Considering Grad School? Here's What You Need to Figure Out First

I have nothing against traditional schools. Loved my time in college.

However, I also think most people greatly under-appreciate how much they can learn through other means after they've started their careers. There are just so many options available now to pick up new skills that are so much easier than going back to school full-time. Now having said that, I will also concede that sometimes there is no substitute for taking formal classes. The hundreds of billions in outstanding grad school debt in the U.S. show that many people agree. A good percentage of the people I graduated from college alongside fully expected to be back at grad school full-time within two or three years. Under the right circumstances, that can be a good investment. But I’ve also seen plenty of people just kind of follow the herd to grad school, and you likely have too. People go to college, they work for a bit, they go to business school or law school or x school. It used to feel like the way of the world to me. But common sense and the frightening amounts of debt involved in going back to school full-time dictate that you should make investments in education with caution.

Something about spending so much of our adolescence preparing for the college application process has conditioned our generation not to question the value of education (full disclosure, I don’t have a postgrad degree). Our cohort has taken out hundreds of billions of dollars in loans to get MBAs, law degrees, and other postgrad credentials, trusting that education is always a good investment even when the experiences of our peers should at least make us think twice. It should surprise no one that without a firm expectation of how grad school will improve their careers, many exit grad school little better off than when they entered.  Going back to school is a personal decision, and we all have to weigh the tradeoffs and decide for ourselves whether it’s a wise investment. But you should at least make the decision with a clear understanding of your needs so you can get the best return on your investment.

I loved my undergrad years at Duke. But I cringe at traditional colleges and universities’ continued dominance of the education market among young people. In recent years, the number of viable alternatives to colleges and universities for serious learning has continued to expand. To consider any investments in education rationally, you have to start from first principles. Schools offer two services:

  1. Providing you with knowledge
  2. Certifying that you officially learned something

The classes and instruction constitute the first service. The degree with the school’s name on it is the certification service, and it signifies the rigor of your education to potential employers. Schools are brands too, and a school’s brand strength translates into the value of the certification it offers (although this strangely seems to have little bearing on the actual cost of education. The #1 ranked school in the U.S. News & World Report only costs about 10% more per year than the 136th ranked school). It is important to realize that traditional colleges and universities do not have monopolies on either of these. There myriad ways to learn most subjects and skills, and universities’ grip on certification is weaker than you might think too. To make a smart investment in education, you have to know how much you value the knowledge versus the certification they can provide.

When to Value Certification versus Knowledge

There are three questions you can ask yourself to figure out how much certification versus knowledge matter in your situation:

  1. Will what you learn make you better in your current role?
  2. Does your industry or company require advanced degrees to move up in your field?
  3. Are you part of the product in your job?

If what you plan to learn allows you to take on a new role or put knowledge into practice right away, then the school’s certification has less value. You don’t need to lean on any school’s brand when your track record proves you have the skills. Sure, in a perfect world we would all have Harvard or Stanford’s name on our résumés, but that’s no reason to let vanity cloud your judgment. Your track record is the ultimate certification of what you know how to do: “Jenny closed a seven-figure deal,” trumps “Amy has an MBA from Stanford,” every single time. On the other hand, if you want to make a major career change and have no way to prove you have the requisite skills in your current role, the certification from a university may be more valuable to you. That’s one reason why people who want to switch career tracks often find it helpful to go back to school first. The degree is a university’s way of saying to an employer, “This person doesn’t yet have a track record doing this, but trust us, they’ll know what to do.”

If industry expectations or professional guidelines demand certain advanced degrees or certifications, that is an obvious reason to value certification more highly. In certain fields, culture or protocol simply requires a graduate degree to advance beyond a certain level. Law, accounting, medicine, and careers in the sciences generally operate this way. However, unless you’re in one of these fields I would strongly advise that you pressure-test your assumptions. In most other professions, you don’t truly need advanced degrees to advance if you’re really good. If there really is a ceiling in your industry for people without advanced degrees, employers may offer tuition assistance to defray your tuition costs. I always recommend you make these education investments on other peoples’ tabs if you can.

A third dimension to consider in weighting education versus certification is whether or not you are part of the product you provide in your job. One of the things that I love and find so liberating about developing software (as opposed to consulting, where I started my career) is that I am not part of the product anymore. When a business licenses expensive software, or when someone downloads an app onto their phone, they don’t care if the people who designed it went to MIT or are just hackers in a basement somewhere. They just want the product to work. They might care about the company that makes it, but never the actual individuals. By contrast, if you’re in the advice business – financial advisors, strategy consultants, accountants, lawyers, therapists, and so on – you are an inextricable part of the product or service you sell. If this describes your situation, your certifications make people feel comfortable following your advice until your track record is sufficiently robust. That can be valuable if you’re just starting out. So if you expect to be a large part of the product or service that you want to provide in your career, then it may make sense to weigh certifications more highly. Again though, after a while people always care more about your track record.

Be a Smart Consumer

Besides knowing how much you value knowledge versus certification, other practical considerations like cost, schedule flexibility, and whether you want to take classes in-person or online will determine the best way for you to get the knowledge you need to advance your career. I can’t stress enough how important it is to keep the ultimate goal in mind when you invest your time and money in education. Education should never be the goal – the point it to use the knowledge you acquire to advance your career. There are usually multiple ways to acquire the knowledge you want, and you owe it to yourself to consider the pros and cons of each option.

Spending six years at a startup in which I was among the first ten employees taught me things you can’t learn in a classroom or from a book. Along the way, I also experimented with several different methods of education. I learned the basics of corporate finance and how to evaluate financial statements by taking the Chartered Financial Analyst (CFA) exam Level I. After that, I independently studied computer science textbooks and, with plenty of on-the-job training and mentorship, became knowledgeable about the technologies that make computing systems work. I took classes through a community college to learn Java at less than a quarter of what similar classes cost at a private university in Washington D.C. And I have taken free online courses from Coursera and others to pick up other skills that were useful to me at the time. The certification value of these options range from none whatsoever to respectably high, but in every case the knowledge I gained made me instantly better at my job and allowed me to create new opportunities for myself. I’ve received an awful lot of learning over the years for just a few thousand bucks all-in.

Bottom line: approach any investment in education like a business decision. Don’t let vanity make decisions for you, and remember that what you do in your career is usually the best certification of what you know.