After graduating from college, many Americans face the difficult decision to continue their education or gain work experience. Some insist that considering the rising cost of tuition and insurmountable student loans, a master’s degree simply perpetuates indebtedness. However, many critics fail to consider the reality of stagnant real wages and distorted unemployment rates.
In September 2020, the U.S. unemployment rate stood at around 7.9%, according to the Bureau of Labor Statistics. The current high rate is due in part to the economic impact of the global coronavirus pandemic; Before the crisis hit the United States in March, it was 3.5%.As of 2019, the unemployment rate for graduates with a bachelor’s degree was 2.2% compared to 2.0% for master’s degree holders.
Also, the average weekly earnings for those with a bachelor’s degree were $ 1,248 versus $ 1,497 for those with a master’s degree, showing the value of a master’s program. Also, some fields, such as education and psychology, require master’s degrees and more, only for entry-level positions. After completing college, individuals should consider a number of factors when deciding to invest more in their education and pursue a master’s degree.
- Factors to consider when deciding to pursue a master’s degree are associated costs, job prospects, salary, debt, and the potential impact on savings and retirement.
- While some insist that a master’s degree simply perpetuates indebtedness due to rising tuition costs, they may not take into account the reality of stagnant real wages and distorted unemployment rates.
- In many cases, considering lifetime earnings and future job prospects, it is beneficial to continue education beyond a bachelor’s degree.
The case of a master’s degree
Factors to consider when deciding to pursue a master’s degree are associated costs, job prospects, salary, debt, and the potential impact on savings and retirement. From a financial perspective, the master’s degrees with the highest returns are nurse anesthesia, telecommunications engineering, and finance and economics.
According to a PayScale report for 2017, engineering schools are highly rated for return on investment (ROI). The average net ROI for engineering schools is $ 653,000, compared to less than $ 157,000 for liberal arts, religious or artistic schools.
In addition to choosing a field of study, students must decide between attending a public school, a private school, or an online program. According to the National Center for Education Statistics, for the academic year 2017-2018, it was estimated that tuition, fees, room and board for college students amounted to about $ 20,598 in state public institutions and $ 44,662 in private institutions non profit.
However, the income gap between equally ranked public and private schools is smaller. According to Lexington Law, a company that helps people get out of debt, during your lifetime you will earn about 10% more income if you attend a private college, enough to retire about three years earlier.
But despite the small difference in ROI, private universities often provide more prestigious academic and research opportunities. For example, most of the winners of the Nobel Prize in Economics have been associated with the University of Chicago and other private universities.
Recently, online degrees have become a viable alternative to traditional universities. Common misconceptions about online universities are that the programs are cheaper than physical school degrees and that they lack credibility. The average cost per credit in the state for an online program was $ 316 in 2019 compared to $ 311 per credit on a physical campus.
Also, since online universities and their traditional counterparts have relatively similar costs, they also have similar returns. Assuming that the online degree is obtained from an accredited university with an established brand and a traditional campus, it can be assumed that your results in the recruitment process will be similar if you obtain a master’s degree online instead of obtaining a degree from one. traditional institution.
The case of work experience
The main benefit of quitting a master’s program is saving money. The Finaid website has a cost projector calculator that is intended to help students and families determine how much school will cost. According to Finaid’s custom calculators, the cost for a two-year master’s program can range from $ 30,000 to $ 120,000.
In addition to avoiding tuition payments, joining the workforce gives people the opportunity to earn money.
The average salary for graduates with a bachelor’s degree is approximately $ 53,889 for the class of 2019, although this number can be significantly higher or lower depending on the major.
In addition to savings and salary, joining the workforce increases promotion opportunities and networking opportunities. Computer science and engineering students generally earn $ 76,986, while social studies earn $ 50,009.
Student loans continue to plague young Americans. For many, attending a bachelor’s or master’s degree program requires loans to cover the cost of tuition and living expenses. Currently, total student loan debt in the United States stands at $ 1,544.8 trillion.The College Board reports that among those who completed a bachelor’s degree in 2017-2018 with debt, the average amount of that debt was close to $ 29,000.
Since most undergraduate students are in considerable debt, many cannot even consider pursuing a master’s program. However, those who take the risk will find that the average indebtedness of a graduate student is $ 52,141.32.
The bottom line
Deciding whether to join the workforce or earn a master’s degree can be difficult. When choosing a master’s program, it’s important to consider job prospects, ROI, and tuition costs. Quantifying these factors can help people calculate a cost-benefit profile for a future master’s program or work experience.
In many cases, considering lifetime earnings and future job prospects, it is beneficial to continue education beyond a bachelor’s degree.