Is Grad School Worth It? Calculator
A graduate programme against staying put
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Fill in the fields on the left and this updates as you type.
Know what this estimate is based on
- Jurisdiction
- General mathematical model
- Scope and limitations
- Educational estimate only. Confirm the assumptions, current rules, fees, and rounding that apply to your situation before making a decision.
- Source links checked
- Jul 30, 2026
Built and regression-tested by Smart Tools Lab. It has not been individually reviewed by a licensed financial, tax, or legal professional.
How to use
- 01
Enter the programme's cost a year net of scholarships and the number of years it runs, then your salary now and the salary you realistically expect afterwards. Check the second against a real job posting rather than the programme's own marketing.
- 02
Set the professional-degree field to 1 for medicine, dentistry, law, pharmacy, veterinary, optometry, podiatry, chiropractic or theology, or leave it at 0 for a master's or PhD. The two sets of borrowing caps differ by a factor of two, so this field changes the answer materially.
- 03
Enter any employer tuition help a year, and the income you would give up while studying — 0 if you keep working through the programme, your full salary if you stop.
- 04
Set the private loan rate and term for anything above the federal cap, and the years to compare. The federal rate, the caps and the Section 127 limit keep their sourced defaults.
- 05
Read the shortfall the caps leave, what filling it privately costs, and the salary the programme has to reach to justify itself, then check the year-by-year table to see when the two paths cross.
Formula
Cost net of employer help = the programme's cost a year × the years it runs − the employer help a year × those years, never below zero. Federal borrowing available = the lesser of (the annual cap × the years) and the aggregate cap, where the caps are $20,500 and $100,000 for a graduate student and $50,000 and $200,000 for a professional student. Federal borrowed = the lesser of the net cost and that availability. Shortfall = whatever is left, and it is priced as a private loan at the rate and term you set. Each loan is drawn evenly across the years of study and accrues interest to the end. The federal balance then repays over the standard plan's term, set from that balance under the 2026 tiers; the private balance repays over its own term. Both payments are the ordinary amortizing-payment formula. Two paths run from year 1, the first year of study. Staying put earns your current salary grown at its own rate. The graduate path earns the same less any income given up while studying, then the salary after the programme grown at its own rate, less both loan payments for as long as they run. Break-even = the first year after the programme in which the graduate path's running total reaches the stay-put path's. The salary the programme needs = the stay-put salary at graduation plus (all-in cost + income given up) ÷ the years remaining in the comparison.
Example
A two-year master's costs $30,000 a year, $60,000 in all. The employer pays $5,250 a year, the whole of the Section 127 tax-free limit, so $10,500 comes off and the net cost is $49,500. The student keeps working, earns $62,000 now, expects $82,000 afterwards, and compares fifteen years. Federal loans reach $41,000 — two years at the $20,500 graduate cap — leaving a shortfall of $8,500, priced at 11% over ten years at $137 a month and $7,954 of interest. The federal balance repays over fifteen years at $442 a month, so the two payments together are $580. Interest across both loans is $46,584, and the programme costs $96,084 all in against $60,000 of tuition. Because the student keeps working, the two paths are identical for two years and the graduate path pulls ahead as soon as the higher salary starts: the break-even is year 3. Over fifteen years the graduate path clears $1,361,352 against $1,111,779, a difference of $249,573. The programme needed a salary of about $72,530 to justify itself and delivers $82,000. Two variations, both run: dropping the employer help entirely raises the shortfall to $19,000 and the all-in cost to $116,409, narrowing the fifteen-year gap to $229,247. Treating the same programme as a professional degree lifts federal borrowing to the full $49,500, removes the shortfall, but stretches repayment to twenty years at $468 a month and raises the all-in cost to $112,304.
Definitions
- Grad PLUS
- The Federal Direct PLUS Loan for graduate and professional students, which covered any gap up to the full cost of attendance. Closed to new graduate and professional borrowers for periods of instruction beginning on or after 2026-07-01.
- Aggregate cap
- The total a student may borrow across a programme type, beyond undergraduate borrowing: $100,000 for a graduate student, $200,000 for a professional one. Separate from, and smaller than, the $257,500 lifetime maximum across all title IV loans.
- Shortfall
- The part of a programme's cost that federal loans can no longer reach. It does not disappear: it is met from savings, from family, or from a private loan underwritten on credit.
- Section 127
- The provision allowing an employer to pay up to $5,250 a year of education assistance tax-free, made permanent by P.L. 119-21 and indexed from tax years after 2026. Anything above it is ordinary taxable wages.
- Professional student
- A student in medicine, dentistry, law, pharmacy, veterinary medicine, optometry, podiatry, chiropractic or theology. The category carries the higher borrowing caps, and a student who is both graduate and professional shares the $200,000.
