How To Avoid $40K In Student Loan Debt & Become A CPA


From the mailbag:


I wanted to get your thoughts on a Masters Degree in Accounting. I graduate this May with an undergrad in accounting and plan to start taking the CPA exam this summer. I have always planned on going to grad school, but just wanted to get your thoughts on if the benefits out weigh the costs of obtaining a masters degree as opposed to simply meeting the hours requirements for a CPA. It would be $5-10,000 vs. $30-40,000. I also have around $7,000 in debt currently and a 3.1 GPA.

Bean Counter Fan

This was one of my favorite questions I’ve received to date!

Average student loan debt is $26,000 per student last year. We’re no exception. Personal finance is something that eludes most accountants. Shocking but true. I speak from my own personal experience and dumb mistakes ($55,000 in student loans which I’ll be done paying off any day now)!

This is my personal opinion and some people may disagree but I stand by it. Masters Degrees in accounting are near worthless. I know because I have one!

CPA > Masters Degree

What do you need to have your masters for?

To teach? No. 

To get a job? No.

To get the CPA? No.

So why did I do it?

Here is the ONLY reason I would get a masters:

  1. Minimal difference in cost (less than $5,000)
  2. You need the same amount of hours to get to your 150 CPA hours requirement as it takes to get a Masters

I fell into both categories. I graduated my bachelors with 124 credit hours. The masters was 30 hours and I needed 150 for the CPA exam. Only 6 hours more and I have the degree! At about $500 per credit hour, it was minimal cost for a second degree.

The decisions this guy is about to make is going to be one of the best in his life! He has a 3.1 GPA which means he can land a great job making $40-55,000 in his first year.

With the $7,000 in debt currently adding $10,000, he should start working as a CPA with about $17,000 in student loans.

Making $55,000 a year, he should be able to pay that off in about 8 months.

The trick is to graduate and continue living like your in college for at least a year! You keep your expenses below $20,000 and you’ll be in great shape.

A debt free CPA in his early 20’s, that’s pretty incredible and quite rare. I knew a woman at PwC who had $150,000 in student loans. Very very sad story…

If you really want to go crazy, get a job during your additional coursework.

I worked 40 hours a week while taking 12 hours of Masters courses, and I passed the CPA exam during that time. If I can do it, so can you. It’s only a year.

If you’ve got a bachelors, you should be able to make $35,000 or so. Heck with that you can cash flow this Masters degree and only have the $7,000 when you start. With that you’ll be done in 3 months!

If you pass the CPA exam, your $1 to 5,000 (size depends on the firm) bonus will nearly knock that sucker out in Month 1!

My point is this:

Are you going to be the guy who has $3 4 or 500,000 when you’re 30 years old (or more)? Or are you going to add a car loan, mortgage, and credit cards on top of $40,000 in student loans? You can let that hover around keeping your net worth at zero or negative zero for 10-15 years? Most people do.

The next year of your life will set the tone. Get the required hours and get out. Get a job and get a firm to pay for your CPA exam and license. The masters won’t do anything but hurt your bank account!

  • Dee

    I totally agree

  • Nathan

    Best advice ever. “next year sets the tone for the rest of your life.” I’m throwing as much cash as possible at my loan. I’m not going to be the guy who has a net worth of zero or less than zero forever.

    • TheBeanCountercom

      Good for you Nathan! Keep me posted on your progress, I want to know when it’s paid off!

  • Alex

    From talking with a lot of management at public / private accounting firms, in order to move up in within the company, you would not only need your CPA but a graduate level degree. Thoughts on this? Agree / Disagree?

    • TheBeanCountercom

      Alex – great question! In public accounting firms, that is rarely the case. You may on occasion have a firm that wants the managing partner of the office or region to have an MBA, but it’s not required. Take Bob Moritz for example (PwC CEO), he only has a Bachelors.
      In private, it varies widely by company. There are *some* companies that will require it but if they do, they will almost always pay for it as well. You can take Saturday or night classes. Heck nowadays I’m sure there are even remote MBAs you can take online. Either way, at this early stage of life its important to stay out of debt. Once you have some savings or get the company to pay, get the MBA.

  • Alex

    Thank you for your response yesterday, one other quick question. I understand that you really push for students to stay debt free at an early age and we all know that grad school is expensive. What if you decide to become a graduate assistant (GA) full time and get your grad school completely paid for on top of a monthly check to pay for your monthly expenses. I’m sure a lot of people are in the same boat as me but I need about 30 more credit hours to complete my 150 and if I did grad school it would push me over the edge and I would be completely debt free even with a masters degree in accounting. Thoughts on just getting the 150 from general classes or becoming a GA and getting my grad school paid for? Thanks a lot!

    • TheBeanCountercom

      Thanks for the comment Alex! If you can do a graduate assistant position and the degree is important to you, go for it! I’ve got no problem with that at all. If you need an additional 30 hours and the masters is only a few more hours (and free), I would definitely do that.

  • Nathan Sims

    Feeling abysmal after reading this advice piece. I graduated with 32k of debt, MSA & BBA combined. I do feel like the CPA license trumps graduate degree. I guess I should have considered getting the credit hours alone. Hindsight.

    • TheBeanCountercom

      I did the same thing. But I plan to be out of my $55k in debt any day now (3 years after starting payments!) With your starting salary, you should be able to knock out $32K in no time!

  • Joshua

    Do you know which universities allow you to take grad level classes while not seeking a degree? Most I have looked at require you to be degree seeking. I need roughly 20 hours for my education requirement.