Calculator Inputs
How to use this calculator
- Enter your current salary and expected post-degree salary.
- Set growth rates to reflect realistic raises over time.
- Add yearly education costs, then subtract aid and part-time income.
- Choose tax and discount rates to estimate after-tax value.
- Submit to see break-even timing and cashflow details.
Formula used
- Net education cost per year = Tuition + Fees & Books + Living Difference − Scholarships − Part-time Income.
- Foregone earnings = Sum of after-tax “no degree” salary during study years.
- Total investment = Total net education cost + Total foregone earnings.
- Net advantage (year t) = (Expected after-tax degree earnings − after-tax no degree earnings) − Education outlay − Loan payments.
- Simple break-even occurs when cumulative net advantage becomes non-negative.
- NPV net advantage = Net advantage ÷ (1 + discount rate)t (end-of-year convention).
Example data table
| Scenario | Tuition / year | Degree years | Salary now | Salary with degree | Typical break-even |
|---|---|---|---|---|---|
| Public university, moderate aid | $10,000 | 4 | $45,000 | $65,000 | 6–9 years after graduation |
| Accelerated program, higher tuition | $18,000 | 2 | $55,000 | $80,000 | 3–6 years after graduation |
| Low cost program, small salary uplift | $6,000 | 3 | $40,000 | $48,000 | May exceed 10 years |
Career-focused analysis
Inputs that drive payback timing
Start by entering your current annual salary without the degree and the expected starting salary after graduation. The calculator applies your effective tax rate to estimate take‑home income, then grows each path using separate annual raise assumptions. This produces two comparable income streams over time. The difference between them is the earnings uplift that must repay your education investment, year by year, with transparent assumptions. Adjust values to match your role.
Full cost of attendance, net of support
Education costs are more than tuition. Include required fees, books, exams, and any change in living costs while studying. Subtract scholarships, grants, employer support, and realistic part‑time income to get net outlay per year. The calculator multiplies that by degree length to estimate total cash cost. Keeping inputs annual makes scenarios easy to compare across programs, locations, and study formats. If costs vary, use an average or the highest expected year.
Opportunity cost and completion risk
Opportunity cost often dominates the calculation. During study years, the no‑degree path continues earning and compounding raises, while full‑time study may reduce earnings to zero. The calculator sums the after‑tax income you would have earned during those years and treats it as part of your investment. It also applies a completion probability to the post‑graduation uplift, creating an expected, risk‑adjusted payback timeline. Use conservative values for planning.
Loans, cashflow pressure, and delay effects
Financing changes when you feel the cost. If you finance a percentage of net education cost, the calculator estimates a monthly payment using APR and loan term, then schedules payments after a grace period. Loan payments reduce the annual advantage in early career years and can delay break‑even, even when lifetime uplift is high. Compare scenarios with different financing shares to see the trade‑off between cash needs and payback speed.
Discounted value and horizon-based decisions
Discounting adds realism by valuing near‑term money more than distant gains. The calculator discounts each year’s net advantage by your chosen rate and reports an NPV break‑even alongside the simple break‑even. A higher discount rate typically pushes break‑even later, emphasizing pathways and lower costs. Review the ending advantage within your horizon; a plan that breaks even but leaves minimal surplus may not justify the effort or risk.
FAQs
What does break-even mean here?
Break-even is the first year when cumulative net advantage becomes non‑negative. It means expected after‑tax earnings gains have repaid education costs, foregone income, and loan payments within the modeled timeline.
Why do I see two break-even results?
Simple break-even ignores the time value of money. NPV break-even discounts future gains using your discount rate, so it usually occurs later and better reflects opportunity cost and inflation.
How should I choose salary growth rates?
Use realistic averages from your industry and past raises. If uncertain, test a lower and higher rate. Small differences compound over decades, so conservative growth assumptions reduce the risk of overestimating payback.
Should I include part-time income while studying?
Yes, if it is reliable. Enter a conservative annual amount after considering schedule limits. Part‑time income reduces net education outlay, but it may also affect study time, so avoid using best‑case estimates.
How does completion probability affect results?
It scales the expected post‑graduation uplift. Lower probability reduces expected gains while costs remain, pushing break‑even later. Use it to stress‑test plans that depend on challenging programs or uncertain job placement.
Can this replace financial or career advice?
No. It is a planning tool that simplifies taxes, earnings paths, and loan details. Use it to compare scenarios, then validate assumptions with program costs, local salaries, and your personal risk tolerance.