You’ve probably heard the much-touted justification that people with advanced degrees have higher lifetime earnings than those with only an undergraduate education. Some professions, like law or medicine, absolutely require an advanced degree. With others, however, it’s debatable whether or not the loan debt is worth it.
With the amount of student loan debt in the United States inching past $1.5 trillion, and 40% of those loans used to fund graduate degrees, there’s good reason to think twice about borrowing money in pursuit of more education. Here’s what you should consider before going into debt to pursue a master’s degree.
When Graduate School May Be Advantageous
Pursuing the life of the mind, gaining a deeper understanding of your field, and the prestige of more letters at the end of your name all hold a certain appeal. Beyond these motivations, there are a number of scenarios in which earning a master’s degree is a wise investment. Here are some instances where pursuing a graduate degree is a good idea.
1. Your Field Requires It
In some careers, you simply cannot succeed without an advanced degree. Most law firms won’t let you practice as a lawyer without a Juris Doctor (JD) degree, and you’ll have a mighty tough time making a living as a doctor without a medical degree.
These are two of the most obvious examples, but if you’re interested in entering a specialized, fast-growing field like audiology or genetics, you might be surprised to learn you must have a graduate degree. If this is the case for your ideal profession, think about whether you’re committed enough to this line of work to get the advanced degree that’s required to succeed.
2. It Significantly Influences Your Salary Prospects
Although the data says an advanced degree does, in the aggregate, bring higher pay, this salary bump is not evenly distributed across all graduate degrees. This is important to understand before you take on hefty student loan debt, only to realize you won’t be earning any more money than you did before you got your fancy new degree.
However, if your salary prospects will markedly increase with a master’s degree to your name, then it might be worth it. For example, a report by Georgetown University found that median earnings for someone with an undergraduate degree in biology and life sciences hover around $50,000 per year, while the median earnings for a graduate degree-holder in the same subject shot up to $85,000 per year.
3. It Promises High Job Placement Rates
If the graduate degree you’re interested in comes with a much higher average job placement rate than for applicants who hold only a bachelor’s degree, it might be worth the cost and effort. Nursing, engineering, and data science all come to mind, but not all degrees — or graduate degree programs — are created equal.
Dig into the placement rates for both the field and your prospective school before you commit. If you have a question about this often-self-reported data or want to talk to a graduate of the program, reach out to the school. Any institution with a program worth enrolling in shouldn’t have anything to hide.
4. You’ll Have Help Paying for It
When it comes to employer perks, it’s hard to find a better education benefit than tuition reimbursement. Even if this benefit doesn’t cover 100% of your tuition or other associated costs, discounted tuition or partial reimbursement can be the deciding factor in whether or not you enroll in an advanced-degree program. There are also a surprising number of jobs that qualify for student loan repayment assistance or forgiveness, including many government jobs, public service jobs, and positions in various medical fields.
If your employer doesn’t offer an education benefit, explore other options for free or reduced tuition so you don’t graduate with crushing student loan debt. Some schools or graduate programs offer scholarships, grants, or fellowships. A scholarship, which is much less common at the graduate level, usually means the money is yours free and clear, as long as you use it to cover the cost of education or related costs, such as books. Scholarships are more common at the undergraduate level and are often merit-based.
A grant is similar to a scholarship but usually has more stringent or specialized requirements, either in order to qualify or by stipulating what the recipient does during or upon completion of the degree. Grants are often need-based. Grants can also come from organizations or companies, like the American Chemical Society, which has several grants and awards specifically for graduate students.
Fellowships are scholarships that are most often available to those who have already earned a degree in a field and are pursuing a more advanced degree. Fellowships are highly competitive and are most commonly awarded to Ph.D. students, usually for conducting research in a specific area.
There are also graduate associateships or teaching associateships. These are similar to fellowships and are commonly awarded to academically qualified graduate students. Associateships cover the cost of graduate studies in exchange for teaching entry-level courses or providing support for faculty as teaching assistant. Participants often perform duties such as preparing course materials, administering exams, or calculating grades.
Finally, if you work at a university that offers graduate degrees, you may be eligible for free or reduced tuition as part of your employee benefits, provided you’re accepted to the program or area of study. Ask your human resources department what options are available to employees.
When Graduate School May Be Disadvantageous
Although some graduate degrees — especially those that are part-time or online — can be completed while working full-time, others all but require you quit any full-time employment for the duration of the program. If this is the path you’re considering, think about what taking one to three years off from the workforce would mean to your career trajectory. In addition to the monetary cost of lost salary and retirement contributions, you also risk missing out on the latest industry trends and networking opportunities.
