Our culture has led younger generations to believe that higher education leads to higher earnings and financial security, but this isn’t always the case. Instead, society and the media have told Millennials and Gen Z a master’s degree is the new bachelor’s. But is it worth it for everyone? If you’re considering taking on master’s degree debt, it’s essential to consider the following before jumping in headfirst.
A master’s degree is the new bachelor’s
With bachelor’s degrees quickly becoming requirements for more entry-level jobs, new grads are flocking to take on even more debt for a master’s degree. In the 50s and 60s, when baby boomers were growing up, a high school degree was enough to join the workforce. That’s why those who went to college stood out. However, let’s keep in mind that college costs have almost doubled since the 1980s.
College degrees then became the standard. And now it seems like master’s degrees are becoming the standard. The question is, is it worth it? In some cases, sure. For those who specialize in a particular field and intend to advance within that field—medicine, law, or finance come to mind—master’s degrees can help in that regard. In fact, they’re a requirement. But most people who get master’s degrees are accumulating debt that might take years to pay off.
The numbers around student loans
Graduating with debt is more commonplace than ever and sometimes even a necessity. But is it always worth it? When deciding whether to take out loans for grad school, weigh your options carefully. Evaluate how much of an impact earning a degree will have on your life—and career—to determine if it’s genuinely worth it. Leaving education with a higher degree can lead to higher salaries, but it can also leave you in debt for years.
A master’s degree might improve your chances of getting hired or a higher salary. On average, however, the salary difference between bachelor’s and master’s degrees isn’t that wide. According to the U.S. Bureau of Labor Statistics’ 2020 data, the average weekly income is $240 more for a master’s degree. That’s around $960 a month. So it seems worth it, except the average debt for a bachelor’s graduate is $32,000, and $65,000 for a master’s. So even with an extra $1000 a month in salary, it would take almost three years of paying those $1000 back to get down to the bachelor’s $32,000 in debt- assuming there’s no interest.
Things to consider before taking on more debt
Before taking on any debt, consider what’s in it. Are lucrative opportunities available if you don’t go to grad school? Or even if you do pursue higher education but delay grad school? Does the field you’re going into require a master’s degree and make it worth the debt? Even at the same level, there’s a huge difference in salaries depending on the field.
In 2022, Humanities bachelor’s degrees are supposed to yield $50k yearly salaries, while computer sciences and engineering majors project over $70k yearly. So you should think about these options and make sure pursuing a master’s degree is worthwhile for your future. Also, be realistic about how much you can realistically afford to pay back once you graduate.
Be wary of taking out student loans that will leave you financially struggling once they come due. Will you be able to work part-time while attending school full-time? That can help you keep your expenses low while still building up experience and skills to help get your career off to a good start when graduation comes around. Research your field and the salaries it offers for different degrees. Make sure you’re not taking on an amount that will stop you from building the life you want for yourself.
