Seeking out more education may feel like a promising option for gaining skills and increasing job opportunities, but prospective students must first determine whether graduate school is worth the cost.
Much federal and legislative attention has historically been paid to the cost of an undergraduate education. But total tuition for some two-year, full-time graduate programs can cost more than $100,000, and doctoral or professional programs can cost even more.
To afford tuition and living expenses, students must often take on debt. Loans issued to graduate students account for 40% of federal student loans issued each year. These borrowers are subject to practically no limits on borrowing and receive fewer informational resources, according to Ben Miller, author of a 2020 Center for American Progress report on graduate school debt.
Prospective graduate school students may therefore struggle to make smart financial decisions about the best program in which to enroll.
“It’s a complete black hole of information,” Miller says. “There’s not really great centralized information on pricing, we don’t know anything about graduation rates, net price paid, breakdowns on default rates or repayment rates at the institutional level for graduate borrowers.”
Weigh Potential Earnings vs. Graduate School Debt
It’s true that, on average, individuals with a graduate degree earn more than those with only a bachelor’s degree.
The median weekly earnings for full-time, year-round workers holding bachelor’s degrees was $1,305 in 2020, according to U.S. Bureau of Labor Statistics data. With a master’s degree, median weekly earnings for full-time employees jumped to $1,545. With a doctoral degree, median weekly earnings were $1,885.
But the wide variety in cost and debt by graduate program complicates attempts to determine an advanced degree’s worth, experts say.
“Even in cases where graduate school is a requirement for a particular career, it may not provide you with the financial return on investment you hope,” Kendra Millay, academic advising team leader and law school admissions counselor at IvyWise, an education consulting company, wrote in an email.
She adds: “It is important to research specific fields to determine how saturated that particular job market is and understand what type of salary you can expect years down the road. From there, a student needs to do some soul searching and make that very personal decision for themselves; you work for a long time, so you should have the career that makes you happy.”
Graduate school might not be worth the cost for some students in the case of education or social work master’s degrees, for example: According to the CAP report, a master’s in social work has a median debt of $115,000. But average earnings for social workers were just $51,760 in 2020.
Trends in borrowing at the graduate level continue to paint a bleak picture: While undergraduate borrowing declined from 2010-2011 to 2017-2018, per Miller’s analysis of federal loans, graduate student loan debt grew during that period.
Prospective graduate students should also be aware that the amount typically borrowed can vary by institution type. In 2015-16, student loan borrowers who graduated with a master’s degree had on average $54,500 of debt from attending public schools versus $71,900 of debt for those who attended private nonprofit institutions, according to the National Center for Education Statistics.
Borrowers who graduated with a research doctorate left with an average of $92,200 in debt from attending public schools and an average of $94,100 from attending private nonprofit institutions, NCES found.
For graduates with professional doctorate degrees, those numbers jumped into the six figures: Students at public schools graduated with an average of $142,600 in debt, and those at private nonprofit institutions graduated with an average of $221,800 in debt. Professional degrees in this case include fields like dentistry, law and medicine. These fields typically have high six-figure salaries, which may make the debt and time spent in graduate school worth the cost for some students.
These averages from NCES do not include students who did not take out any student loans, but do include undergraduate loans that borrowers may have in addition to their graduate debt.
Undergraduate students loans will go into deferment while a student is enrolled in graduate school. But experts recommend still making payments while in school, if possible, to decrease the principal.
“When you do have to start making payments again, the interest rate you are being charged is on a smaller chunk of principal and therefore lower,” says Katie Burns, academic advisor and college admissions counselor at IvyWise.
Consider Financial Aid and Job Training Options
Despite the risk of borrowing to pay for graduate school, experts say a graduate education can still make good financial sense.
“Grad school can be worth it,” says Jason Wingard, president of Temple University in Pennsylvania. “It depends on the discipline you’re choosing and the curriculum of instruction.”
Students should consider the financial aid available to them before choosing to enroll in a graduate program. But Wingard warns the options may be increasingly limited because of the COVID-19 crisis.
The pandemic has put financial pressure on colleges and universities, Wingard wrote in an email, noting that “the revenue side has been unstable due to unstable and unpredictable enrollment, but the expense side has continued to rise due to faculty salaries and real estate holdings.”
Consequently, “financial aid will be negatively affected in the future and students will be forced to find alternative methods of financing their education,” he wrote.
To relieve costs and avoid debt, students can take advantage of free money for graduate school like scholarships and grants, academic fellowships and tuition assistance programs through their employers. Select master’s and doctoral programs are fully funded, meaning students receive a 100% tuition waiver and a stipend.
Other ways to make graduate school more affordable include getting a job at a college that offers tuition remission or becoming a resident assistant to cover housing fees, Burns says.
All of these options may help tip the scales to make graduate school worth the cost, experts note.
Prospective students may also want to consider online graduate degrees, which can be costly depending on the program but typically offer part-time options to those who are also working. Coursera, for example, is an online learning platform that offers online graduate degrees in fields like computer science, engineering, business, data science and public health.
“Costs vary for different types of degrees, schools, program lengths, and whether you’re looking at an on-campus or online program,” Dil Sidhu, former chief content officer at Coursera, wrote in an email. “If you’re thinking about applying to grad school, you should have a clear idea of how much a degree program will cost before you apply and whether that is something you can afford — or afford to finance through loans.”
“Also, be sure to check with your employer on any tuition benefits they may offer,” says Sidhu, who’s now the senior adviser for strategic partnerships at edX, another online learning platform.
Students who do not work full time while attending graduate school must also consider the lost earnings during the years they are enrolled, experts say.
“I have observed that Generation Z students feel a lot more pressure to add degrees, credentials and flair to their resumes than my millennial peers ever did,” Millay wrote. “Indeed, the ‘master’s is the new bachelor’s’ expression was less prevalent fifteen years ago. Since graduate programs are often niched and specialized, students should resist the urge to attend graduate school as a way to put off their job search and their entering ‘the real world.'”
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Update 03/29/22: This article has been updated with new information.