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The topic of American higher education has become fraught with debate centered on student loans. Although this is a very worthwhile debate and one that is further past its due date than Cher’s career, it is only half the picture. The other half of the conversation is the side that appeals to the Christian Grey inside all of us, because it is where the shades of grey in the conversation come out[1]: the merit of a higher education as an investment. The common factoid thrown about is that those with a higher education on average earn a million dollars more over a lifetime than those without, and graduate degree holders earn $400 thousand more than undergraduate degree holders, and my God, if you have a Ph.D you will literally have high school drop outs for footrests because you will be so rich[2].
Since any sentient being with basic math skills knows that paying $252 thousand for an undergraduate degree in interpretive dance is unlikely to yield a positive return (as many Sarah Lawrence College dance graduates can attest), I wanted to answer the question: Can a master’s degree yield a negative return?
A Complex Issue
Although the answer is an obvious ‘yes’ for some, such as those Sarah Lawrence dance graduates who questionably double down for a graduate degree in Dance Therapy (if they financed 50% of a fully loaded education—tuition, meal plan, room etc.—they would have $189 thousand in debt for the privilege of being a dance therapist—average salary is $40,000). The answer is more complicated for students who aren’t complete idiots[3].
Analytical Factors
Factors such as potential unemployment, region of work vs. institution attended, race, and sex and so forth all impact this analysis, as well as the metric chosen to determine “value” in the first place: income, savings… suicide rates? I am going to level with you all: this is a blog post, not a novel, so I went high level. My Advanced Management professor would be proud.
Earnings Based Analysis
This is the analysis that most correlates with the popular talking points regarding the value of a higher education, since they all focus on income as opposed to savings or net worth. In the table below, I break out the average lifetime earnings of a bachelor degree holder, a graduate degree holder, their working life (assuming three years of missed labor for the graduate degree holder), the average annual salary they will earn, and a calculation to determine the relative value of an actual situation vs. the national average.
Using the formula above, anyone can calculate the expected relative return, vs. the national average, in lifetime earnings of a master’s degree over an undergraduate degree. A positive number denotes the years required to double the average lifetime increase in earnings vs. an undergraduate degree, while a negative number tells you how many years it will take to erode it. Certain fields will have spectacular returns (an MBA or Finance master’s) while others will likely be horrendous (social work).
I believe that formulas such as the one above, simplistic as they are, are incredibly valuable and underused by those considering master’s degrees or degrees of any sort. Unless your parents are affluent and willing to supplement your lifestyle (in which case you must be lost in your web surfing), a negative return on a graduate degree should only be accepted if the thought of pursuing another career is more depressing than that of watching Schindler’s List on repeat for the rest of your life. So if you are determined to attain a master’s degree in interpretive dance from Sarah Lawrence College, perhaps you can begin thinking about what route you will interpretive dance your ass to the poor house.
KK here, Thanks to Mitch for this humorous, scary and enlightening post. Weigh in readers, Is Your Master’s Degree Yielding You a Negative Return? In our household, we have a Master’s Degree in Finance and a Master’s Degree in Social Work. Both are “paid in full.” Was my social work degree a great “investment?” No. Am I happy with my decision to obtain it? Most days.
[1] Where are the ball gags when you need them, am I right?
[2] Suck it, Mark Zuckerberg.
[3] I know this may be a tangent, but according to the American Dance Therapy Association, anyone with a master’s degree in psychology or similar can complete an internship and a few basic classes to become a certified Dance Therapist…or a master’s degree in specifically dance therapy can be completed. A more general psychology master’s degree has infinitely wider applicability, and therefore job prospects.