It’s no secret that a university degree is a considerable investment. Aside from the course cost, your income could also take a hit if you need to cut down on your working hours.
So is it worthwhile? Will your investment ‘pay off’?
To answer this question from a purely fiscal perspective, first look at what your degree will cost; tuition fees, course material and study supplies and any other costs such as additional childcare, transport or technology, as well as any reduction in your earnings.
Then consider what your investment will return in terms of career outlook and earning capacity. It’s best to extrapolate this out over five years.
Let’s look at two rather different scenarios...
Alex left high school a couple of years ago and has been working in retail since then. He likes his job, but he’d really like to follow his passion to help people and is thinking about studying to become a nurse. Let’s do the maths…
His tuition fees over three years for a Bachelor of Nursing are around $19,000. He also estimates he’ll need to spend about $1000 a year on incidentals such as Senior First Aid certificate, a uniform for his clinical placement, books and stationery; and he’d also like to upgrade his laptop to a new model at about $1500. He’s currently earning roughly $50,000 a year in his retail position, but would need to reduce his working hours and predicts his earnings will drop by about $10,000 per year.
His total investment of about $53,000 sounds like a lot.
Does it make sense financially? He does some research and sees that, as an enrolled nurse, he could expect to earn around $65,000 per year. So Alex’s increased earnings in his new career as a nurse could cover his investment in less than four years. So it makes sense for him to follow his passion.
Alison is currently working in accounting and considering upskilling with an MBA. She plans to study part time, so won’t need to reduce her working hours or income, which is about $84,000. In fact, her employer even allows additional paid study leave so she can dedicate extra time to studying ahead of exams. She already has everything she needs to study, so she anticipates her only costs will be tuition fees of about $24,000 and her books and other resources at about $1500.
So her total investment will be around $25,500.
She plans to use her MBA to improve her career opportunities and to work towards her ambition of becoming a CFO, which has a salary level above $100,000. So over time, studying could add up for accountant Alison as well.
Of course there are other non-financial costs and benefits associated with studying and earning a degree. Studying certainly takes time and effort, but learning can be an incredibly enjoyable and rewarding experience which can shape a better future for individuals, families and communities.
A few other things to consider:
- Remember you don’t need to pay your tuition fees upfront; visit the gov website https://www.studyassist.gov.au for information on tuition assistance.
- Some employers offer study subsidies, which can help with the costs of fees and allow you additional study leave; check with your employer.
- CDU offers a range of scholarships that can help with the cost of uni; from grants to cover the costs of books, to full scholarships and allowances.
- Maximise your annual tax return where possible. Check out our top tax tips for uni students for more information.
Check out more money tips through Launchpad.