It’s also worth noting that while a graduate degree is more school, it is not simply an extension of college life. If you find yourself missing the crazy parties every weekend or midnight snack runs with friends from your dorm, know that graduate school won’t replicate or extend that period of your life.
One of the realities of graduate school that surprised me the most was how lonely it could feel. I spent many hours buried in the special collections library doing the solitary work of a scholar rather than in all-night caffeine-fueled cram sessions with a cohort of friends. Graduate school was much more like a job than the undergrad experience.
Beyond these considerations, here are some instances in which graduate school might be disadvantageous to your career or salary prospects.
1. You Gain No Real-World Experience
Many recent college graduates believe graduate school will increase their career prospects, and this could well be the case. However, you might be better off getting an entry-level job in your chosen field and working for a while before you earn a master’s degree. A couple years of real-world experience combined with an advanced degree may position you far better than an advanced degree with no full-time work experience would.
In addition to helping you stand out to employers, work experience can also benefit you. If you work for a few years after college before jumping back into school, you’ll gain firsthand knowledge of the problems and situations that occur in the field, not just read about them in a book or case study.
Furthermore, if you’re considering a graduate degree in a particular subject and you work for a few years in the field only to discover you hate it, you’ll save yourself thousands of dollars and years of agony. Conversely, if working for a few years confirms that you want a master’s degree in your field and shows you what doors the degree can unlock for you, you’ll be all the more motivated to study hard and excel.
2. You Could Invest in Your Career Instead
While earning a master’s degree can supercharge your career, there are other ways to advance your prospects at your job or in your field. Instead of spending thousands of dollars and several years taking classes and doing homework, think about all the other ways you could invest in your career instead. Do any of them make more sense for you than an advanced degree?
For example, is there a license or certificate that you could pursue while working full-time? Perhaps there are skills your supervisor can identify that you need to develop — such as public speaking, employee mentoring, or working to bring in new business — that would benefit your career more than another degree. Developing specific desirable job skills or gaining certifications — even if doing so requires paid classes or coaching — is much less expensive than obtaining a graduate degree.
3. Your Field Doesn’t Require It
Let’s face it: There are some fields where a master’s degree simply does not make sense. If you’re in a job where it’s not required and you still want to pursue graduate school, it’s time for a reality check. While you’re in school earning an expensive master’s degree, your peers are out gaining job experience and making connections.
Look at who is getting promoted or landing the most desirable jobs in your field. Do they have an advanced degree, or is their level of education largely irrelevant? This is a good indicator of whether a graduate degree is important in your field. Many employers simply don’t factor it heavily into their decisions, especially in more generalized fields of work.
There are even instances in which a candidate with a graduate degree might look too expensive to a manager hiring for a role or industry where a graduate degree isn’t required, which means you can be disqualified before you even have the chance to interview. In some fields, there is such a thing as too much education.
4. A Better Job or Higher Salary Isn’t Guaranteed
If the reason you want to earn a master’s degree is because you think it’s the ticket to a higher salary, make sure that’s true for your industry. Just like a college degree’s return on investment can vary significantly from major to major, so can a graduate degree’s. While there are some jobs or industries where those extra letters behind your name can increase your pay significantly, there are others in which all that education doesn’t mean that much more money.
The value placed on higher education may also vary from state to state or regionally within the same field. Research from the National Council on Teacher Quality, for example, found that increases in compensation for teachers with master’s degrees vary widely, and at least 11 school districts they surveyed did not offer any additional compensation for teachers with advanced degrees. If what you want out of another degree is more earning potential, but a higher salary isn’t guaranteed, it could be time to reconsider.
Other Questions to Ask Yourself
There are additional factors to consider when deciding whether to pursue a master’s degree. It’s important to answer these questions carefully before you sign up — or borrow money — to go back to school.
Why Do You Want to Go to Graduate School?
Some people go to graduate school because they don’t really know what to do with themselves after finishing their bachelor’s degree. Others think the only way to excel in their profession is through more school. Mid-career professionals might find themselves reaching the limit of job prospects available to them without an advanced degree.
Before you decide to enroll in graduate school, make sure you understand the real reason you want to earn a master’s degree. With thousands of dollars hanging in the balance, it’s important to make your choice with a clear head. You can do this by drawing up a pros-and-cons list, interviewing people in your profession who have earned master’s degrees, and doing a bit of research on the job and salary prospects of undergraduate and graduate degree-holders in your field.
