One of the formative moments of my life was when I graduated from college back in 2009. This was right in the heart of the financial crisis, so in terms of timing, I probably couldn’t have graduated at a worse time. Like many of my cohorts in that graduating year, I ended up moving back home because I couldn’t get a real job.Â
My lowest happened a few months after I moved back home. I was on the job hunt and applied for an administrative assistant position at a small CPA firm. The job paid $15 per hour, which wasn’t much, but at least it was a full-time job with benefits. During my final interview, the hiring person let me know that over 100 people had applied for the job and they were deciding between me and someone else. It seemed like I had a good shot at getting this job. But, a few days later, they let me know that they’d decided to go with the other person.
Here I was, a triple major from one of the top schools in the country. And yet, I couldn’t even get a job as a secretary.
This situation was what ultimately led to my decision to take the LSATs and head off to law school. Law wasn’t necessarily a dream of mine or even anything that I knew much about. I just knew that it was something I could probably do and it was (or so I thought) a way to get a good, real job and the middle-class lifestyle that comes with it.
The way the world looks right now means that a lot of recent graduates are entering an economy similar to the one I entered into a decade ago. You’re seeing people move back home with their parents. They might be working at the same jobs they had when they were in college and high school. The worst feeling is that feeling of shame and the lack of direction when you’re in this position – it’s a feeling like you’ve failed to launch.
Without much going on, it’s tempting to make your way to grad school with the idea that you’ll ride out the market downturn until things improve. In a few years, you’ll have a shiny new master’s or professional degree and hopefully some better job prospects to go along with it.
If this is you, I really think that this is something you need to think about carefully. I’m an advocate for more schooling – school was one of the best experiences of my life. But using grad school as a way to get past a recession can put you in a big hole – one that can hurt you for far longer than any market downturn.
Think Carefully – Grad School Might Not Be The Answer Â
When you look back over the past decade, you can see that grad school applications saw a marked increase during and immediately after the financial crisis. The year I applied to law school was the peak for law school applications.
It makes logical sense to ride out a recession by spending a few years in school. The problem is that so many people end up in grad school for the same reason – they can’t get a job, they feel ashamed and directionless, and then, with no idea what to do, they decide to go to whatever graduate program they can get into without really thinking about why they’re doing it or what it’ll mean for their financial future. A few years later, the downturn might be over and they find themselves doing something they maybe didn’t really want to do. And now they have the anchor of 5 or 6 figures of student loans weighing them down.
It’s this going to graduate school or professional school without a real reason to do it that I warn people against. This is exactly what I did – I went off to law school because I couldn’t get a real job and I had no idea what I should do next. I was ashamed and wanted to have something that I could identify myself as – in this case, a law student.Â
In terms of graduate programs, law school is uniquely suited to the person that has no idea what they want to do. There are no prerequisites to go to law school other than having somewhat decent grades and the ability to take a standardized test. Medical programs are a bit different – you need to have certain undergrad classes in order to go, which makes the people going to those schools, I think, a little bit more focused.
You can’t stumble your way into med school or dental school. You absolutely can stumble your way into law school, business school, and many other graduate programs that don’t have stringent prerequisite requirements. And stumbling into anything, I think, is a mistake.
Questions To Ask Yourself Before Going To Grad SchoolÂ
Here are three questions I would ask yourself before you take the plunge into grad school or professional school. You have to really dig deep here and answer these questions truthfully. It’s easy to delude yourself if you aren’t being as introspective as you can be.
1. Do you really want to go to grad school or are you just doing it because you don’t know what else to do? I can’t back this up with any stats, but I’m convinced that half or more of the people that went to law school during the financial crisis did it because they didn’t know what else to do. My guess is that this could be true for many other grad programs as well.
On the one hand, it sort of makes sense. The opportunity cost of going to a grad or professional program isn’t very high when you’re underemployed and making minimum wage. Taking two or three years and seeing what things look like on the other side has a logical rationale to it.
The problem is that jumping into something without thinking too much about why you’re doing it can lead to dissatisfaction later down the line. That’s what happened to me. I jumped into a path because I didn’t know what else to do, then found myself a decade later unhappy with where I was, but with an identity extremely tied to the thing that I didn’t really care about.
Life is long. Too often, we act like it’s short. There will be twists and turns along the way. You can take your time. Sometimes, it’s okay to figure out where you want to go before taking that first step.
