Can I Afford the Cost of a Course for Salary Advancement?

The better question might be can you afford not to take a course for salary advancement. I am going to work through two realistic scenarios on the financial benefits of taking courses for salary advancement (never mind you may become a better teacher in the process). While I will make assumptions for each scenario, each of these assumptions as well as other factors (such as tax benefits and liabilities) will vary from person to person. In most cases, these assumptions will only make minor adjustments to the calculations.

Scenario #1

Amanda has just finished her third year of teaching and has no education beyond a Bachelor of Arts degree. The district provides no tuition reimbursement and it costs $350 for a 3 credit hour class. Amanda will need to borrow the money at 8% interest to pay for the courses. Amanda will take 21 graduate hours over two years to advance on the salary schedule and this will improve her salary by $1,706 per year. Once Amanda has paid off her debt, she will invest her salary increase tax deferred at 8% interest.

Year 1 (4th year of teaching)
4 courses (12 credits) @$350 per course -$1,400
8% interest -$ 112
-$1512 (in debt)

Year 2 (5th year of teaching) -$1512
3 courses (9 credits) @$350 per course -$1050
8% interest -$ 205
-$2767 (in debt)

Year 3 (6th year of teaching) -$2767
8% interest -$ 221
Salary increase +$1706
-$1282 (in debt)

Year 4 (7th year of teaching) -$1282
8% interest -$ 103
Salary increase +$1706
+$ 321 (saved)

Retirement
Year 27 (30th year teaching) +$105,769 (saved)

That is just one salary advancement, try an MA +60!!!

Scenario #2

Jack is starting his 17th year of teaching and has a Master’s Degree. The district provides $600 per year in tuition reimbursement and it costs $350 for a 3 credit hour class. Jack will need to borrow money at 8% interest to pay for the courses. Jack will take 15 graduate hours over the next year to advance on the salary schedule and this will improve his salary by $2,002 per year. Once Jack has paid off his debt, he will invest his salary increase tax deferred at 8% interest.

Year 1 (17th year of teaching)
5 courses (15 credits) @$350 per course -$1750
Tuition reimbursement + 600
8% interest -$ 92
-$1242 (in debt)

Year 2 (18th year of teaching) -$1242
8% interest -$ 99
Salary increase +$2002
+$661 (saved)
Retirement
Year 14 (30th year of teaching) +39,657 (saved)

Conclusion
Yes, many assumptions have been made and the scenarios may be oversimplified, but the scenarios are realistic the dollars saved are substantial. These scenarios do not take into account the ability for multiple salary advancements nor do they show the benefits in a retirement based on highest salary averages. GO GET THE HOURS!