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Is a Graduate Degree Worth the Money?

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Advanced DegreeOne of the furious debates going on right now in the world of finance and money is the one over whether or not getting a college degree is “worth” it. And, of course, the debate only intensifies once you start talking about graduate and professional degrees.

The reason that this is such a debatable subject is due to the fact that different degrees offer different advantages. Not everyone with a Master’s degree or a professional degree (such as a law degree or medical degree) is going to earn the same amount because the salaries you see when you are done vary widely. Georgetown’s Center on Education and the Workforce estimates that the median salary with an advanced degree is $73,738. However, that doesn’t mean everyone with an advanced degree. (Indeed, half of those with advanced degrees will earn less.) The Center also points out that payoff from getting an advanced degree can mean as little as a 1% boost to your salary, or as much as 190%.

What is Your Graduate Degree Worth?

Before you decide to spring for a graduate degree, consider how much it is going to be worth when you are done. Some things to keep in mind include:

  • Wage difference between bachelor’s degree and the advanced degree: Some professions pay well with a bachelor’s degree. Someone with a petroleum engineering bachelor’s degree is already going to be making a good salary. Getting an advanced degree won’t bump up your salary very much, because it’s already higher. In some cases, the advanced degree doesn’t pay much because the job market is always weak, or because advancement is based on factors beyond your education level. You rarely need to get an advanced degree in broadcasting — it probably won’t affect your pay as much as just having a bachelor’s degree and doing a good job while gaining experience.
  • Demand for the job: It might sound like a good idea to follow your bliss and get an advanced degree in something you enjoy, but what if there isn’t much demand for the job? If there isn’t a lot of demand for your degree area, then you won’t make much money, and getting further into debt with an advanced degree might not be worth it.
  • Saturation in the market: Payscale.com lists the averaging starting salary for lawyers at $62,000. That’s not bad, but consider that you might pay upward of $80,000 for that law degree. The problem is that the market is saturated with lawyers. And that means your degree, though worth something, might not be worth as much as you thought. Get a realistic view of the market before you get your degree. An advanced degree in a field where there is demand, but little supply, can pay off in a big way.
  • Where you go: Sometimes, it’s just not worth it to pay a lot of money for a degree from a big-name school. If you can get an advanced degree for a lower price, thanks to scholarships, assistantships and going to a public university, you can get more bang for your buck.

In the end, only you can decide if an advanced degree is worth the cost. Make sure you weigh the pros and cons, and decide how much student debt you are willing to take on — and the salary you can realistically expect when you’re done — before taking the plunge.

(Photo: digitalkatie)

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14 Responses to “Is a Graduate Degree Worth the Money?”

  1. Jenna says:

    Surprised you didn’t mention employer paid programs, I think that’s a big factor for many people

    • cubiclegeoff says:

      I agree. If you’re employer pays most or a portion of a degree, it can really be worth it. And depending on the degree, there are other benefits to getting a post grad degree. I started my degree, and my first professor ended up leading me to my current job which is more secure and pays better than what I was in before, even before my degree was finished.

  2. Bryant says:

    I have been trying to figure this out too. I want to go back for my MBA, more for my own passion and interest, but it will certainly help me down the line. However, with most reputable programs asking $70k+!!, it’s a tough pill to swallow.

    • Strebkr says:

      There are plenty of smaller schools offering MBA programs at a fraction of that cost. They are still good programs and you can get hired at great companies. Do you really need the brand name MBA? That’s what you need to figure out.

  3. Kyle says:

    This is a good point. I don’t think you should get a graduate degree if it’s only for the bump in salary. You should want to learn more about your field and be interested in research – at least a little. Of course, a bump in salary is also important.

    In my field (Computer Science), if you’re looking for a job with a BS, you’d be looking at starting around $50k. With a Master’s degree, that figure jumps to $70-80k. Totally worth it, in my opinion.

  4. cvargo says:

    Company I work for will be paying 90% of my tuition for my graduate degree when I start next semester. No brainer for me

  5. Courtney says:

    Big difference between a graduate degree in the sciences and in the humanities. PhD programs in the sciences have full tuition + stipend + medical/dental. I made about $135K in the 5.5 years it took me to complete my degree.

    • Martha says:

      This is very true. However when I did a research project on the decision to get a PhD it turned out that it was not the most financially advantageous decision. (Preface this is as an engineer.) You were better off getting a masters from a 1-2 yr program and going into the work place than getting a PhD for your lifetime earning potential. The time you lose when you’re in grad school does not equal to the salary bump that you get when you graduate. In the end, the reason to get a PhD should be based on your career aspirations and not on an expected salary.

      • Steph says:

        I would have to say that the engineering PhD is about the only degree not monetarily worth the time & effort. When a BS in engineering makes about the same or more than an MS in almost any other hard science, it doesn’t make sense to get the advanced degree even with the stipend, paid tuition and “benefits” offered by the hard science advanced programs.

        I never understood why people with a BS in engineering joined my grad program. They could have gotten enough field experience in the 5-7 years it took to get the PhD to arrive at what they are now starting at, plus they had a HUGE drop in pay for those 5-7 years. So, they are starting WAY behind already and that’s not including any student loans they may have stupidly taken out to increase their standard of living while in grad school.

  6. Allison says:

    A good example of a low-paying job that requires a graduate degree: librarian.

    I make less than $30,000 per year. Granted, that’s on the low end of the typical librarian pay scale… but still. The median is in the $50K range.

  7. JW says:

    I am wondering how old I am going to be when I finally pay off my optometry school tuition! It is a four year doctorate and the average graduate ends up with over 160K in debt for a career that can have a starting salary as low as 70K in states that are very saturated (because it’s very hard to find full-time work). And it is actually very saturated in most desirable cities (maybe you can make lots of money if you want to move to the boonies!). It’s also frustrating when people automatically think optometrists and certain other graduate degrees make a ton of money because in reality we work so hard for the amount we get. It is rewarding to serve your fellow man, though. That is the point to get across – go for the extra degree so that you can obtain the education needed to help others! Life is not all about money.

  8. David says:

    Master’s? Worth it for me. I used what I learned every day and was able to jump industries from a dead-end job to one that’s worth 50% more, including bennies. Contrawise, I have fellow graduates unemployed or in internships a year or two out, and a coworker who is younger and with a BA but at the same place professionally as I. It really depends on if you know what you want it for and need it, but def not a sure bet. Do your homework first (so to speak)!

  9. RoJo says:

    You gotta remember that your career is a marathon and not a sprint. Even though the cost seems big now, over the course of your working life, the benefit of the degree will greatly out weigh the cost. Much the way money/wealth gives you freedom in your personal life, an advanced degree gives you similar freedom in your professional life. My advice would be to begin the Masters or PhD program of your choice before you have kids. Once they come, the time is much more difficult to find…


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