2. What sort of student loan debt are you going to end up with? If grad school was free or didn’t cost much, then I’d say go to grad school, even if you have no idea what you want to do. There’s nothing better than being in the sweet embrace of school while the world is falling apart around you.Â
Unfortunately, that’s not the world that we live in. Graduate and professional schools are expensive. Three years in law school can easily result in $200,000 worth of student loans. I had a 50% scholarship for law school and still managed to stumble my way into $87,000 worth of student loans. It ended up costing me $102,000 after paying interest – and that was only because I paid it off extremely fast.Â
When you’re in school, student loans can feel like play money. But you need to be careful because they can potentially be life-altering. Being underemployed and just trying to get through the recession, on the other hand, isn’t going to destroy you. You can cobble together something and regroup in the future. But it gets much harder to regroup if you stumble your way into grad school and end up with six figures of student loans.
My general rule of thumb is this – unless you’re going into medical school or dental school, don’t take out more in student loans than you think you’ll make in your first job out of school. And you have to be realistic and discerning with your expected earnings. Most graduate programs are notorious for overestimating what you’ll make.
3. Seriously, do you really want to go to grad school? I know, I already asked you this question, but I think it’s so important that it bears repeating. You need to ask yourself again and answer truthfully – do you really want to go to grad school?
I typically divide the world of post-college education into two types – (1) those that have prerequisites and (2) those that do not have prerequisites.Â
The graduate programs that have prerequisites tend to be in the medical field – think med school, dental school, pharmacy school, etc. I’m more inclined to believe that those people actually want to go to med school, dental school, etc., simply because they had to do more while they were in college (i.e. taking organic chemistry and other required science classes). You can’t really be a political science major and then just find your way into med school. If you’re aiming to go to one of these graduate programs and tell me that’s your dream, I’m not going to second-guess you – you probably really want to go.
The other types of graduate programs are those that have no prerequisites. These are programs like law school, business school, etc., where you only need to take a standardized test in order to apply. I went to law school because I was an economics and history major and didn’t have the prerequisites to apply to medical school. A lot of other lawyers – while they might not admit it – probably ended up in law school for the same reason.
If you’re graduating into the recession and now are thinking about applying to law school or business school, really think about why you’re doing it. You’ll have to dig deep here to understand what you’re doing because you might trick yourself if you aren’t being as introspective as you can be.Â
Think Carefully About Grad School
I don’t know if I have a good, single answer as to what you should do if you’re entering what might be the worst job market in a century. Graduating at this time, unfortunately, is going to have a big impact on the rest of your life. Your wages will start off lower. You’ll probably have more student loans. You might never catch up.Â
There are positives too though. You’ll come out scrappier and more resilient than your peers that graduated in better times. You’ll more easily avoid lifestyle inflation. And remember, big things tend to happen after bad things happen – that’s a fact of history.
(Related: The Benefits of Graduating During The Financial Crisis)Â
I’m a big proponent of school and I think it’s valuable – if I had infinite money, I’d seriously be a student forever. But you need to be careful about the decision you make here because it’s not a small matter. Riding out a recession in school is likely not going to solve all of your problems. If you’re on the fence, my advice would be to sit it out and wait.
More Recommended Ebike/Scooters
Check out these other ebikes and scooters I've reviewed:
- Urban Arrow Ebike – Last year, I made one of the largest purchases I’ve ever made – I bought a $9,000 electric cargo bike from Urban Arrow. In my Urban Arrow review, I will discuss what it is and why I decided to buy this bike, as well as discuss how impactful a bike like this can be on your journey to financial independence.
- Troxus Explorer Step-Thru Ebike – The Troxus Explorer Step-Thru is a fat-tire ebike that I’ve had the pleasure of riding for a while now. It has amazing power, great looks, and awesome range. If you’re looking for a great fat-tire ebike that offers a lot for the price, the Troxus Explorer Step-Thru is definitely one for you to consider. Check out my Troxus Explorer Step-Thru Review.
- Hovsco HovBeta Ebike – The HovBeta is a folding ebike with great specs and a lot of interesting features, and importantly, it’s sold at a good price point. I’ve had a blast commuting with it and using it to do deliveries with DoorDash, Uber Eats, and Grubhub. Check out my Hovsco HovBeta Ebike Review.
- Vanpowers Manidae Ebike – The Vanpowers Manidae is a fat tire ebike that I’ve been riding as my primary winter commuting bike and have also been using it to do food delivery with apps like DoorDash, Uber Eats, and Grubhub. After clocking in a decent number of miles with this ebike, I wanted to write a post sharing what my experience with the Vanpowers Manidae ebike has been like. Check out my Vanpowers Manidae Review.
- Sohamo S3 Step-Thru Folding EBike Review – A Great Value Folding Ebike – The Sohamo S3 Step-Thru Folding Ebike is an entry-level folding ebike that offers a lot of value for the price point. I’ve been riding the Sohamo S3 for a while now, putting the bike through its paces, and I have to say, this bike has exceeded all of my expectations. Check out my Sohamo Review.
