(Credit: Chip East/Reuters) Room for Debate recently published two forums on the burdens of student loans, and heard from a lot of former students, parents, professors and others who shared personal horror stories, blunt advice and critical observations about higher education.
A number of economists and education researchers say that the student debt problem, while real, has been overblown by the press and loan-forgiveness advocates, and that most students do not graduate with too much debt.
But the debate presents difficult questions for young people, who face the most difficult economy since the Great Depression. Many have decided to go to graduate school, to wait out the storm. Several commenters on our forums even said they had no choice but to seek a master’s degree (and incur more debt), arguing that a B.A. today is the equivalent of having a high school diploma 20 years ago and more employers require a higher degree.
How do students know if an M.A. is worth it or not? What degrees might be worth getting, and which are not? How does a student weigh the risks and benefits of taking that intermediate step in higher education?
- Mark C. Taylor, Columbia University professor
- Stephen Joel Trachtenberg, former university president
- Liz Pulliam Weston, personal finance columnist
- Richard Vedder, Ohio University economist
The Education Bubble
Mark C. Taylor, the chairman of the religion department at Columbia University, is the author, most recently, of the forthcoming “Field Notes From Elsewhere: Reflections on Dying and Living.”
The next bubble to burst will be the education bubble. Make no mistake about it, education is big business and, like other big businesses, it is in big trouble. What people outside the education bubble don’t realize and people inside won’t admit is that many colleges and universities are in the same position that major banks and financial institutions are: their assets (endowments down 30-40 percent this year) are plummeting, their liabilities (debts) are growing, most of their costs are fixed and rising, and their income (return on investments, support from government and private donations, etc.) is falling.
Colleges are on the prowl for new sources of income. And one place they invariably turn is to new customers, i.e., students.
This is hardly a prescription for financial success. Faced with this situation, colleges and universities are on the prowl for new sources of income. And one place they invariably turn is to new customers, i.e., students.
During times of financial stress, people become vulnerable and understandably seek to improve their situation in any way they can. For many, more education seems to be the solution. When the economy goes down, applications to graduate programs go up.
As a lifelong educator, I believe more education is always a good thing, but buyers must beware. The debt crisis is not limited to governments and universities but extends to students and their families. Far too many students come out of college with substantial debts that plague them for years.
The Value of an M.A.
Stephen Joel Trachtenberg is president emeritus and professor of public services at the George Washington University. He is also chairman of the Higher Education Practice at Korn Ferry International.
The M.A. degree is neither fish nor fowl nor good red meat. I had a classmate at Columbia who remained on after receiving his B.A. degree to earn an M.A. degree on a fellowship while waiting for his fiancé to graduate from Barnard. Another classmate who started a Ph.D. program was informed after a year that he had no real promise but if he went away quietly they would give him a booby-prize: the M.A. He became an M.D.
What’s so bad about reading a lot of French literature at someone else’s expense?
Does earning an M.A. (distinguishable from an M.B.A. or other professional degree) make any sense from a cost-benefit point of view? It does allow one to upgrade one’s alma mater. If you originally matriculated at a college you are vaguely uneasy about, taking an M.A. at a more elite institution allows you to kick down and kiss up, henceforth letting you tell people you “went to school” in New Haven. And it does, of course, ornament a resume indicating academic sitzfleisch — the ability to keep your behind in a chair in a diligent manner. A “B” undergraduate can become an “A” graduate student.
The M.A. permits someone who has a generic B.A. degree in a field she didn’t much care about to change direction, to add a line to her curriculum vitae that says she has a documented competency. M.A.’s also allow their owners to check the right box on corporate personnel forms and similar documents used by the armed services, N.G.O.’s, schools and public agencies that like their civil servants credentialed.
Degrees That Don’t Pay Off
Liz Pulliam Weston is the author of “Easy Money,” “Your Credit Score” and “Deal with Your Debt.” She is a personal finance columnist for MSN Money.
Graduate school has traditionally been a great place to wait out recessions while honing your skills for a better job. But sometimes, the payoff doesn’t justify the cost.
When I analyzed economic costs and benefits of various degrees several years ago for an MSN column, “Is your degree worth $1 million or worthless?”, it was clear that certain degrees were winners:
–People with associates’ degrees tended to earn a lot more than those whose educations stopped at high school.
–Bachelor’s degrees, particularly those earned at lower-cost public universities, also tended to be worth the investment.
–Professional degrees in law or medicine were costly to get but clearly offered a big enough payoff.
Not such a slam dunk: Master’s degrees.
In some fields, such as business or engineering, a graduate degree typically boosted income by more than enough to justify the cost. In others — the liberal arts and social sciences, in particular — master’s degrees didn’t appear to produce much if any earnings advantage. The Census Bureau has updated the data I used a few times since then, and the results are similar: certain graduate degrees just don’t seem to pay off.
Not All Degrees Are Equal
Richard Vedder is director of the Center of College Affordability and Productivity and teaches economics at Ohio University.
