--Debate-- What Is a Master’s Degree Worth? The New York Times. Week of 20090726

June 30, 2009, 7:30 pm

What Is a Master’s Degree Worth?

By The Editors

(Credit: Chip East/Reuters)

Room for Debate recently published two forums on the burdens of student loans, and heard from a lot of former students, parents, professors and others who shared personal horror stories, blunt advice and critical observations about higher education.

A number of economists and education researchers say that the student debt problem, while real, has been overblown by the press and loan-forgiveness advocates, and that most students do not graduate with too much debt.

Resources

• Will Higher Education Be the Next Bubble to Burst?
• A Lifetime of Student Debt? Not Likely
• Is a College Degree Worthless?
• The Great College Hoax

But the debate presents difficult questions for young people, who face the most difficult economy since the Great Depression. Many have decided to go to graduate school, to wait out the storm. Several commenters on our forums even said they had no choice but to seek a master’s degree (and incur more debt), arguing that a B.A. today is the equivalent of having a high school diploma 20 years ago and more employers require a higher degree.

How do students know if an M.A. is worth it or not? What degrees might be worth getting, and which are not? How does a student weigh the risks and benefits of taking that intermediate step in higher education?

• Mark C. Taylor, Columbia University professor
• Stephen Joel Trachtenberg, former university president
• Liz Pulliam Weston, personal finance columnist
• Richard Vedder, Ohio University economist

The Education Bubble

Mark C. Taylor, the chairman of the religion department at Columbia University, is the author, most recently, of the forthcoming “Field Notes From Elsewhere: Reflections on Dying and Living.”

The next bubble to burst will be the education bubble. Make no mistake about it, education is big business and, like other big businesses, it is in big trouble. What people outside the education bubble don’t realize and people inside won’t admit is that many colleges and universities are in the same position that major banks and financial institutions are: their assets (endowments down 30-40 percent this year) are plummeting, their liabilities (debts) are growing, most of their costs are fixed and rising, and their income (return on investments, support from government and private donations, etc.) is falling.

Colleges are on the prowl for new sources of income. And one place they invariably turn is to new customers, i.e., students.

This is hardly a prescription for financial success. Faced with this situation, colleges and universities are on the prowl for new sources of income. And one place they invariably turn is to new customers, i.e., students.

During times of financial stress, people become vulnerable and understandably seek to improve their situation in any way they can. For many, more education seems to be the solution. When the economy goes down, applications to graduate programs go up.

As a lifelong educator, I believe more education is always a good thing, but buyers must beware. The debt crisis is not limited to governments and universities but extends to students and their families. Far too many students come out of college with substantial debts that plague them for years.

Read more…

And now the economy makes matters worse. Only 19 percent of the class of 2009 had jobs at graduation. Furthermore, many recent graduates who are young professionals and had been working for a few years have been fired. They find themselves surfing the web looking for jobs, all while worrying about health benefits and repaying their student loans.

This situation has many young people asking whether it makes sense to go back to school to pick up a master’s degree. There is no easy answer to this question and every case is different. When facing this decision, it is important to consider exactly what you need and how the degree will help you.

Some graduate degree programs can be very helpful for certain careers but many are not. And, remember, what is most interesting is not always most practical. Be sure you consider your motives and goals carefully. Do not simply assume that another degree after your name is going to open doors.

I have had too many students over the years who have gotten masters and even doctorates find themselves in debt big time, unemployed and forced to start all over in their mid-30s. If you do find a program that will enhance your prospects for a job and better life, then before your enroll, you need to figure out how you are going to pay for it and, if you must borrow more money, whether you can really afford to take on additional debt. You are going to have to do this by yourself because you cannot rely on people with vested interests in increasing enrollments to give you reliable advice.

One of the dirty secrets of many research universities is that they treat master’s students as cash cows that fund other activities. To make matters worse, with many faculty members uninterested in teaching, students cannot assume they will get what they are paying for.

Bottom line — and much of this is about the bottom line — consider your needs carefully, research your options thoroughly, don’t believe everything you read or hear and invest your time and money prudently.

The Value of an M.A.

Stephen Joel Trachtenberg is president emeritus and professor of public services at the George Washington University. He is also chairman of the Higher Education Practice at Korn Ferry International.

The M.A. degree is neither fish nor fowl nor good red meat. I had a classmate at Columbia who remained on after receiving his B.A. degree to earn an M.A. degree on a fellowship while waiting for his fiancé to graduate from Barnard. Another classmate who started a Ph.D. program was informed after a year that he had no real promise but if he went away quietly they would give him a booby-prize: the M.A. He became an M.D.

