(MONEY Magazine) – LAST JANUARY, THREE years into her career at Sun Microsystems, Aphrodite Aujero realized that she had to relive a bit of her past to have the future she wanted. An engineering change-order analyst, she hopes one day to manage one of Sun's many work groups, but prominent in the postings for those jobs are the words "M.B.A. preferred." So starting this fall, she'll be hitting the books again, this time going for her M.B.A. at either of two California universities, San Jose State or Santa Clara.

As Aujero recognizes, the argument for a graduate degree is stronger than ever in today's workplace, where an undergraduate diploma is more of a commodity than a credential. First of all, the advanced sheepskin boosts you into a different pay scale. According to the Bureau of Labor Statistics, the 1995 median salary for all workers with master's degrees was $43,784, vs. $35,672 for those with a bachelor's. That increase doesn't surprise Aujero. "When I get my M.B.A. I hope to jump two pay categories to about $60,000," she says. The jobs at those upper pay scales tend to be more fulfilling as well, another reason Aujero is willing to kiss her free evenings and weekends good-bye for the 20 months it will take to earn an M.B.A.

But don't kid yourself: Going back to school will cost you more than a few missed episodes of Melrose Place. Tuition alone at a private graduate school runs about $11,000 a year, with top professional degree programs quickly approaching $30,000. If you go to school full time, you have to add in the salary you lose from not working, plus living expenses, which brings the annual bill to as much as $70,000. Before you spend that kind of money, you need to ask yourself three questions: What do I want this degree to accomplish for me? Is going back to grad school the only way to accomplish it? And is it worth the cost?

In some careers, graduate degrees are like pitons--nobody climbs very far without them. Some public school systems, for instance, require that teachers have master's degrees in a particular subject or in education. Likewise, a career in marketing or finance demands an M.B.A. Headhunter Gene Shen, managing director of the Whitney Group in New York City, estimates that 70% to 80% of managers in finance have the degree.

The best way for you to sort out what will advance your career is to talk to people in your field who have the positions you want. Ask them what it took to get their jobs, what they think you should do and what kind of salary increases you might expect.

If you work in advertising, public relations or retailing, you might discover you don't need to go back to school at all. "For some people, work experience takes the place of getting an advanced degree," says Dean Porter of Consultants in Career Development in Long Beach, Calif. Or maybe a year of part-time study to earn a certificate in your field will do the trick. Certificate programs, geared to providing students with highly specialized knowledge about a specific subject, cost as much as $4,000, depending on the number of courses you need for the credit.

Certificates are particularly useful in any fast-moving area where technology is taking over or required skill sets are changing. Human resources, for example, has been transformed from a people-oriented career to more of a strategic, quantitative one where a background in both organizational psychology and business is important. Medical technicians and computer scientists often need certificates to update their skills. Be sure to take your courses at an accredited, degree-granting university, however. Should you decide to get a master's degree later, the certificate credits may be transferable.

If you decide that graduate school is what your career needs, you'll have to figure out how to pay for it. The most cost-effective way to pursue your degree is to do so part time, as Aujero plans to do. It's especially economical if your employer reimburses you for work-related courses as long as you continue on the job, as Sun Microsystems does. Ask your human-resources department exactly what your company's tuition plan covers.

If your employer doesn't pick up the tab, you'll probably prefer going to school full time--assuming you can swing the extra expense. Earning your degree part time at night and on weekends can take up to twice as long, and you'll have almost no free time between work, classes and studying. If your own pockets aren't deep enough, check out the 20,000 or so private scholarships available to graduate students, which are described in Daniel Cassidy's Worldwide Graduate Scholarship Directory (Career Press, $26.99) and listed on computer databases like CASHE.

When borrowing is unavoidable, start your quest at the financial aid office at your school. They'll be able to tell you about all the options. Uncle Sam's main contribution is the federally subsidized Stafford Loan, which this year will provide as much as $8,500 at 8.25%. The government pays the interest that accrues while you are still in school. An additional $10,000 is available to students in the form of unsubsidized Stafford Loans, but interest accrues immediately. For both loans, you begin repayment six months after you graduate.

Alternative loan programs like GradExcel and TERI (see the table) can fill the gap between Stafford Loans and your needs. Students can borrow at rates from 8% to 15% provided they are pursuing a degree at accredited schools. Interest accrues immediately and repayment starts six to nine months after graduation.

Act right away, however. The sooner you achieve your educational goals, the sooner you can resume building your career--not to mention the rest of your life. No one knows that better than Aphrodite Aujero, who got married last year and says: "I'd like to have my degree out of the way before we have our first child."