40% Students Are Worse-Off Financially After Getting Master's Degrees
Elite U.S. universities have awarded thousands of master’s degrees in recent years, according to a Wall Street Journal analysis of data from the Department of Education.
But judging by the early career earnings of these graduates, many won't be able to pay off their student loans from pursuing their degree.
Film Department graduate students at Columbia University, one of the Ivy League schools with the most volatile rankings, are the most indebted compared with other U.S. universities that offer master’s programs, a Wall Street Journal survey found.
At New York University, another institution in New York City, graduates with a master’s degree in publishing borrowed a median of $116,000 and earned an annual income median of $42,000 after two years of work.
At Northwestern University, half of students with a degree in speech-language pathology owe more than $148,000, with an average annual income of $60,000 two years after graduation.
At USC, marriage and family counseling graduates borrowed a median of $124,000 over the same period, with half of those graduates earning $50,000 or less.
School spokesmen maintain these graduate programs and the university by emphasizing their strengths in academics, and that providing students with financial support and employment opportunities is the school's top priority. Meanwhile, the reality faced by graduates of these program is brutal.
Zack Morrison, 29, from New Jersey, said: “I always wake up at 2 a.m. in a panic and think, how the hell am I going to pay off this debt?”
He received his MFA from Columbia in 2018, and the loan balance is now approaching $300,000, including accrued interest.
He earns between $30,000 and $50,000 a year as a Hollywood assistant, including income from side jobs such as commercial video production and photography.
The average debt of Columbia film graduates with federal student loans is $181,000. However, two years after earning a master's degree, half of the graduates were earning less than $30,000 a year.
Many graduate programs are "scams," according to one higher education policy analyst. About 3 million Americans are expected to enroll in graduate programs this year, but many programs are often not worth the time and money to pursue.
Source: U.S. Department of Education
"It makes sense that students choose to go to graduate school. They want to get a good job and make more money," said James Murphy, senior policy analyst at Education Reform Now.
Many undergraduates go straight to graduate school after receiving their bachelor's degree, hoping to gain new degrees or skills that will enhance their competitiveness in the workplace. But recent research shows that 40% of master’s programs in the US have no positive financial return.
Murphy told CBS News that it's even worse if you factor in the cost of the project and the cost of that time. In some cases, graduates even received negative ROI.
“You make less money with this degree, so that sucks,” Murphy added, “and what’s worse is that about 60% of students take out loans to pay for graduate programs and end up in student loan debt. "
"The federal government is desperate to hand out loans to students, leaving them with even more debt, while at the same time colleges make good money from high tuition fees."
In the past decade alone, some 9,000 new master's degree programs have sprung up, but not so many new career types.
"It's essentially the university seeing the money there and getting it," Murphy said. He urges students to think more about whether the degree makes sense before enrolling in a master's program, and ask themselves why they're getting a master's degree in the first place.
"If your answer is to make more money and get a better job, and that's your only answer, that's probably not a good idea."
If a student can point to specific data about a program of interest, and how it could lead to higher-paying jobs, develop the right skills, or earn a certificate, the investment may be worthwhile. For example, in many public schools, teachers with a master's degree in education earn more than teachers without a master's degree.
He also suggested that students can visit websites such as College Scorecard, run by the U.S. Department of Education, to compare the cost and value of U.S. higher education institutions.
"[Students should] be wary of graduate programs that only promise them a great alumni network and better communication skills. They should instead, in these programs, find out what things they can get done during the program that they can't now." Although a lot of students now think of pursuing graduate degrees as necessary to secure better career prospects, it isn't always the case for all industries.
Whether a student should pursue graduate studies depends on their major, their industry of interest, and their long term career planning. At Enlighteens, we believe that education help students become the best version of their individual selves. We are here to help students and families pursue the education that suits their unique needs, with the bigger picture in mind.