- KBO Flip Ebike – The KBO Flip is an excellent bike. I’ve had a great time riding it and think it’s a versatile bike that can be used for a lot of purposes and can fit a variety of lifestyles. It’s worked out great for me as a general commuter bike and as a food delivery bike. Check out my KBO Flip Review.
- Hiboy P7 Commuter Ebike – The Hiboy P7 is an excellent electric commuter bike that’s offered at an affordable price point. The range and speed of this bike are both very good, so you won’t have any trouble getting anywhere you need to go with it. As a food delivery vehicle, this is also good – with how much range it offers, you’ll be able to work all day on a single charge. Check out my Hiboy P7 Commuter Electric Bike Review.
- Himiway Escape Ebike – The Himiway Escape is an interesting bike for anyone looking for a moped-style ebike. If you’re a gig economy worker, the Himiway Escape is particularly interesting and it’s possible to think of it as an investment, especially if you can opt to do deliveries with the Himiway versus using a car. It’s not cheap, but you can definitely make your money back when you compare the mileage you’ll put on your car versus using an ebike. Check out my Himiway Escape Bike Review.
- Espin Sport Ebike – The Espin Sport is a good ebike for someone who is looking for an ebike that feels and rides more like a regular bike. There are many ebikes that are really only bikes in name. In reality, they’re basically electric mopeds. The Espin Sport, by contrast, is a bike you could probably ride without the battery and you’d feel like you’re just riding a regular bike. Check out my Espin Sport Review.
- Varla Eagle One Scooter – The Varla Eagle One is an excellent scooter that can make sense for a lot of people. It can work as a primary mode of transportation. You can use it to work on gig economy apps like DoorDash, Uber Eats, and Grubhub. And it can also be a recreational vehicle if you’d prefer to use it for that. Check out my Varla Eagle One Review.
- Varla Falcon Scooter – The Varla Falcon is an excellent scooter that offers a good amount of power at a lower price point compared to more powerful scooters. It’s not exactly an entry-level scooter, nor is it a high-powered scooter. I think it fits somewhere in-between those two categories – an intermediate scooter if I had to give it a category. Check out my Varla Falcon Review.
- Hiboy S2 Scooter – The Hiboy S2 is an excellent entry-level commuter scooter that's perfect for someone looking to save some money in transportation costs and improve their commute. Check out my Hiboy S2 Review.
- Hiboy S2R Scooter – The Hiboy S2R is one of the more interesting electric scooters I’ve been able to test out. It’s not a high-powered scooter, but for an everyday transport option, it’s very useful, especially given some of the unique features that it has. Indeed, for the price, the Hiboy S2R might be the best value scooter I’ve used. Check out my Hiboy S2R Review.
- Fucare H3 Scooter – The Fucare H3 is a fun scooter and I’ve enjoyed testing it out. For a daily commuter or quick trips or errands, the Fucare H3 is probably the scooter I’ll use. It’s portable and easy to maneuver, so it’s just easier to take on the road when I need it. Check out my Fucare H3 Scooter Review.
More Recommended Investing App Bonuses
For additional investing app bonuses, be sure to check out the ones below:
- M1 Finance ($100) – This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $100 for opening an account. Check out my M1 Finance Referral Bonus – Step-By-Step Guide.
- Webull (20 free stock shares) – Webull's current promotion gives you 20 free shares valued between $3-$3,000 each if you open an account using my referral link. Here’s a guide I wrote about how to earn your free shares using Webull.
- Moomoo (15 free stocks) – Moomoo is a free investing app currently offering 2 different referral bonuses if you open an account using a referral link. Read my Moomoo referral bonus guide for more information.
- Robinhood (1 free stock) – Robinhood gives you a free stock valued between $2.50-$225 if you open an account using my referral link.
- Public (1 free stock) - Public gives you a free stock valued between $3-$70 if you open an account using my referral link.
- SoFi Invest ($50) – SoFi Invest is an easy brokerage account bonus that you can earn with just a few minutes of work. Use my SoFi Invest referral link, fund your SoFi Invest brokerage account with just $10 and you’ll get $50 of free stock. I also have a step-by-step guide for the SoFi Invest referral bonus.
More Recommended Bank Account Bonuses
If you’re looking for more easy bank bonuses, check out the below options. These bonuses are all easy to earn and have no fees or minimum balance requirements to worry about.
