Is College Worth the Cost ? Part 2

Yahoo Finance ^ | 09/12/2007 | Anya Kamenetz

[SirLinksalot]

This is a continuation of the article posted here
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Isn't a master's degree the new bachelor's?" I hear this all the time when I visit college campuses.

In some ways, the answer is yes. The number of master's degrees conferred is expected to rise 30 percent over the next 10 years, and 40 percent of college graduates will enroll in a graduate program within a decade after college.

But does graduate school pay off? I'll unabashedly ignore the value to humanity of pure research and the liberal arts in answering this question, and focus instead on the hard economics of a graduate education.

Caution and Preparation Are Key

Graduate degrees are necessary for some fields, raise earnings on average, and can lead to more enriching careers -- but choose carefully. Compared to college, there's less financial aid available; tuition is higher (averaging over $20,000 for master's programs at public institutions); parents are less likely to foot the bill; and, as an independent adult, you give up income from working in order to attend.

Less than a fifth of all graduate and professional students receive scholarships, fellowships, or assistantships. And some graduate degrees barely increase your earning potential -- and may even lower it.

The bottom line is, besides the out-of-pocket and opportunity costs, graduate school is meant to prepare you for a specific field. If you end up working outside that field, there goes a lot of time and money. That's why I think anyone who enters a graduate program should first spend at least a year getting closely related work experience.

A Discipline-by-Discipline Breakdown

Provided they match your interests and abilities, some programs are very likely to be a good investment even if you have to borrow the entire cost.

Others should be pursued only if academics are your absolute passion and nothing else will satisfy you; if you can minimize costs by working, choosing a public program, or attending part-time; or if you get a full ride.

Here's my very rough ranking of programs along that spectrum:

• Business school

Even more than other grad students, MBAs are expected to enter school with years of related work experience. Maybe that's why they find it so rewarding.

Over the past few years, MBAs have averaged between $30,000 and $40,000 in student loan debt. Their average starting salaries, on the other hand, are over $80,000, and for those in the top-10 schools, over $90,000.

• Medical school

"Medical student debt is at a crisis point," as the American Medical Association (AMA) concluded in a 2003 report. Loans average over $100,000, while for at least three years after graduating you'll be a resident earning between $35,000 and $40,000 a year.

The AMA found that high loan debt affects specialty choice and leads to feelings of depression and burnout among residents. In the long run, however, medical salaries do tend to offset debt, ranging from a low of $100,000 for family practitioners to a high of $850,000 for cardiologists.

And let's not forget dentists. They borrow as much, have lower stress than most doctors, and can earn the same six-figure salaries.

• Master's programs

In general, master's degree students come out with an average of about $32,000 in debt, while for Ph.D.s it's around $53,000. Those with master's degrees earn about 18 percent more than those with bachelor's degrees on average, and Ph.D.s earn about 50 percent more.

Technical fields have a bigger payoff. Graduates with master's degrees in computer science, engineering, or math earn about 50 percent more than those with bachelor's degrees.

Education, one of the most common master's degrees, has a comparatively small but positive payoff.

• Law school

Law students borrow over $80,000 on average. Starting salaries at large firms are over $100,000, but beware: The best jobs are reserved for those at the top-tier law schools. Small firms, nonprofits, and government jobs pay around $40,000 to start.

Officials in the profession are concerned that exploding debt is making lives harder for non-corporate lawyer types. If you're interested in public interest law, look for a loan repayment assistance program, which will help pay back your debt in exchange for serving the public good.

• Advanced degrees in the humanities

According to the U.S. Census Bureau, the payoff from social science and liberal arts master's degrees is actually negative -- the average liberal arts MA earns less than the average of all BAs.

And according to an in-depth study conducted back in 1999, those with Ph.D.s in the humanities had the highest debt and lowest income of all students in all disciplines.

Moreover, universities are increasingly relying on part-timers rather than tenured professors. That means the number of well-paying, secure jobs in academia is going down.

• Advanced degrees from art, culinary, and journalism schools

From a dollars-and-cents perspective, the worst values in graduate education are those in which tuition is high and average earnings are low or unpredictable: fine arts, creative writing, and cooking come to mind. Popular and exclusive graduate programs in creative and competitive fields can charge high prices because they promise access to an inner circle -- a crucial edge in a line of work that's always going to be a bit of a gamble.

This spring, the New York Times detailed the plight of those who borrow $80,000 in private loans to attend culinary school, when average beginning salaries in the restaurant industry are between $20,000 and $30,000.

Entry-level salaries in journalism are only a bit higher, in the $30,000 to $35,000 range, and the world of print journalism is currently in incredible turmoil. So taking on a high five figures of debt for this career is a big risk as well.

Choose Wisely

The grad students I meet generally have high aspirations and a desire for meaningful careers. Yet it's still quite possible to become a novelist without an MFA, a journalist without a journalism degree, and just about anything without a master's in media studies.

It's important to remember that universities create and market new graduate programs to serve their own needs as much as to add value for prospective students. So anyone who's smart enough to get an advanced degree should be smart enough to limit their expenses to a minimum and choose a program that will widen their options without saddling them with debt.

[Bat_Chemist]

Part of HR’s responsibilities is to check on applicant credentials. If it’s a solid company (and, as it’s F500, it should be), you were checked out.

ymmv

[endthematrix]

IMO, what’s needed it a restructuring of the US education system. A two tiered approach that routes children via aptitude into either “white collar” (ex. business) or “blue collar” (ex. vocational) academics.

