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No Job? Don't default to grad school

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    USAA’s Scott Halliwell on the key decisions you need to make early in your career

  • Duration 6:04
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Trade out to Texas where we have Scott how well the financial planner with USAA.

Joining us from last stand and tell me -- The topic and that we're discussing is whether graduates college graduates after their bachelor's degree.

Should or should not go to graduate school.

It big to top picking up there's lots of different ways you can pick this one up -- basically there are one and a half million college grads.

In the spring 2012 class and one at a five of them.

Said we're gonna get a job which is gonna keep educating ourselves by some time what do you make of that Scott.

Well I -- I think it done it could be good strategy if you've got a good came plan in place but honestly I think that's one of the biggest concerns that I see is a financial planner.

Is that folks do that without necessarily having a game plan they don't look at it from the cost benefit analysis side of things and figure out what am I gonna get for all of the additional expense -- -- -- So how do you conduct that cost benefit analysis in your head and then explain -- your parents.

Well it's a great point frankly I think the parent should be involved in the discussion because if you go back I mean I know.

You know it's been a long time ago now but -- I was eighteen or 22 years old I.

Probably wasn't the most thoughtful as a related to financial matters so to the extent that these students -- and I think they should have somebody involved to help them make this decision.

But essentially I think what you need to do is sit back and say.

What's it going to cost me in order to go to school how much money is it going to actually flow allowed in terms of our real cash flow and our assets we have now.

Plus how much debt and my get a -- on top of what I might already have.

We think about it though -- I think needs to be taken a step further is.

Don't just think about that debt in terms of the dollar amount of debt but think about in terms of the monthly payment that you're gonna have to make.

One of the nice things about the the student loan industry is the US Department of Education has on its website an opportunity for people to do that calculation you can plug and that -- interest rates and dollar amounts Tom what your loans would be.

And then see what your pain it would be for -- periods of time whether to ten year repayment or an extended payment term so.

That's right start I start with figure out -- payment so -- -- then know what's gonna take to cover that when you get out school.

Most.

Graduate students upon graduation on average do we know how I know it's it's hard -- say positioning different feel as you can go -- you.

But -- -- -- -- do we have a gauge for how much debt they're graduating with undergraduate plus grad school.

They're number we like to use.

What it truly is a wide gap are well it's a pretty wide range and in I think if you look at.

Some some of the studies that -- out -- say that.

People graduate from undergraduate degrees with about 30000 dollars in -- on average.

-- but depending on where you go and what type of graduate degree you could be pushing up tens of thousands I've seen people you know 8090000 dollars in debt.

Right suing your career is at a crossroads some things you should and should not do -- or don't kick can down the road make sure like you said to do the math.

Understand how much your graduating with and don't be lulled by.

-- get a deferments or one of these things that I see so many people he caught up with recently and a deferment basically is.

Will let you deferred the -- of your payments for various reasons but you can basically delay them to some future point in time.

-- for the for the desperate financial person it might seem like a great idea.

Because hey I can push these loans often have to make the payments -- my cash flow -- -- going to be is challenge is what it would have been before.

The one big challenge with these though it is when you defer in many many cases you're essentially your loan is getting bigger and bigger and bigger.

So all of that interest that you should've been paying is adding to the the loan.

I actually had a case once where annual woman who had borrowed 75000 dollars ended up a 10025000.

Dollars in debt after the deferment period ended.

Again I guess -- being to remember raise while it's great they're gone on for an advanced degree so many other people are as well.

See you don't have the healthy job market where you can say -- my first job I'll make that.

That those loan payment back you know in one year's time that's not always the case case silly -- -- study survey done in May from Rutgers University.

With the help from the John held -- center for workforce development and -- based ask people what do you think of your current job.

36%.

Said it weighs just Ed job beard is doing it -- -- by.

30% considered -- a career and 33%.

Stepping stone to a career I feel like that's awfully -- your thoughts.

Yeah I mean you're literally talking about and only 13 of the people there are saying that they thought they were in it for the long haul rights have come in so to me I think -- in in -- any job market that we have.

That's sort of the way things are almost you know I know you know I started ought to have a degree in accounting I started out as an accounting personnel working for a big firm.

Com and I got -- financial services you know so I didn't at the time think it was going to be stepping stone but it worked out to be a great when foray.

I would just encourage folks who are in those jobs don't -- necessarily you or your life glory to your satisfaction or dissatisfaction with the current job.

As the end of the road or the way it's always going to be because the fact is if you do well -- -- job in -- -- and you're you keep the income coming in you keep yourself afloat financially.

And there's always an opportunity hopefully at least a move on did something that you might enjoy later once you sort of the lay of the land and and have a better understanding of what you really might want to do.

Scott how well thank you so much for that greeted by thanks for nine.

Thank you are OK and a that -- website on the screen right now and as we are doing -- it turned to the -- isn't anyone listening says.

To graduates have to go on to graduate school because they have nowhere else -- -- and then and they can also stay on their parents' insurance hunger.

That's my kind of true --

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