- Upgrade ($150) – Upgrade is a free checking account that’s currently offering a $150 referral bonus if you open an account and complete a direct deposit. These bonus terms are easy to meet, so it’s well worth doing this bonus as soon as you can. Here’s a post I wrote with more details: Upgrade $150 Referral Bonus – Step By Step Directions.
- SoFi Money ($275) – SoFi Money is a free checking account from SoFi. They’re currently offering a $25 referral bonus if you open a SoFi account with a referral link and deposit $10. You can also make an additional $250 as well if you complete a direct deposit. This is a good bank that is also 100% free, so you won’t have to worry about managing this account. Here’s a post I wrote with instructions on how to earn your SoFi Money bonus: SoFi Money Referral Bonus: Step By Step Guide.
- Chime ($100) - Chime is a free bank account that offers a referral bonus if you use a referral link and complete a direct deposit of $200 or more. In practice, any ACH transfer into this account triggers the bonus. This bonus is easy to earn and posts instantly, so you’ll know if you met the requirements as soon as you move money into the account. I wrote a step-by-step guide on how to earn your Chime referral bonus that I recommend you check out.
- US Bank Business ($800) – This is a fairly easy bank bonus to earn, since there are no direct deposit requirements. In addition, you can open the Silver Business Checking account, which comes with no monthly fees. Check out how to earn this big bonus here.
- Fifth Third Bank ($350) – This offer is limited to customers in the following states: Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, North Carolina, Ohio, Tennessee, West Virginia, and South Carolina. If you don’t live in one of those states, you won’t be able to open an account online but you can still open an account in-branch if you happen to be visiting a city that has a branch. This is a fairly easy bank bonus to earn, especially since there are plenty of data points showing what will trigger the direct deposit requirement. In addition, you can open the Fifth Third Momentum Checking bank account, which comes with no monthly fees or minimum balance requirements. Read my guide on this bonus here.
- GO2Bank ($75) - GO2Bank is an easy bank bonus that I recommend people take advantage of if they have an easy way of meeting the direct deposit requirement. I like that it’s easy to open the account and that the bonus pays out quickly. Check out my step-by-step guide on how to earn your GO2Bank $75 referral bonus.
- Current ($50) – Current is a free fintech bank that’s offering new users a $50 referral bonus after signing up for an account using a referral link. Current is an easy bonus to earn and also gives you access to three savings accounts that pay you 4% interest on up to $2,000. That means you can put away up to $6,000 earning 4% interest. That’s very good and makes Current an account I recommend to everyone. Check out my step-by-step guide on how to earn your Current Bank bonus.
- Netspend ($40 + 5% Interest Savings Account) – Netspend is a company that provides 5% interest savings accounts. If you sign up using my referral link, you’ll get a $40 signup bonus once you make your first deposit into your Netspend account of $40 or more. That means you get a 5% interest savings account and a free $40 to start! Make sure to check out my in-depth guide on how to set up these accounts.
- Digital Federal Credit Union ($20) – Digital Federal Credit Union (DCU) is a free, nationwide credit union that I recommend to readers for two reasons. First, DCU has a $20 referral bonus if you open a free DCU checking account with a referral link. Second, DCU has a saving account that gives you 6.17% interest on your first $1,000. Check out my in-depth post on how to set this account up.
- Novo Bank ($40) - Novo bank is a free business checking account that’s currently offering a $40 bonus if you open a Novo business checking account using a referral link. In addition to being a good bank bonus, Novo is also a good business checking account. It has no monthly fees or minimum balance requirements and operates a good app and website. Indeed, it’s the business checking account I currently use for this blog. Check out my post on how to easily open a Novo account.
- Varo ($30) – Varo is a free fintech banking app similar to Chime or Current. It’s currently offering a $30 bonus to new users that open a new Varo account with a referral link. The bonus for this bank is very easy to meet, all you need to do is spend $20 within 30 days of opening your Varo account. Check out my step-by-step guide to learn how to earn this bonus.
Kevin is an attorney and the blogger behind Financial Panther, a blog about personal finance, travel hacking, and side hustling using the gig economy. He paid off $87,000 worth of student loans in just 2.5 years by choosing not to live like a big shot lawyer.
Kevin is passionate about earning money using the gig economy and you can see all the ways he makes extra income every month in his side hustle reports.
Kevin is also big on using the latest fintech apps to improve his finances. Some of Kevin's favorite fintech apps include:
- SoFi Money. A really good checking account with absolutely no fees. You'll get a $25 referral bonus if you open a SoFi Money account with a referral link, and an additional $250 if you complete a direct deposit.
- 5% Savings Accounts. I'm currently getting 5.25% interest on my savings through a company called Raisin. Opening a Raisin account takes minutes to complete, it's free, and all of your funds are FDIC-insured. I explain how it works, why I'm now using it to store my emergency fund and any other cash savings I have, and why I recommend everyone check it out in this review.
