Working out how you’re going to pay for further study is a complicated but necessary part of preparing for any masters degree. Part of the complexity lies in the wide range of funding options available, that depend on the degree, the institution, and your own circumstances. You need to investigate all these opportunities in the process of applying - ideally before you submit your formal application - to assess the feasibility of your proposed course of study. But if you can’t find institutional funding, commercial sponsorship, familial support, or the personal savings necessary to pay for the cost of a masters degree, then there is another option – a student loan.
A student loan at one level is very simple – it is the money lent to a someone studying to pay for either the university’s fees, the cost of living while studying (known as “maintenance”) or both. Unlike grants or stipends, student loans are given with the expectation that the student will repay some or all of the original amount, plus interest. The role and structure of student loans vary from country to country. In Germany, tuition is paid by the state and so loans are mostly unnecessary. In the UK, a single company handles almost all student borrowing; the conditions attached to repayment are more lenient than most commercially available loans, and after 40 years the remaining debt is cancelled. In America, tuition is more expensive, and student loans reaching tens of thousands of dollars are common. It’s important you thoroughly research these arrangements in the country where you’re studying, well before you apply.
The most important consideration when contemplating taking out a loan is to work out how and when you’ll pay it back. The conventional wisdom states that, as going to university will dramatically increase your earning potential, paying back any money you borrowed as a student will be relatively quick and painless. However, as the number of people with degrees has increased and the economy has slowed, the impact of higher education on earnings has lessened. If you are concerned about this debt, borrowing a little more money in order to undertake a masters degree in a well-paid, employable field – such as an MBA, Computer Science, or Marketing – might be a good idea. Although it may seem counter-intuitive, certain masters degrees still increase your earning potential significantly, meaning that you’ll pay off the loan more quickly – so spending more early on, will put you in a better position to pay off your existing loans over the longer term.
Ultimately, there is no straightforward answer to the question of whether or not getting a student loan and thus getting into debt is a viable option to fund your studies. It will depend entirely on the cost of the course itself, your own standard of living and circumstances, the earning potential the masters itself will confer upon you after graduation, as well as the repayment plans of the student loans on offer. You’ll need to weigh up all these factors, and work out whether or not borrowing money will pay off in the long run.
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