Are Masters Degree Programs Worth the Risk?

Harvard, Princeton, and Virginia Tech are not common talk at dinner tables all across the country. Going to college is becoming the norm as more people than ever before pour in and out of collegiate institutions. Even online masters degree programs have begun to draw thousands as more and more jobs require multiple degrees. The recession forced many back into school as they have found that getting a job was more difficult than they had thought it would be. Although enrollment in graduate school has dipped a little over the last year, many feel that graduate education is a great contributor to prosperity.

The return on investment simply is not there for many degrees. Despite the trumpeting of the necessity for education by politicians, the fact is that a college education’s cost grew faster than both inflation and incomes over the past two decades Certain school names retain value, but for far too many, the cost of an education outstrips the ability of student repayment. Shopping for an education is analogous to shopping for a car. Identify the anticipated usage and evaluate the utility versus price in light of that analysis.

Even though colleges and graduate schools trumpet the increased earnings of college graduates over those with high school diplomas, the return on investment analysis is where the truth lies. College graduate make more than high school graduates in general. However, after paying for their student loans, are college students better off?
The answer appears to be “not really” unless their degree is in specific high demand fields. Non-college graduates with certain technical or skilled labor training like welding may be better off than college graduates.

The average welder makes about $17.04 an hour, which is slightly above the mean salary in many states. However, the average welder won’t have tens of thousands of dollars of college loans to repay. Specialty welders make as much as $26.00 an hour and don’t have college loans. It states in the Economics Policy Institute (EPI) that “$16.81 per hour, which translates into an annual income of roughly $35,000 for a full-time, full-year worker. Average hourly wages for young female graduates remain substantially less (13.9 percent) than those of young male graduates.”  After repaying college loans, the graduate fares poorly compared to the welder.

Those with advanced degrees fare a little better, but in the final analysis, paying back the degree is onerous. After four years, a student ends up owing between $140,000 and $80,000 depending upon whether the college is public or private. Add graduate school costs to the total and the debt increases by another $20,000 and $30,000 for each additional year of schooling. According to US News & World Reports which cites the National Center for Education Statistics, “the difference between tuition and the net cost less financial aid at public two-year colleges is not that significant, relatively speaking: roughly a few thousand dollars. But looking at private nonprofit four-year schools, that figure jumps dramatically, to almost $20,000. The average annual tuition (plus expenses) at a private nonprofit four-year college is about $35,000. Click around below to see how the numbers stack up. “

The conclusion that most would draw is that anyone contemplating an advanced degree needs to be sure that it will add to their salary and not their debt burden.  This requires careful analysis of the degree contemplated, the method of financing it and what the goals for that degree are.