- US Bank Business. US Bank is currently offering new business customers a $800 signup bonus after opening a new account and meeting certain requirements.
- M1 Finance. This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $100 for opening an account.
- Personal Capital. One of best free apps you can use to monitor your portfolio and track your net worth. This is one of the apps I use to track my financial accounts.
Feel free to send Kevin a message here.
Great post. I went to grad school (MBA) in 2010 for very different reasons but I did have a lot of classmates who were there to sit out the proverbial sh$tstorm.
Very much agree with your recommendations:
1. Go to grad school because it’s the right thing for your career
2. Only go to the kind of grad school that will leave you well placed to find that next role / make a career switch. Usually, that means going to a top 5 / top 10 school in its field. Others simply won’t get you there.
3. Run the maths. Spending $200k on a graduate degree to land a $50k job just doesn’t work.
Running the math is really important. I know too many people just do it without thinking about that. You really have to think about why it makes sense. And the introspection is key. Why are you going? A lot of people don’t have a real answer for that.
I went to grad school because my then employer paid me to go while I got promoted to a job that they felt required a Master’s. I was laid off three months later. I decided to finish school as my choices were slim in finding a new job. It was a good decision that I don’t regret as it opened many doors for me. However, my student loans were less than 25k as I only borrowed what I needed. I say if the graduate degree is in a STEM or specialized field, I say go for it. Anything else, I agree think about it considerably before going back.
Right, STEM is something that has prerequisites, so there is barrier to entry to go. You can get a STEM degree without having had some sort of drive to do it before (can’t get a masters in engineering if I wasn’t already an engineering major, can’t go into science or health if I wasn’t already taking those classes, can’t get into computer science if I wasn’t already doing it).
It’s the ones that have no prereqs that worry me. People do those as an escape.
I was not an engineering major during undergrad but still was able to get an engineering Master’s and PhD….all for free! My advice for anyone going to college is always take as much science and math as you can to leave as many options open as possible.
I assume you had some engineering background in undergrad though? Like I couldn’t just apply for grad school in engineering could I?
Perfect timing on this blog post. Ellen and I were just debating this issue. Many young consultants at her firm (economics consulting) work for a couple of years and then head off to Kellogg, Wharton, Sloan, etc. Does that make sense in the current Coronavirus environment? Is it better to hang on to the job you have, or go to grad school in the hopes of scoring something bigger in a few years. Her firm is doing fine and not contemplating any layoffs—in fact, they’re hiring. Great insights, as usual.
I just go back to those three questions. Do you really want to go? What’s the student loan debt gonna look like? And seriously, do you really want to go?
In the law game, you saw that happen a lot during the financial crisis – people would head off to law school, then graduate and end up making the same as what they made before, only now with 6 figures of student loans. I really think it just comes down to how serious people are about grad school vs. is it just an escape.
I remember that time well – similar experience. I was in NY and couldn’t get a job. I got 3 interviews in 6 months. I eventually took an unpaid internship just because I wanted to move out of NY. 6 months later, I found a job just when I had only a few dollars left. Though times then, and though time now.
Ah yes, the era of the unpaid internship. A lot of companies will start doing that again I bet.
Hey Kevin,
I graduated from university in 2009 as well. It was definitely a time of uncertainty. I remember applying for a ten-hour per week Casual job and not getting it. They said I lacked customer service experience (which was true). So, I moved around a bit thereafter across a few industries.
Working now in computer programming for an electronic health record at a hospital. Funny how life goes—I wouldn’t have been able to plan this one out, for sure.
That said, I agree that far too many people go to school just to “get a degree” with no thought to what comes next, or to the financial and life cost us amassing huge amounts of debt. It can be very difficult to get back out from under, once the debt tentacles having taken hold.
Take care,
Ryan
Those were really low points when we literally couldn’t get pretty low-level jobs because there were so many people out of work looking for jobs. Thanks for sharing!
I am an adjunct at an Ivy League grad school and I see so many students who come not knowing what they will do with the degree. So I agree that too many people stumble into grad school out of not knowing what else to do. It’s an expensive way to explore. Furthermore, there’s the opportunity cost of not working and getting the hands-on experience employers prefer.
That’s exactly what I did – I stumbled into law school. It worked out for me in that I was able to get the student loans out and move on. But I know a lot of people aren’t going to be in that position. In a few years, we’re probably going to see another crop of students that jumped into grad school because of the recession and now have a ton of student loans and not much better outcomes than if they had just struggle through the recession doing whatever they could.