- 29 Sep 2023 14:54
#15288769
A lot of people are spending an additional 2 years, after 4 years in college, to get a Master's degree, hoping it will help them get a higher paying job.
But there is mounting evidence that a Master's degree may no longer be worth it (worth the cost, time, and effort, and debt), if one is hoping it will pay off financially.
A lot of this may have to do with oversaturation of the job market; a Master's degree does not really make an applicant stand out when there are so many other people with Master's degrees trying to get that job.
And part of this may having something to do with the popping of the so-called Education Bubble. More and more people "invested" in personal education, expecting it would pay off in the future, but now the society as a whole is coming to the realization that it may not have been worth it. It contributed to somewhat of an economic bubble, with an economy fueled by education debt that couldn't last.
Master's degrees today (after 2020) are as common as 4-year degrees were in the 1960s.
article:
"
More than 16 million people in the US -- about 8 percent of the population -- now have a master's, a 43 percent increase since 2002.
Is a master's degree worth it? For decades the answer was clear, but US government economists are increasingly concerned that students are now borrowing far too much.
For the first time, the share of money the government is lending to graduate students annually is on track to eclipse that of undergraduates, exceeding $39 billion, or 47% of federal loans. And it’s becoming clear that those advanced degrees don’t necessarily result in greater earnings, according to the Office of the Chief Economist at US Department of Education.
"There is generally very little correspondence between the amount students borrow to finance their advanced degrees and their labor market outcomes," economists Tomás Monarrez and Jordan Matsudaira wrote in a recent report. Earnings for those with graduate degrees remained high but stagnant over the last 20 years, "suggesting a potential decline in the net return to graduate credentials."
report here: U.S. Department of Education, Trends in Federal Student Loans for Graduate School, Office of the Chief Economist Tomás Monarrez and Jordan Matsudaira, August 2023
Grad students accounted for 21% of federal borrowers between 2021 and 2022, yet their debt totaled nearly half of the $83 billion issued by the Education Department.
Their bills tend to mount up because they can borrow up to the entire cost of attendance for school -- which can run $80,000 or more annually including housing and other living expenses -- while federal undergraduate loans are limited to borrowing about $30,000 over four years. Interest on Grad Plus loans also accrues during school, unlike some loans for undergraduates.
That's led graduate student borrowers to leave school with an average of $57,000 in debt compared to $27,000 for undergraduate borrowers, according to the National Center for Education Statistics, a trade group that surveys graduating students at more than 200 universities. For a doctoral degree in professional practice, such as medical or law school, the average is $176,000.
The differential between average starting salaries for bachelor’s and master’s degree graduates decreased to 22.5% in 2021 from 31.8% four years prior, according to the National Association of Colleges and Employers, a trade group surveyed graduating students at more than 200 universities.
"
Getting a Master's Degree May Not Pay Off With a Higher Salary, Janet Lorin. Bloomberg, September 29, 2023
In 1971, 37.2% of Master's degrees were in Education, followed by Business at 11.2% and Engineering at 7.1%.
By 2012, 25.4% of Master's degrees were in Business, 23.6% in Education, and 11.1% were in Health professions, trailing in third place. 5.5% in Public Administration and only 5.3% in Engineering.
(source: Master's degrees are as common now as bachelor's degrees were in the '60s, Libby Nelson, Vox, Feb 7, 2015 )
But there is mounting evidence that a Master's degree may no longer be worth it (worth the cost, time, and effort, and debt), if one is hoping it will pay off financially.
A lot of this may have to do with oversaturation of the job market; a Master's degree does not really make an applicant stand out when there are so many other people with Master's degrees trying to get that job.
And part of this may having something to do with the popping of the so-called Education Bubble. More and more people "invested" in personal education, expecting it would pay off in the future, but now the society as a whole is coming to the realization that it may not have been worth it. It contributed to somewhat of an economic bubble, with an economy fueled by education debt that couldn't last.
Master's degrees today (after 2020) are as common as 4-year degrees were in the 1960s.
article:
"
More than 16 million people in the US -- about 8 percent of the population -- now have a master's, a 43 percent increase since 2002.
Is a master's degree worth it? For decades the answer was clear, but US government economists are increasingly concerned that students are now borrowing far too much.
For the first time, the share of money the government is lending to graduate students annually is on track to eclipse that of undergraduates, exceeding $39 billion, or 47% of federal loans. And it’s becoming clear that those advanced degrees don’t necessarily result in greater earnings, according to the Office of the Chief Economist at US Department of Education.
"There is generally very little correspondence between the amount students borrow to finance their advanced degrees and their labor market outcomes," economists Tomás Monarrez and Jordan Matsudaira wrote in a recent report. Earnings for those with graduate degrees remained high but stagnant over the last 20 years, "suggesting a potential decline in the net return to graduate credentials."
report here: U.S. Department of Education, Trends in Federal Student Loans for Graduate School, Office of the Chief Economist Tomás Monarrez and Jordan Matsudaira, August 2023
Grad students accounted for 21% of federal borrowers between 2021 and 2022, yet their debt totaled nearly half of the $83 billion issued by the Education Department.
Their bills tend to mount up because they can borrow up to the entire cost of attendance for school -- which can run $80,000 or more annually including housing and other living expenses -- while federal undergraduate loans are limited to borrowing about $30,000 over four years. Interest on Grad Plus loans also accrues during school, unlike some loans for undergraduates.
That's led graduate student borrowers to leave school with an average of $57,000 in debt compared to $27,000 for undergraduate borrowers, according to the National Center for Education Statistics, a trade group that surveys graduating students at more than 200 universities. For a doctoral degree in professional practice, such as medical or law school, the average is $176,000.
The differential between average starting salaries for bachelor’s and master’s degree graduates decreased to 22.5% in 2021 from 31.8% four years prior, according to the National Association of Colleges and Employers, a trade group surveyed graduating students at more than 200 universities.
"
Getting a Master's Degree May Not Pay Off With a Higher Salary, Janet Lorin. Bloomberg, September 29, 2023
In 1971, 37.2% of Master's degrees were in Education, followed by Business at 11.2% and Engineering at 7.1%.
By 2012, 25.4% of Master's degrees were in Business, 23.6% in Education, and 11.1% were in Health professions, trailing in third place. 5.5% in Public Administration and only 5.3% in Engineering.
(source: Master's degrees are as common now as bachelor's degrees were in the '60s, Libby Nelson, Vox, Feb 7, 2015 )
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