Liz Pulliam
Weston provided these words of wisdom regarding the value of
graduate degrees on the New York Times'
Room for Debate blog last week. Recession or no
recession, it looks like Liz agrees with me that you should consider the return
on investment before impulsively deciding to go back to school.
“Graduate school has traditionally been a great place
to wait out recessions while honing your skills for a better job. But
sometimes, the payoff doesn’t justify the cost.
In some fields, such as business or engineering, a
graduate degree typically boosted income by more than enough to justify the
cost. In others — the liberal arts and social sciences, in particular —
master’s degrees didn’t appear to produce much if any earnings advantage.
Advanced education has many other, non-economic
benefits, of course. But if you’re borrowing to pay for your schooling — as 60
percent of graduate students do, accumulating an average $37,000 in student
loan debt, according to the 2003-2004 National Postsecondary Student Aid Study
— you want to make sure you can pay those student loan bills when they come due.
Otherwise, you could quite literally spend the rest
of your life scraping to pay off your debt. Student loans typically can’t be
erased in bankruptcy court, and student lenders have extraordinary powers to
pursue borrowers, up to and including taking a portion of their Social Security
retirement checks.
Those in the worst shape are often the ones who took
on private student loans, which have fewer consumer protections than federal
student loans and which come with higher, variable rates. The prevalence of so
many strapped borrowers is why I recommend students borrow no more for their
educations, in total, than they expect to make the first year out of school.
This rule of thumb won’t work for everyone — heaven
knows, you may be the rare literature M.A. who writes a best-selling novel and
pays off her debt with one check — but it’s a good starting point for anyone
considering strapping herself to more education bills.”
I’m so glad that Liz has done the research to back up
this point of view. Too many of us feel that a master’s degree is
essential, when really it’s a nice-to-have that shouldn’t necessarily be your
priority at this point in time.
Doing a bit of cost or risk/reward analysis is never a bad idea for anything, and grad degrees are no exception.
In this case, the school and type of degree will also have a HUGE impact on the above equations--which I use the term loosely. Case in point, an MBA from DePaul and an MBA from Kellogg at Northwestern are the same degree, but carry two totally different price tags snd admissions requirements (Kellogg applicants have an average of 52 months experience for the part-time program).
For those LA majors, the case is even more convoluted. Should I pursue an MBA or go for a much cheaper IMC degree?
In a personal example, I asked top brass at my firm what they thought. While advice from those who have experience is always a great start to making a decision, it should never be the only research you do.
Posted by: Matt Koppelman | July 26, 2009 at 08:16 PM
@Matt: So what did the top brass at your firm say?
Posted by: Alexandra Levit | August 03, 2009 at 03:13 PM
I recently came accross your blog and have been reading along. I thought I would leave my first comment. I dont know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.
Alena
http://grantsforeducation.info
Posted by: Alena | December 19, 2009 at 08:18 AM
@Alena: Thanks so much!
Posted by: Alexandra Levit | December 26, 2009 at 02:39 AM