Is Graduate School Worth the Cost?

Here's a piece from Yahoo that asks if graduate school is worth the cost. The answer is -- maybe. Their key thoughts:

Graduate degrees are necessary for some fields, raise earnings on average, and can lead to more enriching careers -- but choose carefully. Compared to college, there's less financial aid available; tuition is higher (averaging over $20,000 for master's programs at public institutions); parents are less likely to foot the bill; and, as an independent adult, you give up income from working in order to attend.

Less than a fifth of all graduate and professional students receive scholarships, fellowships, or assistantships. And some graduate degrees barely increase your earning potential -- and may even lower it.

The bottom line is, besides the out-of-pocket and opportunity costs, graduate school is meant to prepare you for a specific field. If you end up working outside that field, there goes a lot of time and money. That's why I think anyone who enters a graduate program should first spend at least a year getting closely related work experience.

In other words, look at it as an investment. What will it cost you (in tuition, etc. as well as in lost wages) and what will you get out of it (how much more will you earn)? Then you can make a financial decision based on the facts.

Of course, there may be other reasons to proceed even if it's not a good financial deal -- such as allowing you to move from a field you hate to one you like. In this case, you may take a financial hit, but eventually be happier overall. For an example of this, see "From six figures to student loans" from Money magazine.

The Yahoo piece then details various graduate degrees (business, medical, etc.) and gives some thoughts on whether or not they are worth the cost. Here are some that aren't:

From a dollars-and-cents perspective, the worst values in graduate education are those in which tuition is high and average earnings are low or unpredictable: fine arts, creative writing, and cooking come to mind. Popular and exclusive graduate programs in creative and competitive fields can charge high prices because they promise access to an inner circle -- a crucial edge in a line of work that's always going to be a bit of a gamble.

And they end with this good advice:

It's important to remember that universities create and market new graduate programs to serve their own needs as much as to add value for prospective students. So anyone who's smart enough to get an advanced degree should be smart enough to limit their expenses to a minimum and choose a program that will widen their options without saddling them with debt.

As I've noted before, there are some things you can do to maximize your overall college investment. If you take these steps, it's likely that your investment of time and money will pay off big. This is what happened for me and if done correctly, the same opportunity is still out there today.

Comments

[JB @ GetRichOrDieTrying]

I researched this quite a bit - after I started working on a MBA. I came up with the same results as you - maybe. However, it's a lot of time, a lot of effort, and a lot of misery for a maybe. I decided to forgo the graduate degree and focus on working hard at my current job. Especially at my company - they don't seem to value MBA's very much. Who knows what could happen though? I just try to the best decision I can with the information I have available.

[Dan]

Depends on the industry you work in, or where you live. I live and work in Washington DC. This city has a large number of people with graduate degrees competing for a small number of jobs in niche fields. And they're mostly government jobs, so the pay isn't all that impressive. That said, people are in niche fields for a reason, and the competition is too fierce to get ahead without a grad degree.

[Jo]

I agree with Dan. It depends on your field. In ministry, if you want to stay in the parish level you are fine with a BA or even less. But even there more and more churches are requiring advanced degrees. If you want to work in campus ministry or be a professor, definitely need a masters or higher. Some make it without a degree, but that is the exception. I don't expect to make much more money once I get my degree, (although I will ask for it, and/or my boss will probably just give me a raise once I've gotten my masters) but I do plan on eventually going for a doctorate and working at a larger scale than I am now. It's all so dependant on where you are, and where you want to go...

[kitty]

I am surprised that she mentioned that only 5th of graduate students get fellowships and assistantships. I thought teaching assistantships are relatively easy to get, at least in big schools and in science/engineering. Is it that some students are simply unaware of it or aren't considering it when choosing a university?

Graduate assistantships are actually very difficult to get and you will usually be informed of your eligibility when you are accepted to a program. They are more common in elite schools where ticket cost is upward of $40,000. Even in higher eduction America is shifting to a system where the student must incur most or all of the cost of their education.