Quick Highlights:
- Graduate degrees can lead to promotions and higher starting salaries, especially in fields like business administration and computer science.
- According to the NCES, master’s graduates generally earn about 21% more than those with only a bachelor’s degree, enhancing their financial outlook.
- Opportunity costs of graduate school include lost salary and personal time, with substantial weekly time commitments for coursework.
- Strategic program selection can mitigate costs and maximize the ROI, particularly in high-demand job markets like STEM.
Table of contents
Going to graduate school is an exciting decision, but it can also be expensive. If you’re considering a master’s degree for your career advancement, you should take some time to understand grad school costs. While the costs of graduate degrees will eventually pay off in the long run, the upfront investment can be intimidating for incoming students.
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Understanding the Investment
When you decide to get a master’s degree, you are making a significant investment. The return on investment (ROI) that you get depends on the salary you end up making and how much you spend on grad school costs today. Unless you get a full-ride scholarship, you will have to pay some of the following expenses.
Tuition
One of the largest grad school costs is tuition. Typically, you will pay $24,030 in tuition each year as an in-state resident at a public school according to the NCES. Out-of-state residents at public schools pay $41,920. Meanwhile, private schools charge students $56,190 per year.
Unfortunately, you’ll pay more than this amount to get graduate degrees. You’ll have to pay:
- application
- registration
- library
- technology fees
Depending on the school, these miscellaneous fees can quickly add up to a few hundred dollars.
Books
Each year, the average grad student pays between $628 and $1,000 for their textbooks according to. A single textbook can easily cost more than $100, and many classes require multiple books. To save money, you can borrow books from the library or buy used versions online.
Living Expenses
Even if you study at an online school, you will still have to pay to live somewhere. The only way you can avoid living expenses is by living at home with your parents or other family members. If you decide to stay in a dorm room, you will spend significantly more on rent and food than you would spend on living in an apartment. The typical price of room and board in a dorm is $12,111 according to the Education Data Initiative.
Opportunity Costs
Beyond the day-to-day expenses, you will also have to consider the opportunity costs. These are the things you must forgo in order to go to college. For instance, your opportunity costs may be the money you make from your full-time job, time spent hiking trips with your friends, or free time for your favorite hobby.
No matter which program you choose, there is a time commitment involved. Each class you take is about three to four credits, which means you’ll spend three to four hours a week attending class for each course. Outside of class, you will have to do at least 10 to 20 hours of additional work. This means that you can expect to devote up to 36 hours a week to school if you sign up for four classes.
Financial Returns of a Graduate Degree
So, is graduate school worth it? If you are looking for career advancement, graduate degrees can help. However, the ROI of each program is based on which career you choose. Some careers provide higher salaries.
Overall, people who get a master’s degree will earn much more than their peers. For instance, in just 2021, someone with a master’s degree could expect to bring in average earnings of $74,600 according to the NCES. This is about 21% higher than the $61,600 in earnings people can make with a bachelor’s degree. Meanwhile, someone who only has a high school degree can expect to earn just $39,700 per year.
The extra earnings you receive because of graduate school depend on the field you study. While STEM fields tend to pay more, creative writing, art, and similar fields often pay lower wages. The following list includes some of the best-paying fields of study according to the Bureau of Labor Statistics.
- Business Administration: $73,318
- Computer Engineering: $87,548
- Computer Science: $86,432
- Economics: $70,033
- Healthcare Administration: $71,112
- Information Sciences and Systems: $78,683
- Logistics: $70,950
- Marketing: $68,370
- Psychology: $59,697
- Software Engineering: $86,432
Other than being eligible for high-paid jobs right after graduation, getting a master’s degree may also make promotions more likely. If an employer is considering two similar applicants for a new position, they are more likely to choose the applicant who has a master’s degree.
Non-Financial Benefits
When considering why grad school is worth it, you should also consider the non-financial benefits of graduate degrees. For example, a graduate school offers support with networking and personal growth. It can help you acquire specialized skills, access a unique career path, and enjoy better job satisfaction.
Networking
When you go to graduate school, you get to meet other students and work closely with your professors. While this is a little harder with an online degree there are still networking benefits available from going to school. After you graduate, you can use this network to hear about job opportunities and find references.
Personal Growth
Going to graduate school is also a way to grow on a personal level as well. You are exposed to new ideas and a different way of thinking. This can challenge your previous assumptions and help you to learn more about the world around you.
Acquisition of Specialized Skills
Through a master’s degree, you can obtain specialized skills. For example, you can learn about specific types of computer programming or take advanced classes on creative writing. Once you graduate, you can use these specialized skills to get high-paid jobs.
Access Unique Career Paths
Some jobs can only be obtained if you have a master’s degree. If you are really passionate about becoming a counselor or college professor, you can’t get one of these jobs without having an advanced degree. The following list includes some of the many jobs that are only accessible to people who have finished graduate school.
- Computer and Information Research Scientists
- Economists
- Education Administrators (Postsecondary)
- Epidemiologists
- Nurse Practitioners
- Physician Assistants
- Psychologists
- Social Workers
- Survey Researchers
- Urban and Regional Planners
Enjoy Better Job Satisfaction
More importantly, getting a grad degree can help you obtain better job satisfaction. Instead of spending your life on a job you hate and feel stuck at, you can strive for your dream job.
The Market Value of Graduate Degrees
While there are many non-financial benefits to getting graduate degrees, there are also a number of financially lucrative benefits as well. The benefit you receive depends on the degree you study and where you live.
For instance, the state of Texas recently completed a study on the benefits of master’s degrees in the labor market. Graduates who had a master’s degree instead of just a bachelor’s degree were significantly rewarded in the labor market. The median first-year earnings of master’s graduates in the state was $63,537, and the median first-year earnings for bachelor’s graduates was just $39,725.
The smallest pay difference was in interdisciplinary studies and multidisciplinary studies. In these fields, master’s graduates earned just $5,000 more than bachelor’s graduates. Graduates in accounting and business administration had the largest premiums over bachelor’s students. In accounting, this premium worked out to $20,000. For business administration, the premium was around $44,000 in just first-year wages.
Often, getting a graduate degree can help you with career advancement because it allows you to skip entry-level positions. According to Suzanne Barbour, dean of the graduate school at Duke University, once you have a master’s degree “you command a higher salary, you have more responsibility and your timeline of rising to the top is a little bit shorter.”
Making the Decision
Before you enroll in an online degree program, it is important to take some time to consider its impact on your career advancement. Will having a graduate degree help you achieve your goals? Or are your grad school costs an unnecessary expense?
After looking at your career goals and personal aspirations, you should also consider the specific program. Because of intangible benefits, like networking and alumni programs, some schools lead to better career outcomes. In addition, specific majors are associated with higher earnings.
You can typically find statistics about specific colleges online. The college website will also include information about its financial aid and scholarship programs. Once you have figured out which scholarships you qualify for, you can calculate the total cost of your education.
After figuring out the actual cost of the program and your expected career benefits, you can see if the ROI of your master’s degree is worth it. While there are some non-financial benefits as well, the ROI is a good indication of how valuable the degree will be for you.
Learn More About the ROI on Graduate Degrees
Is graduate school worth it? It depends on what your long-term career goals are. If you care about career advancement and want to earn more money, getting a graduate degree is often a good step.
Normally, the value of graduate school depends on the type of degree you get. You’ll get a better return for your grad school costs if you enroll in a STEM degree, accounting, or business administration. Multidisciplinary programs offer a lower return, but they still pay master’s graduates more than bachelor’s graduates.
If you are interested in getting a master’s degree, there are many options to choose from. Through the right program, you can get a head start on achieving your goals.