[carton253]

When I hear what some of my classmates got their undergrad in, I just don’t have a clue what they can do with it. But without the years at university learning more about myself than any other subject, I would have never been so optimistic about my future.

[xzins]

Isn't a master's degree the new bachelor's?"

Not necessarily. My son recently got out of the Air Force, started a system/network education leading to an associate's degree, tested for and received a Cisco certification, and was hired while still in school for a very very nice sum of money....all before he even got the associate's degree.

He's making 2.5 times what a starting teacher in the area would get.

[SirLinksalot]

In many professions college is the only entry point, such as law and medicine and most engineering

Law and Medicine are great degrees. The only question I have about them is this : ARE THE PORTABLE ?

For instance, if you got your law degree in Florida, are you allowed to practice it if you were to move to California or vice versa ? Or do you have to take the bar again when you move to another state ?

Same question with a Medical degree... can you take it with you from one state to another ?

The thing about being, say a Computer Engineer is this --- tools are STANDARD and if you can demonstrate expertise and experience in say -- Java Programming, you can take it anywhere with you.

[SirLinksalot]

NO

Actually, I would say --- YES for the right price.

$35,000/year for 4 years and a debt of over $100,000 after graduation is NOT the right price.

However, if parents have been saving money on their tax defered 529 plans for 10 years on say an Index fund, it is estimated that they'd have about $50,000 by the time their child reaches 18. If they go to a good in-state university ( and all states have them ) and their child does not enroll in fluff courses (e.g. gay and lesbian studies ), that money will be able to pay for 4 years of college and if the course the child take prepares him/her for a fruitful and lucrative career ( without saddling the family in debt), yes, the money will be worth it.

[gdaddy]

don’t count on it

[stainlessbanner]

keep the good work - great tag line

[Smokin' Joe]

By contrast, a roughneck (oil rig crew), working worm's corner, can knock down 50K+ their first year, at least in this neck of the woods--with a High School Education (or less). The pay goes up from there.

Let's face it, not everyone was meant to go to college, (which has not stopped the proliferation of degrees in fields which should have been a chapter in a 101 text), and some will benefit more by hitting the bricks than hitting the books.

[Publius Valerius]

For instance, if you got your law degree in Florida, are you allowed to practice it if you were to move to California or vice versa ? Or do you have to take the bar again when you move to another state?

Depends on the state. Some states allow for free movement of attorneys, while other states require every prospective attorney to take the bar exam. Typically, the latter states are those that are heavily populated or are considered to be desireable destinations--New York, Florida, South Carolina, Texas (I think) etc.

I'd say the majority of states allow relatively free movement.

[carton253]

He was a great man!

[wbill]

And according to an in-depth study conducted back in 1999, those with Ph.D.s in the humanities

I've been in a whole lot of meetings since I've started working professionally. I've heard the following statement innumerable times: "If only we had one more doctor/nurse/instructor/tech/engineer/electrician/plumber/contractor/etc, we could get this project finished."

I've never - ever - heard the statement: "If only we had one more Women's/Latino/African/Asian/QueerTheory Studies major....."

To me anyway, this says something about the difference between people to do things, and the people who study things.

[scotus]

Agreed. I was in college a total of 24 straight years. 6 undergraduate, 7 for my first PhD in Philosophy, 7 more for my second PhD in Psychology, and 4 for a PostDoc. All these years were covered by scholarships and fellowships. I am currently unemployed.

[what's up]

**

[Gatún(CraigIsaMangoTreeLawyer)]

If one is going for the MBA, it is advised not to go directly from undergraduate to graduate. One gets more out of the MBA studies if one can wait for at least 5 years to gain outside experience and then bring it to the classroom.

[<1/1,000,000th%]

"Medical student debt is at a crisis point," as the American Medical Association (AMA) concluded in a 2003 report.

Yet they continue to support the trial lawyers.

[Gatún(CraigIsaMangoTreeLawyer)]

“I am finishing up my Master’s Degree and will be applying for PhD programs in the next couple of months. I am one of those, after a long time of sitting in a dead end job, who decided to go back to school. Yes, it has been at great cost.

“But it has been worth it. I can’t measure my education by the degrees. For me, the intangibles that come from pushing myself beyond my comfort zone, striving, setting goals, and being rewarded not just in a grade but knowing that I left “nothing on the field.”

You are correct. I could not have said it better.

Thank you.

[SirLinksalot]

I am one of those, after a long time of sitting in a dead end job, who decided to go back to school. Yes, it has been at great cost.

If you happen to be fortunate enough to work in a company that values more educated workers like Boeing, Mcdonnel Douglas, Pfizer and a lot of Wall Street companies, they would actually pay for your tuition to get a higher degree ( e.g. Master's and PH.D). They get tax deductions for doing so.

Of course your degree has to be RELATED to your work ( e.g. Engineering when you work for Boeing, Biochemistry or molecular biology if you work for Pfizer, MBA if you work for say, Goldman Sachs ). They're not going to pay for a philosophy or literature degree.

[SirLinksalot]

I was in college a total of 24 straight years. 6 undergraduate, 7 for my first PhD in Philosophy, 7 more for my second PhD in Psychology, and 4 for a PostDoc. All these years were covered by scholarships and fellowships. I am currently unemployed.

You sound like a good teaching candidate. Are you sure no college or university will hire you ?