It’s no secret that getting an education can come with a massive price tag. However, figuring out whether getting a Master’s degree is a wise investment or a waste of money is often surprisingly tricky. There are multiple factors you’ll need to consider. Otherwise, you may pursue a path that doesn’t lead to the financial boost or lifestyle you’re hoping to snag. If you’re wondering if a Master’s degree is worth the money, here’s what you need to know.
The Cost of a Master’s Degree
On average, a Master’s degree costs around $66,340. However, what an individual pays can vary dramatically. Some of the lowest cost options may run only $30,000, while the higher end may hit $120,000.
There are several reasons why the price can vary so dramatically. First, every university can set its own rates, so the college you choose plays a role. Generally, private schools cost more than public universities, with average prices sitting at $81,100 and $54,500, respectively. However, some colleges in both groups may break that mold.
Additionally, some majors come with higher price tags. On average, a Master’s in the Arts is more expensive than a Master’s in Science. However, individual majors can have unique price points.
Whether you’re an in-state or out-of-state student leads to cost variances. Typically, in-state students pay less than their out-of-state counterparts, causing the same educational experience to come with two different price tags.
Finally, program lengths differ depending on the course requirements, leading to further potential cost differences. Generally, a 30-credit-hour program costs less than a 60-hour program, mainly because college tuition prices are based on the number of credit hours taken.
Since there’s so much variation in cost, you’ll need to determine how much you’d need to pay for your preferred degree at the college you want to attend. Without that figure, it’s hard to decide on whether getting a Master’s degree is worthwhile in your situation.
Earning Potential Increase
Overall, Master’s degree holders earn approximately 20 percent more than Bachelor’s degree holders on average. That’s a notable jump, giving Master’s degree holders a median income of nearly $78,000 per year.
However, just as prices vary, so does earning potential. Some majors come with a far larger pay differential for those who choose to get an advanced degree.
For example, the differential between a Bachelor’s and Master’s in biology is a startling 86.5 percent. In that case, getting an advanced degree is worthwhile in nearly all cases. For those studying business administration, the Master’s comes with a differential of 51.4 percent, which is incredibly solid. The differential for information technology administration is similar, sitting at 46.9 percent.
But not all Master’s degrees perform as strongly. For instance, the differential between a Bachelor’s and Master’s in finance is just 15 percent. If you major in accounting, the differential is a mere 4 percent.
When determining if a Master’s degree is worth it, it’s wise to explore how much your earning potential increases if you have the extra education. By doing so, you can determine how it influences your long-term earning potential, making it easier to see if the financial value is ultimately there.
Unemployment Rate Differences
If you’re looking for job security above all else and wonder if having a Master’s degree makes a difference, it actually can have an impact.
Overall, the unemployment rate among Master’s degree holders in 2021 – a period where the pandemic was still influencing the market significantly – the unemployment rate was 2.6 percent. For Bachelor’s degree holders during that time, the rate was 3.5 percent. That’s a 0.9 percentage point difference.
Whether that’s enough to sway your decision may depend on your priorities or employment factors in your area. However, it’s worth factoring into the broader equation.
Long-Term Career Outlooks
Another financial factor to consider is the long-term career outlook associated with the roles relating to the Master’s degree. For instance, if a field is growing and there aren’t enough professionals to meet demand, then pay rates are likely to rise since companies are competing for talent. This can make a degree that seems costly today a wise move overall, as the associated earning potential will improve over time.
However, if a job is connected to a position or field in decline, the long-term earning potential may diminish. When the amount of available talent outpaces demand, employers don’t have to compete for strong candidates. As a result, they usually won’t need to increase wages to find a solid new hire. That harms the financial side of the equation from the beginning.
But if wages remain stagnant over the long-term but the availability of candidates remains high, the outlook gets worse. Inflation will ultimately diminish your purchasing power, and the company won’t necessarily have a reason to correct that.
That’s why it’s wise to examine the long-term career outlooks relating to the Master’s degree. That allows you to determine if the extra education may get more or less valuable over time, ensuring you can examine the big picture prior to making a decision.
Degree-Related Job Requirements
Finally, when determining if a Master’s degree is worth it, you need to consider any degree-related job requirements. In some fields or roles, having an advanced degree isn’t a way to stand out; it’s an outright necessity.
For example, you typically can’t get licensed as a mental health counselor or psychologist without a Master’s degree. Upper-level human resources roles may consider an advanced degree a must. The same goes for many healthcare roles. Some areas even require that high school teachers have a Master’s, and nearly all aspiring college professors have to earn an advanced degree to qualify for the job.
If you have your sights set on a specific role and it requires a Master’s degree, then advanced education is essentially your only path toward your dream job. In this case, the satisfaction that comes with working in the field may override many of the financial considerations, making a Master’s degree worth it for intrinsic reasons.
Is a Master’s Degree worth the money to you? Are you a Master’s degree holder that feels it wasn’t worth the time or money? Why do you feel the way you do? Share your thoughts in the comments below.
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Tamila McDonald has worked as a Financial Advisor for the military for past 13 years. She has taught Personal Financial classes on every subject from credit, to life insurance, as well as all other aspects of financial management. Mrs. McDonald is an AFCPE Accredited Financial Counselor and has helped her clients to meet their short-term and long-term financial goals.