunteering is not
what leading-edge boomers have in mind. They want to be leaders
and to help improve the world." Education will be a part of
that movement.
The back-to-school movement for older Americans is an
interesting one, but it goes beyond purely financial
considerations. It makes sense to discuss your ideas with a tax
professional and a financial planner before you make a move:
Do you really need the degree? Depending on the
field, many employers will look at an experienced worker and
take their particular work and life accomplishments into
consideration when hiring. An MBA or other advanced degree may
be personally fulfilling, but you have to consider whether your
future plans really require it and whether the degree will pay
for itself in the end in salary, opportunity or both.
Are you planning to attend school while working or will
you take time off? Going for an aggressive degree program
while working full-time can be financially, mentally and
physically draining. Obviously, if you plan to take a sabbatical
and go to school full-time, that's a more complex set of
financial issues you need to consider well in advance, and you
should get help planning for it. Beyond finance, you need to be
prepared for the demands of school on your time with family,
friends and your personal relaxation. Time is an opportunity
cost you can't get back.
Check your qualifications for federal and state tax
credits. Both the federal Hope Credit and the Lifetime
Learning Credit are among options you may consider to help
cushion the tuition blow if you qualify — discuss these credits
and other ways to afford college with your tax expert as well as
your planner.
How prepared are you to take on debt? It would be
wonderful to pay cash for a college degree, and with time and
planning you might be able to do it. But if you need to take out
debt to pay for your coursework, make sure your credit cards and
other debt are paid off first. You'll put yourself in the best
position to afford any student debt you take on.
Will your company pay? Take advantage of every
educational break you can take before you leave your company. If
they require you to stay a certain amount of time after
attaining your degree, work that into your plan.
How's your retirement and health plan? It might seem
like a good idea to raid the retirement plan or milk the home
equity to go back to school, but you need to research whether
that makes sense for you. Despite your current energy and
determination, no one has a guarantee of perfect health through
the last half or third of their lives. Also, you need to plan to
keep funding retirement if you're still working and managing
your retirement plan if you're heading back to school.
Consider a functional degree. All sorts of colleges —
even the nation's most prestigious schools — are considering
abbreviated graduate and post-graduate programs that give
students exactly the amount of education to upgrade their skills
and head back into the workforce. If a one-year program will do,
why pay for two or three?
Are your school choices friendly to older students?
It's your money. Make sure you're attending an institution that
considers its older students a valuable addition to its campus
and makes you welcome.
August 2007 — This column is produced by the Financial
Planning Association, the membership organization for the
financial planning community, and is provided by Don McCarty of
Financial Decision Partners, a local member of the FPA.
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