September 05, 2013 10:50 AM

DEAR MARY: How do you finance your education without taking out loans? I need to get a master’s degree, as I have hit a ceiling, but I don’t have $40,000 and don’t want to take out loans. Will colleges allow me to move slowly and pay as I go? I just don’t feel like there is a choice, and it’s stopping me from getting my education. — Ana, email

DEAR ANA: Do you need a master’s degree or want one? Here’s the difference:

Let’s say you are a teacher with a contract in a school district that gives an automatic pay increase once you receive your master’s degree. In that case — and provided the monthly payment on the total student debt will not exceed the net salary increase (you can easily project what this will be) — I would have no problem with you getting your degree using student loans because you have a reasonable expectation that you will be able to repay that loan (which, by the way, is Rule No. 7 in my book, “7 Money Rules for Life”).

But if, on the other hand, you want to get a master’s degree on “spec,” hoping that it will help you get a promotion or make you more competitive in the marketplace, I would caution you against going into debt to do it.

In these difficult times, when there are so many people vying for jobs, taking on that kind of unsecured debt could sink your finances while you wait, particularly if you were to go through a season of unemployment.

What would it take for you to save $40,000 cash? I’m serious! Why can you not do that? Or save enough to pay for one semester at a time, as you go?

If you say you don’t have four years to wait while you save the money, let me suggest that if you do it with debt, you’re going to spend 10 or even 15 years paying for that decision.

Why not save the money first, then go to school? You’ll cut the cost in half (or even more, depending on interest rates), and once you graduate you’ll know that you are really done — done with studies and payments, too.

You must change your mindset that says it is not possible to pay as you go; that the only way to go to college is to get student loans. It is possible!

Those who are doing their education that way (no spring break trips, no cable TV, no new clothes, no eating out, no cool electronic toys — living the life of a starving student) are heroes in my mind. They come out on the other end with zero debt and more options than those who skate their way through and end up with $25,000, $75,000 or even $200,000 in student debt.

I just spoke with one of the regretful students the other day. He has more than $200,000 to pay back.

It must have been so nice to get his Ph.D. without having to worry about an annoying job. But soon he will have to pay the piper, and I don’t know of an entry level job in any field that will pay him enough to cover the huge payments, let alone his cost of living as an unemployed Ph.D.

I wish you well as you make this very important and life-changing decision.

Mary invites questions at mary@everydaycheapskate.com, or c/o Everyday Cheapskate, P.O. Box 2099, Cypress, CA 90630. This column will answer questions of general interest, but letters cannot be answered individually. Mary Hunt is the founder of www.DebtProofLiving.com, a personal finance member website and the author of “7 Money Rules for Life,” released in 2012. To find out more about Mary and read her past columns, please visit the Creators Syndicate Web page at www.creators.com.

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