Examining the Real Cost and Benefits of a Master’s Degree
Congratulations. You’ve just graduated from college, have a degree in hand, and posses the one thing that almost every college graduate is familiar with—debt. So, armed with your new education, a strong desire to jump into the working world feet-first, and an even stronger desire to start paying off student loans, you decide to immediately start working.
But wait! What if becoming a working stiff before the ink on your sheepskin has dried doesn’t appeal to you? What if you decide that pursuing a graduate degree is the only way to ensure long-term job security and higher pay? Is obtaining a master’s degree the only path to long-term career stability? Does a higher education mean higher pay? The answers may not be as obvious as you think.
True enough, obtaining a master’s degree can lead to job security and more opportunities for advancement. However, it does depend on the field in which you want to work. Put simply, some careers demand that prospective employees get a master’s degree. For example, in natural sciences and law, an entry-level position is only available to those possessing a master’s degree. Want to be a teacher? You should plan on obtaining a master’s degree at some point, as many districts require it in order for teachers to continue employment. For anyone seeking work in these fields, obtaining a master’s degree is not about making more money or acquiring promotions, it’s about getting a job and keeping it. That said, obtaining a master’s degree is not a question of price, but of desire. If you desire a job that mandates having a master’s degree, then getting one is not an option.
When getting a master’s degree IS an option, many college grads are left scratching their heads. This is where determining the full pros and cons can get tricky. After all, some students borrow $100,000 or more just to complete a two-year program. After interest, payments, and the stress of owing so much money, it is important to break down prospective salaries with a master’s degree to determine if the cost is worth it.
According to the 2000 census, households with someone holding a master’s degree earned approximately $77, 935. However, the median household income for those possessing bachelor’s degrees was $65, 922. Clearly, there is a definite financial advantage to going the extra educational mile.
The cost of obtaining a master’s degree—nearly $100,000—can look pretty daunting on paper. However, appearances are deceiving. First of all, most graduate programs average around $60,000 dollars. So, if a student takes out a student loan for $60,000, the higher salary would end up paying for the education in about four years.
After that, what you make is what you keep. According to the U.S. census bureau, the average person with a master’s degree earns around $240,000 more than someone with a bachelor’s degree. Over a lifetime, a master’s degree can translate to a lifetime salary of $3.3 million. Obviously, $3.3 million - $100,000 is a pretty nice equation—and one worth calculating.
Don’t mistakenly think, however, that a master’s degree is an instant ticket to easy money. In some fields, a master’s degree may be nice—but not vital to earning more money or gaining clout. Take business, for example. For years, business majors all over have flocked to MBA programs, certain that doing so would sign their clinch their future paychecks. Imagine their surprise, then, when two researchers at Stanford’s Graduate School of Business released a study in August 2002, stating that a master’s degree in business administration does not “teach students anything useful in the real world of business.” They also went on to say that the master’s degree has little effect on salaries in the long run.
No matter what the cost of the program, it is imperative that you research your field and the true economic impact that obtaining a master’s degree will have. How much, compared to recent bachelor’s graduates, will you make? How much does the program cost? Usually, simple arithmetic can take the guesswork out of determining the financial feasibility of a master’s program.
Okay, so life isn’t ALL about money, right? Sometimes we follow paths based on fulfillment, and choosing career paths and the educational methods are no different. Sometimes, getting a master’s isn’t about promotions or money. Sometimes getting a master’s is about knowledge. In this case, it is difficult—if not impossible—to factor the pros and cons of furthering your education. After all, if your goal doesn’t involve making more money, then determining whether your program is worth the financial burden or not may be irrelevant. In a nutshell, it’s hard to put a value on knowledge. And some people seek knowledge at all costs. For example a lover of philosophy may decide to get a master’s just for the simple pleasure in it. What a great motivation. However, one must still keep in mind the financial and time constraints that getting a master’s degree entails. Can you reach your goal without stretching yourself too thin financially and time-wise? If you can, then go for it. And rest assured knowing that, no matter what your field, a master’s degree does almost always help financially.
Clearly, deciding whether or not to pursue a master’s degree is a personal decision influenced by many factors. Cost, future income potential, and career advancement all help determine whether or not obtaining a master’s degree is worthwhile. However, research has clearly shown that—in the long run—getting a master’s degree is almost always a wise financial bet. So, whether you are in it for economic gain or for the love of knowledge, getting a master’s degree is often worth the cost.