Why Pursue a Masters Degree

Better Earnings after A Master’s Degree: A Myth

Four years of books, studying and exams later, you walk off campus for the last time, armed with your Degree. Now you can finally get out into the real world and make some real money. Think again.

The fact is, once a graduate steps off the commencement stage and into the work force, that new Master’s degree doesn’t guarantee anything. They still have to compete with other graduates, or worse, other graduates and non-graduates who’ve already established a track record in the work force.

College in and of its self is a great thing. I’m not arguing the enormous value of education, if it’s knowledge you’re seeking. But survey after survey clearly points out; Nearly all students enrolling in higher education today, are seeking more money, not more education.

So the question no longer is, “Do degreed employees make more money?” as that’s already been answered. Instead, today’s young adults need to be asking, “What’s the best value for my time?”

Here’s why.

While it’s true that degreed earners make nearly double their non-degreed counterparts (www.uscensus.gov) the data represents over four generations of income earners. Of course that number would be double, in fact I’m discouraged that it’s only half. It would be ridiculous to assume that a 55 year-old professional with a degree AND 30 years of industry experience would make any thing less than double what a 20 year old non-degreed cashier makes.

There’s an assumption that once you have your degree, employers will suddenly offer you a corner office and stencil your name on a front-row parking space.

Author and Forbes columnist Edwin S. Rubenstein, in his article, “The College Payoff Illusion” points to the real culprit in the earnings gap. “Income levels for the average college graduate have stagnated. After adjusting for inflation, the average income of college graduates holding full-time jobs rose by only 4.4 per cent between 1979 and 1997, or at a minuscule annual rate of 0.2 percent. At the same time, workers with only high-school degrees saw their real income plummet by 15 percent. Bottom line: the much-ballyhooed college wage “premium” is due primarily to the fall in inflation-adjusted salaries of workers who haven’t been to college. In fact, if you don’t go on to graduate school or are not among the top graduates at one of the nation’s elite colleges, chances are your sky-high tuition is buying you no economic advantage whatsoever. In recent decades the flood of graduates has been so great than an increasing proportion have found themselves, within a few years, working as sales clerks, cab drivers, and in other jobs that do not require a college degree.”

We all know that time is money. I’d be willing to bet Einstein even had a formula to validate it in a leaf of lost notes somewhere. And with a whopping 84% of total enrolled students borrowing, from student loans to credit cards, just to make their way through school, that patient piper is going to cost a pretty penny by the time the last “note” is paid. As graduates entering the workforce, these high balance interest accruing debts set the clock on a ticking time bomb, thereby forcing young adults to desperately seek higher paying positions, just to keep up with the many payments. And if no high salary offers come knocking on the door in time, then even pizza delivery begins to look attractive.

In his Feb 6, 2007 article, “Debt Trap”, published in “The Old Colony Memorial” writer Chris Nelson explores this sad but increasingly typical situation. “Eight years into their marriage, the (Draut’s) didn’t have a dollar to their name and were still three days from their next paycheck. They were hungry and needed money for groceries. So, they scattered their compact disc collection on the living room floor and picked out which ones to sell. This was the fulfilled promise of a college degree? “That was a humbling experience,” (Mrs.) Draut said. “We never figured we would be scratching by at the age of 30, much less peddling our CDs.” A combination of graduate school tuition, paltry wages, a period of unemployment and a career change drained the couple’s bank accounts.”

To add insult to injury, nearly 68% of 21st century recent college graduates now carry student loan debt balances exceeding $25,000. Even with the off chance a college graduate lucks their way into higher pay immediately, the now due loan payments usually exceed any gain in higher income.

Still thinking college as an investment, consider this. One of the many goals of all workers, is saving for a secure, stable retirement. Instead of “investing” in an education, what would happen if you actually invested it? If you invested, say $325 month in an average growth 12% mutual fund staring fresh out of high school, during the same years your college friends are “investing” in classroom time, your account balance would read $20,000. Let that $20K sit, in the same 12% for 33 years At age 55 you have a very real, $1,033,650. You would be ready to retire early at age 55 a millionaire. Your college friends? Who knows? They were spending the next 30 years playing catch-up. And you never had to add another dime. Want to retire even sooner? Continue contributing more during your working years, and it’s reasonable to shave another five to ten years off your working years, making the Golden Years, truly gold If money talks, you’ll likely have few friends for idle chit-chat, as they probably be still working, since that piece of paper their college degree is written on, didn’t earn any interest.

Here’s the real facts. Both college and non-college people can be successful, and there are countless people on both sides of that divided highway to prove it. When looking at your future, focus on the key word “Your”. What’re your real motives, and how hard are you willing to work to get them? Because you’re the one who’s going to have to look in the mirror, if your choice didn’t work.