Whether you're thinking of a top-tier MBA or a PhD in anthropology, there is a right way and a wrong way to approach graduate school. You need to understand your dreams, and what is required to achieve them. Also, you need to understand the marketplace, and what it values.

If you dream of climbing ladders in the Fortune 500, get an MBA. The degree a VIP ticket to corporate life and a prerequisite for the top ranks. And if you have the luck of being in your 20s, don't wait, get the degree now, when it can get you a better starting job after you graduate. If you've already made headway in your career, you'll still need that MBA, but when you're older it's more like a career lubricant than a jump start: The degree has little impact on where you are now, but prevents you from getting stuck later.

Think twice before cashing in your chips for less respected school. The top five or ten business schools have a much, much higher value in the business world than all the other business schools. If you attend the third tier school, do it at night because the cost to your checkbook and your career growth while you're in school do not outweigh the benefits of the degree you'll earn.

For some people, though, graduate school is not so much a way to fulfill a dream as a way to put off finding one. Thomas Benton, a pseudonym for an assistant professor who writes a column for the Chronicle of Higher Education, blames much of the flight to graduate school on grade inflation and fragile egos: “Humanities majors are used praised from professors. Many recent grads return to school when they discover that not everyone thinks they are as great as their humanities teachers did. Humanities don't have the objective standards of business. Going back to grad school allows people to reestablish their ego. But it is short lived because they have to face the same market when they get out.”

So be honest with yourself. If you're going back to school because you're nostalgic for the days when you could get a good grade and a pat on the back. If you're looking for grad school to give you breathing room from the realities of adult life, you probably need a social worker more than you need another degree.

Besides, breathing time in grad school only delays future feelings of suffocation. For example, MFA programs do not make you more creative, they make you more qualified to teach. And the academic job market is a nightmare. One out of five people who enter English literature PhD programs will get a job in that field. The rest will find themselves back at square one, waiting tables, albeit with improved literary banter, and looking for a career.

Lost humanities students with an eye for cash and stability often enter law school because other professional schools require too much math or science. Yet the land of lost lawyers is full, too, which confirms that if you don't have a passion for what you are going to learn in graduate school, you shouldn't go.

If you still think you might be best off at grad school, then here's a checklist of things you should do before you apply:

1. Try other jobs first. The people who do best in graduate school are those who don't use it to escape their terrible job life. So find decent alternatives to going back to school, and if you still want to go back to school then you should.

2. Determine if an advanced degree is necessary. Talk to people who are where you want to be in five years to ten years. If those people got there without a degree, then you probably can, too.

3. Take the passion test. Are you reading about your proposed graduate topic now, before you are in school? If you're not passionate enough about the subject matter to read about it on your own, then you should find something to pursue that excites you more.