Going back to school is never an easy decision. On one hand, getting a degree or going on for an advanced degree can result in an increased income over a lifetime and increased job opportunities. On the other hand, it may end up taking a long time and costing a lot of money.

Do people with a master’s degree make more money than those with a bachelor’s degree in the same field?

The simple question is difficult to answer.

In fact, after the economic crash in 2007, many people would say “no.” Urban myths spread that college degrees were not worth much. Some people with a bachelor’s degree argued that they earned only a little more than someone with a high school diploma and lots of on the job experience. Other people with advanced degrees believed that a master’s degree did not earn much more than a bachelor’s degree.

Then just when it looked like education horror stories were beginning to ebb, the story of a Harvard grad that could not get an entry level job in the Container Store hit toward the close of last year.

So, is it worth it?

Fortunately, such war stories told from the trenches may be the exception rather than the new normal. Just looking at the financial aspect of it, getting an advanced degree may be worth it.

According to a Press Release by the National Association of Colleges and Employers those with a master’s degree make considerably more than those with a bachelor’s. On average, this could be about 20% more as a starting salary.

Some Considerations

If you’re considering getting an advanced degree, you have to look beyond how much more money you can make. Different sectors of the economy offer different financial rewards for degree holders, and it is possible to make more money by simply changing careers or joining a company that offers job training.

What really matters is your big goal in getting a degree. This will determine when you will pursue an advanced degree, and it will determine how you will do it, too.

Still, if salary is an important consideration, then the best way to make a decision is to do some research. Your particular field may not pay much more with an advanced degree. Alternatively, you might be pleasantly surprised.

Additionally, getting an advanced degree can be a new start for you. If you don’t like the field you’re in, you can switch to another field. It may require you to take some supplemental classes to get into the new field if you have had no previous education or experience in it, but it is possible.

Suppose, for example, you are currently in elementary education. At the bachelor’s level, your earnings are around $37,600. If you were to get at master’s degree, you would earn $11, 300 more a year because you’ll be earning 30% more. However, if you changed fields altogether, you would not have to settle for a mere $48,900. If you were to get a master’s in computer science, you could earn as much as $80,400. You will now be earning about 47% more. It’s quite a leap.

Besides, earning more, you will have a better chance of holding on to your job. The Labor Department says that the unemployment rate is far higher for undergraduate degrees than for those with graduate degrees. The unemployment rate for someone with a master’s degree is around 3.6%. Meanwhile, someone with an undergraduate degree faces a 4.9% unemployment rate. Although these may appear to be a small difference, a 1.3% improvement is a huge leap when it comes to labor statistics.

Financial Cost

Going back to school is expensive. You will probably have to take out a loan to manage it. Fees and other costs can range from $80,000 to $120,000 depending on the school you attend and the degree you aspire to earn.

Although this is certainly a discouraging number, you also have to look at the cost of not going back to back to school. Economists call the cost of a missed chance an “opportunity cost.”

Returning to our earlier example of an elementary school teacher, you will lose $11,300 every working year if you don’t get a master’s degree in education. And, of course, if you switch to a more prosperous field like computer education, you are missing out on a massive $42,800 of lost income each year.

Another factor to consider is how many years you will be working. If you are in your 30s, then the two years spent in school will give you a good 30 years of great paying work.

Managing Classes

There are two ways of going through graduate school.

The ideal way is to borrow enough money to make it unnecessary to work for two years. This means that you can work flat out to achieve your career goals.

However, becoming a full-time student may not be a reality for you. In this case, you can still work during the day and attend classes at night, either online or on campus. Some degrees, in fact, may actually encourage you to do this if the degree is in the same field as your profession. For instance, if you’re getting an MBA, then you might get credit for your working experience in business.

Weighing Pros & Cons

Deciding whether you should go back to school is difficult. You may also have to ask those around you—family, employers, and others—for their input, as your decision will also affect their lives. Remember, besides costs, there are many personal sacrifices to make—decreased leisure time for your interests, less family time, more pressure from school, and increased fatigue on the job from sleeping less. On the bright side, you are reinventing yourself and creating a bold, new future.

Sources:

Harvard grad story:
http://www.forbes.com/sites/nextavenue/2014/11/04/harvard-grad-48-loses-job-and-insurance-gets-rejected-by-container-store/2/

Contrast in earnings:
http://www.naceweb.org/about-us/press/top-paid-business-majors-bachelor-master-level.aspx

Paying for college:
https://www.simpletuition.com/student-loans/private/

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