Good to know
What Public Law 119-21 changed, and why the caps now bind
For most of the last two decades the annual and aggregate limits on graduate borrowing were close to irrelevant, because a graduate or professional student who reached them could take a Grad PLUS loan for the remainder of the cost of attendance. That ended in 2026. Under Public Law 119-21, a graduate or professional student is no longer eligible for a Federal Direct PLUS Loan for periods of instruction beginning on or after 2026-07-01. The limits that were once a formality are now, for most students, the end of federal borrowing altogether. The limits themselves are these. A graduate student may borrow $20,500 a year and $100,000 in total beyond their undergraduate borrowing. A professional student — in medicine, dentistry, law, pharmacy, veterinary medicine, optometry, podiatry, chiropractic or theology — may borrow $50,000 a year and $200,000 in total, and a student who is both shares the $200,000. Across everything one student borrows under title IV there is a lifetime maximum of $257,500, which excludes parent PLUS loans taken on a child's behalf. The page applies whichever pair of caps matches the professional-degree field, which is why that field is worth setting correctly: the two regimes differ by a factor of two. What this means in practice is visible in the worked example. A two-year master's costing $30,000 a year comes to $60,000; $10,500 of employer help brings the net cost to $49,500. Federal loans reach $41,000, being two years at the $20,500 annual cap, and stop. The remaining $8,500 is a shortfall, and it does not go away because the law stopped lending. It is met from savings, from family, or from a private loan underwritten on credit. Before 2026 that $8,500 would simply have been more federal borrowing at a published rate with statutory protections attached. The single most useful thing to do with this page is to raise the programme cost and watch the shortfall appear, because for expensive programmes it grows quickly and it is the part of the plan most likely to be discovered late.
Pricing the shortfall: what private money costs and what it gives up
A shortfall has two costs, and the obvious one is the smaller. The obvious cost is interest. In the worked example, $8,500 borrowed privately at 11% over ten years is $137 a month and $7,954 of interest across the life of that loan, against the 8.07% charged on graduate Direct Unsubsidized loans first disbursed between 2026-07-01 and 2027-06-30. Remove the employer help from the same example and the shortfall nearly doubles to $19,000, costing $17,779 in private interest and lifting the all-in cost of the programme from $96,084 to $116,409. The rate gap compounds over a decade into real money. The less obvious cost is everything a private loan is not. A federal loan carries statutory protections that travel with it: access to the Repayment Assistance Plan, income-driven payments, statutory deferment and forbearance, and discharge in defined circumstances. A private education loan carries whatever its contract says, is underwritten on credit rather than granted on need, and frequently requires a co-signer — which transfers the risk to a parent or partner who may not fully appreciate what they have agreed to. None of that appears in an interest rate comparison, and all of it matters if your income after the programme turns out lower or later than expected. It is worth being clear about what the page does and does not model here. It prices the shortfall at a rate and term you supply, and it assumes the money can be found. For some students it cannot be found at any rate, and a programme that cannot be funded is not a programme you can take, whatever its return on investment. The order of operations therefore matters: establish that the full cost can actually be met, then ask whether it is worth meeting. A useful habit is to run the page once with the professional field set correctly and once with the employer help at zero, so you can see the range the funding gap can occupy before you commit to anything.
Employer help, Section 127, and the salary the programme has to reach
Employer tuition assistance is the cheapest money in this calculation, and it is bounded by a tax rule worth knowing precisely. Under Section 127, an employer may provide up to $5,250 a year of educational assistance free of income and payroll tax. Public Law 119-21 made that provision permanent and indexed the limit from tax years beginning after 2026, rounded to the nearest $50. The amount also covers employer payments toward student loans, not only tuition. What matters for planning is the treatment above the line: assistance beyond $5,250 in a year is ordinary taxable wages, so an employer offering $10,000 is not offering twice as much value as one offering $5,250. The excess is taxed at your marginal rate, and the headline figure overstates what you receive. In the worked example the employer pays exactly $5,250 a year, the whole of the tax-free limit, covering $10,500 of the $60,000 total. The page then converts the entire cost into the one number that makes the decision tractable: the salary the programme has to reach. It takes the all-in cost including interest, adds any income given up while studying, and spreads the total across the working years remaining in the comparison. In the example that is $96,084 spread over the thirteen years after a two-year programme inside a fifteen-year horizon, giving a required premium of $7,391 a year over the $65,139 the student would have been earning anyway — a required salary of about $72,530. The student expects $82,000, a premium of $16,861, so the programme clears its bar with room to spare. This figure is more useful than the total cost, because a salary is something you can verify. A required salary of $72,530 can be checked against real job postings for the role the programme leads to; $96,084 of cost cannot be checked against anything. If the required salary looks implausible for the field, the programme does not pay for itself on these assumptions, and no amount of enthusiasm about the subject changes the arithmetic.