How Much Money Will You Need to Borrow?
Student loans are not necessarily the death knell to your personal finance prospects that some experts make them out to be. Believe it or not, it is possible to borrow money for school and then pay it off at a reasonable rate, while still saving for retirement and pursuing other financial goals.
However, no one should take out tens or hundreds of thousands of dollars in loans without carefully weighing the costs and benefits of doing so. Before you decide to borrow money for graduate school, educate yourself on the types of loans available to you, such as federal and private, subsidized and unsubsidized, and PLUS loans. Also explore the other ways people finance all or part of their graduate degree, including grants, fellowships, and research and teaching assistantships.
Finally, if you’re currently working, explore whether your employer will pay for part or all of your tuition, and make sure you understand how enrolling in the degree program with your employer’s support will affect your future options. You may be required to stay at that organization for a certain amount of time after they provide you with tuition reimbursement, or else you may be required to pay it back.
Are You Considering a For-Profit University?
Most universities in the United States are structured as nonprofit organizations, and they must use the money they receive from tuition, the government, and alumni and donors to provide scholarships, pay faculty and staff, and fund other university operating expenses. By contrast, a for-profit university is owned by a company, which is usually publicly traded and has shareholders or an executive board. It is interested in making a profit from the business of educating people.
If you’re considering a for-profit university, you may want to think twice. Since 2014, more than 1,200 colleges have closed in the United States, and the overwhelming majority of those were run by for-profit enterprises. Nearly 40% of for-profit colleges in the U.S. have closed since 2010, including highly advertised schools such as ITT Technical Institutes.
When these for-profit schools close, go bankrupt, or otherwise shutter, their students are left with class credits that are often not transferable to another institution, along with thousands of dollars in debt they still must repay.
Can You Do an Online Program or Take Night Classes?
Online master’s programs have grown in popularity because of the flexibility they offer, often allowing students to continue to work full time. Earning your degree may take longer, but you’ll be able to earn a full-time salary while doing so. Others programs, sometimes called “accelerated degree programs,” can be completed in as little as one year depending on how many courses you enroll in each semester.
Online programs are just what they sound like: Classes and lectures are all online, usually accessed through a secure portal, where students view their syllabus, grades, class discussions, and other course materials. Classes are often self-paced, with weekly or biweekly deadlines for turning in work and taking quizzes and tests. Some require students to meet in person or take exams at a central location, but many allow for the entire course to be completed online and in a relatively self-paced manner.
Earning an online master’s degree this way might also be less expensive. According to a December 2018 report from the Urban Institute, prices for online-only master’s degrees have risen slower than prices for in-person programs, presumably in part because the infrastructure of a physical campus is not necessary.
Is It a Well-Recognized Degree?
Even reputable not-for-profit universities can offer master’s degrees that are unusual, brand-new, or in subjects that previously didn’t exist. From 1995 to 2017, the number of fields of masters studies shot up from 289 subjects to 514. Some of these new fields reflect the changing times — for example, data analytics professionals are more in demand than they were decades years ago — but some of these fields are so specialized you may be in danger of pigeonholing yourself or earning a degree no one has ever heard of.
Why do universities offer these unusual degrees? Attracting master’s degree students can be profitable for an institution. They generally don’t require student infrastructure like dorms and dining halls, which can be costly to construct and maintain, and these students are eligible for larger loans than undergraduate students, which means universities can charge them more for a graduate degree. Government funding for colleges and universities has decreased markedly in the past 10 years, and as a result, these institutions are exploring other ways to generate operating revenue.
Before throwing yourself headlong into a master’s program, it’s worth exploring whether the degree you’re considering is being put to use in the real world. Ask others who are working in your intended field — the higher up the food chain you can access, the better — about what degrees they pursued. Alternatively, you can browse the LinkedIn profiles of these same people to see if they list their educational background.
Odds are, you’ll see patterns begin to emerge in the kinds of degrees successful role models obtained — if they don’t, that may be telling too. Old standbys like MBAs or master’s degrees in accounting, computer science, or education are fairly commonplace among high-level professionals who have advanced deeply in those fields. If you can’t find any examples of other successful people who have studied what you’re considering studying, that may be a red flag.
Whether you’re going straight from college graduation to a master’s orientation or starting a program after decades in the workforce, the rules are the same: Do your research, make sure you understand how much the venture will cost you — both in dollars and in years — and enter into the program knowing exactly what you’re getting yourself into and what you can expect to get out of it.
Have you thought about getting a graduate degree? What are the pros and cons you’re weighing?