What’s so bad about reading a lot of French literature at someone else’s expense?

Does earning an M.A. (distinguishable from an M.B.A. or other professional degree) make any sense from a cost-benefit point of view? It does allow one to upgrade one’s alma mater. If you originally matriculated at a college you are vaguely uneasy about, taking an M.A. at a more elite institution allows you to kick down and kiss up, henceforth letting you tell people you “went to school” in New Haven. And it does, of course, ornament a resume indicating academic sitzfleisch — the ability to keep your behind in a chair in a diligent manner. A “B” undergraduate can become an “A” graduate student.

The M.A. permits someone who has a generic B.A. degree in a field she didn’t much care about to change direction, to add a line to her curriculum vitae that says she has a documented competency. M.A.’s also allow their owners to check the right box on corporate personnel forms and similar documents used by the armed services, N.G.O.’s, schools and public agencies that like their civil servants credentialed.

Read more…

Earning an M.A. degree can be fun; it can provide knowledge; and can stretch the imagination. A cynic might conclude that the M.A. degree is the stepchild of the university community, is increasingly a commodity offered by universities in order to earn tuition dollars devoted to the Ph.D. programs. But in the marketplace, it adds to one’s personal narrative. It makes one more interesting.

Degree inflation increasingly obliges more degrees to compensate for the devaluation of earlier degrees. Jobs that once were filled by high school graduates and later by college graduates today often require a master’s degree. This is largely optical, but one deals with the world he or she lives in. Still, just as the double and triple undergraduate major is a form of gilding the lily, a form of product enhancement, meant to seduce the hiring partner or the human resources director, the growing interest in the M.A. reveals the inadequacy of the baccalaureate.

In a bad job market does it make sense for students to seek a safe harbor and earn a master’s degree? Absolutely: if they can afford it; if the debt from their previous academic work is not too great; if someone else is paying; if they seek to reinvent themselves. If, if …

Universities are, after all, wonderful, magical places, and learning something new is the greatest of pleasures. My friend married his fiancé, never used his M.A. degree in any professional way but had the satisfaction and joy of having read a great deal of French literature at somebody else’s expense. What is so bad about that?

Degrees That Don’t Pay Off

Liz Pulliam Weston is the author of “Easy Money,” “Your Credit Score” and “Deal with Your Debt.” She is a personal finance columnist for MSN Money.

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.

When I analyzed economic costs and benefits of various degrees several years ago for an MSN column, “Is your degree worth $1 million or worthless?”, it was clear that certain degrees were winners:

–People with associates’ degrees tended to earn a lot more than those whose educations stopped at high school.

–Bachelor’s degrees, particularly those earned at lower-cost public universities, also tended to be worth the investment.

–Professional degrees in law or medicine were costly to get but clearly offered a big enough payoff.

Not such a slam dunk: Master’s degrees.

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. The Census Bureau has updated the data I used a few times since then, and the results are similar: certain graduate degrees just don’t seem to pay off.

Read more…

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.
I hear from too many readers who have six-figure student loan debts and $40,000 incomes. They can’t save for retirement or buy a home; some can’t even pay the minimums they owe on their debt.

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.

Not All Degrees Are Equal

Richard Vedder is director of the Center of College Affordability and Productivity and teaches economics at Ohio University.

Given the poor labor market, should new college graduates go on and get a master’s degree? For many students, this is not a bad option. Census Bureau data show us that typically young adults with master’s degrees earn about $8,000 more a year (roughly, 15 percent) than those just having a bachelor’s diploma. The lifetime earnings gains for the second degree should reach into the low six digits. For many, the rate of return on the added college investment therefore should be reasonably high — and it beats unemployment or working in a low-skilled, low-wage retail trade job.

Universities should survey former students for five years after graduation, and give that information to prospective students.

That said, however, that is not true for everyone. Not all degrees are equal — a master’s in anthropology or art probably has less incremental earning power than a M.B.A. or advanced engineering degree. If graduate enrollments soar as more decide to stay in school, the newly minted master’s graduates may find the job market not all that much better in a couple of years than at the present, and end up taking a relatively low paid job — and facing much larger student loan debts than otherwise.

Moreover, the cost of getting a master’s degree varies a lot, depending on the school attended, the availability of financial aid, the length of the master’s program (ranging typically from one to two years), not to mention the “opportunity cost” in terms of employment income lost while in school. Some master’s programs will cost a student only perhaps $10,000, while others (e.g., an expensive two-year M.B.A. program) might run over $100,000.

--

Join the debate