Study Up on Going Back to School

The grim outlook for the labor market has been leading more workers to reassess their career options. And it's tempting many to contemplate a return to school to buff up skills or gain completely new ones.

More education can add significantly to earnings, according to a report from the Census Bureau. In 2006, among workers 18 and older, those with less than a high-school diploma earned an average of $20,873, compared with $31,071 for those with a high-school diploma, $56,788 for a bachelor's degree, and $82,320 for a master's, professional or doctoral degree.

While such financial incentives may be alluring, experts say there are a number of important considerations that must be taken into account before pouring hard-earned cash into more schooling:

Determine Your Strengths and Weaknesses. Figuring out whether you need to go back to school should involve a self-assessment to determine what skills you already have and how you can build upon them to nab a job, experts say.

"Put together a picture of what you are good at and what you would like to do," says Deborah Russell, director of work-force issues at AARP. "If there is a skill gap, the next piece is to figure out where to get those skills."

It's also important to determine whether acquiring new skills will require taking just a course or two, or earning an entire degree. And workers should make sure to factor in family and social responsibilities, Ms. Russell adds.

Those with tight schedules may want to consider taking online courses, or immersion courses that are more intensive but last for a shorter period than a traditional course.

"Going back to school may look very different to different people," she says. "There may be caregiving obligations that may preclude you from taking courses during the day or evening."

Also keep in mind that a decision should be future-oriented, taking into account what employers will be looking for in coming years in addition to skills that are currently in demand, says Ronald Ferguson, an economist and lecturer in public policy at Harvard University's Malcolm Wiener Center for Social Policy.

"There are lots of different ways to arrive at estimates of what the future is likely to bring," he says. "Some combination or understanding of the current market and of what informed sources have to say about future demand would be prudent."

Find Local Demand. Try to find out which types of employees and skills are needed in your community, experts say.

Ms. Russell says you can start by asking career counselors at community colleges, as well as checking out state and local career centers. "Having a better understanding of your local community is more important than looking at it from a national level," she adds.

Once you know which skills are needed, you can tailor your education. More schools are cooperating with local employers to offer courses that suit workplace training needs, Ms. Russell says.

"Local training entities are much more in tune with developing training that corresponds to demands that employers have," she adds.

Weigh the Costs -- and Benefits. Make sure your financial gain from increased training is worth the expense, says Mr. Ferguson.

"Do some homework," he says, "to be sure that the skills [you] would be acquiring are both in demand and sufficiently compensated to make the time and effort and expense worth it."

Start by figuring out how much you are likely to spend. For the 2007-2008 academic year, in-state tuition and fees averaged about $6,200 at public four-year institutions, and about $23,700 at private four-year nonprofit institutions, according to the College Board.

Unless a degree is necessary, workers may be better off financially if they take just a course or two or pursue a certificate program.

And make sure to take advantage of low-cost or free offerings from community colleges, local groups and employers, such as programs teaching basic computer skills. An extension class might cost a couple hundred dollars or less.

Prospective students also should keep in mind that student loans may be harder to come by these days given recent credit-market problems, says Mark Kantrowitz, publisher of FinAid.org, a Web site offering financial-aid information.

"Lenders have tightened criteria," he says. "If you have a bad or marginal credit score, you are going to have a harder time obtaining a student loan."