* This post is inspired by a question asked at Political Science Job Rumors. Even if the poster was really trolling, it is an important question.While much of the discussion can and should center on the accumulation of debt and the uncertain job market at the end of the degree, I will focus on just one aspect. If you are not funded, you will have to compete with other graduate students for whatever scraps of funding there are. This will create a most unfortunate environment where your peers are not collaborators but competitors.
When I was finishing grad school (where I had guaranteed funding for four years), I would meet people from grad programs where only some folks were funded. Their experiences and mine were night and day. They tended to hate some or many of their colleagues, whereas I found my peers at UCSD to be an incredibly supportive community. To be sure, it was not just about funding, but we are social scientists and incentives do matter, shaping the culture of a place.
We played soccer (although I sucked), basketball (I really sucked), and softball (I was more than a dead pull hitter--3rd base coaches beware), and we played poker (I am no longer the fish I was then). We helped each other through comprehensive exams. We gave each other feedback on our dissertations and on our practice job talks. Oh, and we celebrated each other's big moments (that would be bachelor parties). While I do not fully remember my own bachelor party, I do appreciate that they threw it for me and took care of me, both in getting me drunk and dealing with the resulting corpse afterwards.
While I was eager to get out of grad school and start making real money ($25k at my first job--woot!), I knew I would miss not just the beaches, the weather and the sea lions of San Diego but these folks. Luckily, I have managed to keep in touch with many of them, including co-authoring the NATO and Afghanistan book with one of them.
But this gets to the larger point--grad school is not just learning in the classroom but the development of a safety net and a network of friends in the discipline. If you go to a program where everyone has to compete with each other for funding, you not only face an ugly five or seven years, but a disadvantage for the rest of your career. I can always call or email one of my friends from grad school (or even successive generations since we all have good will towards the larger community) if I have a question or need a hand on something. Those that go to grad school where funding is not guaranteed for all do not.
I cannot be clearer: if the choice is a PhD program without funding or not going to grad school, I strongly, strongly advise not going to grad school. Try again next year, do stuff to improve your application (get an MA that might lead to better recommendations and grades), or seek an alternative path.