Why the break-even can be early even though the loan is long
The worked example breaks even in year 3 while its federal loan runs for fifteen years, and that combination confuses people often enough to be worth explaining. The two are measuring different things. The break-even compares cumulative earnings on two paths; the loan term describes a balance being retired. A borrower can be ahead on cumulative earnings for a decade before the debt is cleared, and there is nothing contradictory about it. The specific reason the example breaks even so quickly is a modelling choice the visitor controls. Its income-given-up field is set to zero, which models a student who keeps working through the programme — an evening or part-time master's. The two paths are therefore identical for the first two years, the gap is exactly zero at the end of year 2, and the graduate path pulls ahead the moment the higher salary starts in year 3. Set that field to a full salary instead, modelling someone who stops work to study, and the break-even moves out sharply, because two years of forgone earnings must be recovered before anything else. This is the field that separates a part-time master's from a full-time one, and it changes the answer more than tuition does. A second variation is worth running. Setting the professional-degree field to 1 in the same example lifts federal borrowing from $41,000 to the full $49,500 needed, so the shortfall disappears entirely and no private loan is required. That sounds unambiguously better, and it is not. The larger federal balance falls into a higher standard-plan tier and repays over twenty years rather than fifteen, at $468 a month, so total interest rises and the all-in cost goes up from $96,084 to $112,304. More federal borrowing room is not the same thing as a cheaper degree. One caveat applies throughout: every figure on this page is before income tax, because the comparison is between two salaries taxed in broadly similar ways. If the programme would move you across a bracket or a threshold that matters, work the premium out after tax and enter the after-tax figures instead.
Frequently asked questions
How much can a graduate student borrow from the federal government in 2026?
A graduate student may borrow $20,500 a year and $100,000 in total beyond their undergraduate borrowing. A professional student in medicine, dentistry, law and the other named fields may borrow $50,000 a year and $200,000 in total. Both limits come from P.L. 119-21 and apply to loans made on or after 2026-07-01. The lifetime maximum across all title IV loans one student borrows is $257,500.
Is Grad PLUS really gone?
Yes, for new borrowing. A graduate or professional student is no longer eligible for a Federal Direct PLUS Loan for periods of instruction beginning on or after 2026-07-01. That matters because Grad PLUS used to fill any gap up to the full cost of attendance, so the annual and aggregate limits were rarely the end of federal borrowing. Now they usually are, and anything above them has to come from savings, from family, or from a private loan.
What does the shortfall cost me?
In this page's example a $30,000-a-year, two-year programme costs $60,000, less $10,500 of employer help, leaving $49,500. Federal loans reach $41,000 — two years at the $20,500 annual cap — and leave a shortfall of $8,500. Filling that privately at 11% over ten years is $137 a month and $7,954 of interest. Take the employer help away and the shortfall becomes $19,000, costing $17,779 in private interest and lifting the all-in cost from $96,084 to $116,409.
How much does the programme have to raise my salary to be worth it?
In the example it has to lift your pay to about $72,530 — a premium of $7,391 a year over the $65,139 you would have been earning anyway — to cover $96,084 of cost, interest and earnings given up across the thirteen years after finishing. The example expects $82,000, a premium of $16,861, which clears that bar. This is the single most useful output on the page, because it converts a large and frightening total cost into an annual salary figure you can check against real job postings.
Why does it break even so quickly when the loan runs for fifteen years?
Because the comparison is cumulative earnings, not the loan balance. The example keeps you working through the programme, so the two paths are identical for the first two years and the gap opens the moment the higher salary starts. The break-even lands in year 3, one year after finishing, even though the federal loan runs fifteen years at $442 a month. If you would stop working to study, enter the income given up and the break-even moves out sharply — that field is what separates a part-time master's from a full-time one.
Does a professional degree change the answer much?
It changes how the cost is funded. Setting the professional field to 1 in the example lifts federal borrowing from $41,000 to the full $49,500 needed, so the shortfall disappears and no private loan is required. But the larger federal balance repays over twenty years rather than fifteen at $468 a month, and interest rises, so the all-in cost goes up from $96,084 to $112,304. More federal room is not the same as a cheaper degree.
Are the figures on this page before or after tax?
Before income tax. The comparison is between two salaries taxed in broadly similar ways, so tax would scale both sides without changing the shape of the answer much. If the programme would move you into a materially different bracket, or across a threshold that matters to you, work the premium out after tax and enter the after-tax figures instead.