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Is a master's degree worth it

Is a Master’s Degree Worth It?

It happens during every recession. Worried about money and career prospects, applicants flood grad schools. This trend continued during the COVID-19 pandemic with some schools reporting a bump of 20% over applications submitted in 2019. Many of them see a shiny new degree as the golden ticket to a better life. Unfortunately, that piece of sheepskin is more likely to be a pair of golden handcuffs. That’s because a master’s degree is expensive. Very expensive.


Undergrads have loan limits. This has reduced the amount of debt held by college grads –– plummeting by $15 billion between 2011 and 2018. Borrowing for graduate programs, however, has jumped over two billion dollars during the same period. This borrowing is now 40 percent of federal student loans issued each year. Over a decade, enrollment in graduate programs grew at a nearly identical percentage. Truth is, federal loan limits may have motivated university administrators to reign in costs for undergrads. The bad news is they don’t feel similarly driven when it comes to their graduate programs. Plus, grad school loans can become an all-you-can-eat buffet for starving students. Besides getting loans for standard expenses like tuition and books, they can also be used to underwrite a student’s cost of living. Imagine how pricey a year or two of housing in New York City, San Francisco, or Los Angeles can be. Then imagine paying for it for the next thirty years. Although higher education can pay off, in general is a master’s degree worth it? Here are some questions to consider, along with an easy way to calculate your return on investment.


Do You Want to Deal With Debt?


If you’re like the average holder of a bachelor’s degree, you borrowed over $30,000 to get that piece of paper. That means you realize how tough it can be making those monthly student loan payments. Now imagine servicing a debt load ten times as large. Daunting? It should be.


Making those payments is partly responsible for Millennials taking longer to buy a home or have a child. The more money you spend servicing debt, the harder it is to pay for anything else. Many graduates with high debt loads and relatively low salaries would answer a resounding “No!” to the question of is a master’s degree worth it?


Are You Realistic About Earning Potential 


A fancy paper doesn’t guarantee fatter paychecks. Yes, the median earnings of someone with a master’s degree was 20% higher than for someone with a bachelor’s. The problem is, that number reflects a wide variety of professions and incomes. At New York University, graduates with a master’s degree in publishing borrowed a median $116,000. Two years after graduation, their median income was $42,000! Given that many likely took publishing jobs in New York, that’s a tough wage to survive on. So, if you’re wondering is a master’s degree worth it, the first step is to be realistic. Research the average salary for people who hold graduate degrees in your profession. Don’t count on writing a bestselling novel or shooting a blockbuster movie. In the arts, successful people often spent years, even decades struggling before they could earn a decent living. And finishing your novel is going to be a lot harder if you wind up working as an adjunct “road scholar” –– traveling hundreds of miles every week to teach. 


Determine your degree’s return on investment by calculating the difference between the total loan amount you’ll need (including housing and cost of living) compared to the average annual salary. There are some great tools like this one online but you can definitely pencil it out on your own.

Reasons to Go


Do not enter grad school because you think it will motivate you to complete an arts project. Don’t do it because you have no idea of what you want to do and you’re seeking clarity. Please don’t apply just because everyone in your cohort has an advanced degree. 


Apply because you have found your passion and truly believe formal training will take you to the next level. Get a degree because you love your company and know an MBA will help you land in the C-Suite. When it comes to ROI, Stanford boasts a jump in earnings of over one million dollars the first decade after graduation.


Finally, keep in mind there is always opportunity cost. This is the cost of what you could be doing while you are attending grad school. So even if family money, savings, or your company subsidizes your education, you are still making a sacrifice. The truth is, no calculator or quiz can clearly determine your best choice. That’s up to you.

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