In many fields, grads with a master’s degree leads to significantly higher starting salaries than their bachelor degree-holding counterparts, according to a new report by the National Association of Colleges and Employers (NACE).
NACE’s September 2012 Salary Survey shows there can be a big pay off for higher-level degrees, with average starting salaries fluctuating by more than 20% between holding a master’s or bachelor’s degree, says NACE executive director Marilyn Mackes.
But recent college grads and students considering continuing their education for a master’s degree, the decision should not be based solely on money, warns Beth Flye, director of admissions for MBA@UNC.
“Weighing the pros and cons of your situation can help you make vital decisions on when and how you will pursue your education as well as what your ultimate goals are going to be by getting this degree,” she says.
Here’s what education experts say higher-degree hopefuls should consider when weighing out the pros and cons of going back to school.
Potential for higher salary
Students should research to see if a higher degree in their field of interest would pay off in the long run.
The NACE survey shows that the average starting salary for a master’s degree for elementary education is $48,900—30% higher than the average salary for the same major at the undergrad level, which is $37,600. A master’s degree in computer science commands an average salary of $80,400, nearly 30% more than their bachelor degree-holding counterparts making an average of $62,2000.
Additionally, the unemployment rate for master’s degree-holders is about 3.6%, while undergraduate degrees are at 4.9%, according to the Labor Department.
“There is going to be a lot of time, sacrifice and hard work that will be a part of going back to school and you should carefully weigh these factors and your desire to continue your education before considering the salary outcomes,” says Flye.
Consider the financial cost
Two year MBA and master’s degree programs can cost anywhere from $80,000 to $120,000 and even with a salary increase, students should still consider the amount they will have to take out in loans, says education consultant Danielle Babb.
“Calculate the projected difference in salary and determine how many years it will take to recoup that cost, and it may help you make a solid decision,” she says.
Students need to be realistic about student loans and interest rates and recognize that landing a well-paying job post-graduation is crucial to staying afloat, says Carol Aslanian, senior vice president at EducationDynamics, parent company of GradSchools.com.
“Taking on debt in this economy is not wise unless the payoff is significant enough to take the risk,” she says.
Consider the opportunity cost
There can be an opportunity cost to leaving the work force for a couple of years to earn a graduate degree, says Scott Shrum, director of admissions research at Veritas Prep (www.veritasprep).
“Young professionals need to remember that they'll probably be working for the next 40 years, and a two-year investment in one's 20s may help make the next 40 years much more successful,” he says.
Babb points out that nighttime or online MBA or master’s programs can allow students to continue to working and gain experience while in school. In fact, some programs require students to maintain their professional lives while taking classes.
If students are able to juggle an internship or apprenticeship on top of their course load, it can be a win-win situation for both students and employers, says Flye.
“The student has the chance to demonstrate their skill set and readily apply their newly gained knowledge, and the employer can benefit from the value-added contributions from the student--an experiential learning program has the potential to lead to a full-time job for the student.”
Consider personal/career preferences
Interested grad students should talk with family, friends in higher degree programs and admissions officers to see if it will be the right fit and expectations will be met.
“Think about and determine where you are in life, what you want to accomplish and what your career endeavors are to make sure that going back to school is the right decision for you,” says Flye.
Babb recommends students also look at whether their reasons to go back to school lean more towards personal fulfillment or career advancement and decide if their goal is worth the return on investment.
“Costs are not just monetary--they are time, personal sacrifices and a heavy commitment to education, writing and learning,” she says. “The last thing you want to do is have regrets when you are done and potentially have debt, too.”
For those who want to change careers and need to acquire new skills, want to move up in a current career, or are aspiring entrepreneurs, it’s important for students to figure out what they hope to achieve before signing up, says Shrum.
“Knowing which of these categories you fall into will help you find the right program and go in with a solid plan for making the most of your time in school.”