Given the poor labor market, should new college graduates go on and get a master’s degree? For many students, this is not a bad option. Census Bureau data show us that typically young adults with master’s degrees earn about $8,000 more a year (roughly, 15 percent) than those just having a bachelor’s diploma. The lifetime earnings gains for the second degree should reach into the low six digits. For many, the rate of return on the added college investment therefore should be reasonably high — and it beats unemployment or working in a low-skilled, low-wage retail trade job.
Universities should survey former students for five years after graduation, and give that information to prospective students.
That said, however, that is not true for everyone. Not all degrees are equal — a master’s in anthropology or art probably has less incremental earning power than a M.B.A. or advanced engineering degree. If graduate enrollments soar as more decide to stay in school, the newly minted master’s graduates may find the job market not all that much better in a couple of years than at the present, and end up taking a relatively low paid job — and facing much larger student loan debts than otherwise.
Moreover, the cost of getting a master’s degree varies a lot, depending on the school attended, the availability of financial aid, the length of the master’s program (ranging typically from one to two years), not to mention the “opportunity cost” in terms of employment income lost while in school. Some master’s programs will cost a student only perhaps $10,000, while others (e.g., an expensive two-year M.B.A. program) might run over $100,000.
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The new breed of M.S. degree, a Professional Science Masters shows promise of being the MBA of Science. A concept developed by the Sloan Foundation, these are multidisciplinary programs with interactions with industry built in. They bring the promise of new employees being ready to step into a position without taking 3 to 6 months to be trained. For more information go to http://www.sciencemasters.com. for more information.
— DianaMy MSW allowed me to practice independently and does offer me somewhat better pay than a BSW or BA working in the social work field. It also allowed me to move overseas as a “skilled migrant” when a BA degree would have not provided me that opportunity. As they said above it all depends on the field. Whatever happened to pursuing knowledge and personal development without worryig about money?
— AmbroseI think that learning another language and spending time in another culture is much more educational and enriching and inclusive and expansive than traditional Post Graduate work.
By immersion in another language and culture new possibilities open up that were not otherwise available. An international perspective is very empowering in these tremulous times, and lends itself to a peaceful debate rather than violent conflict.
It’s a lot cheaper, it is custom, and the results are life-long. Win, win, win, win. Consider the alternative…
— Jim BoxI just finished my M.A. in the humanities, and am unable to find work teaching at a community college (which is what I had planned to do with this degree). Luckily I had a full fellowship, so I don’t have any loans to pay, but I’m back to where I was before I went to graduate school: jobless, broke, and wondering why I didn’t study business administration.
— SerapliThe pundits seem to agree that an MBA or a master’s degree in engineering is worth the investment in terms of increased earnings, while a humanities MA probably is not (though some allow as how it may offer inestimable, albeit intangible, benefits).
They seem to omit a large number of degree programs from their analyses. Elementary and secondary school teachers often must do postgraduate work in order to make their teaching certificates permanent, and get a bit more pay once they have done so. Social workers and counselors become eligible for licensure only if they earn master’s degrees. Increasingly, the master’s degree is the accepted credential for physical and occupational therapists as well. These and other degrees qualify people for membership in what are sometimes called the minor professions (as opposed to law and medicine). Are they not worth pursuing? Or are they just off the radar for this particular collection of humanities and business types?
— StephenI couldn’t believe some of the anecdotes I have heard from students. Since student loans have become so widely available, there has been no limit to the imagination of universities in making up new degree programs. This has been a cynical exploitation of naive young people. I can’t believe there are so many master’s programs in public policy or international relations. I read a report of a college student coming out of a kentucky university with a master’s in international relations. A no name public school has no business misleading students and essentially defrauding them for personal gain. This student came out of her master’s program with 80,000 dollars total in educational debt and of course can’t get a job. The problem with these watered down master’s degrees, that require no more than a good college term paper as a master’s thesis, is that they devalue the degree and lead to denigration of all degree holders in soft subjects. All these master’s programs and new academic departments have sprung up in response to student loans being given to anyone with a pulse. Universities should be ashamed of themselves. Most in academia know that it is unethical to allow students to deceive themselves as to future job prospects with worthless master’s degrees from no name programs. However, when their jobs depend on maintaining a certain quota of students for a particular program of study, even previously ethical academic types have compromised their ethics in their chase to be recipients of all that loan money.
— billy bobThe only reason that a hospital based recreation “therapist” is now a four year college degree instead of an apprentice program or one year community college program, is because universities have realized they can stretch out these one and two year certification programs into four year degrees and get four years of student loan money instead of just one. This is just one of many examples where short study certificate based programs have mushroomed into four year degrees as a cynical attempt to increase revenue. After all, if the student loan money is flowing so freely why not turn a one year program into a four year degree? These universities should really be ashamed at what they have done.
— billy bobThe Master of Arts degree was intended to prepare scholars for the PHD. It involved an in depth study of the field, and more importantly, the pertinent issues in that field(e.i. what needs to be done) and to acquire knowledge and skills in how to viable research. As such,it is not a terminal degree—it’s academic limbo.
— Martin Camarata, Prof. EmeritusIn my experience an M.A. does not improve the career chances in most professions of the liberal arts. The qualifying degree is the Ph.D. Unless you love the field, do not even think of it. You must like knowledge for its own sake, may end up working for very little money, and still must be convinced that you are doing the right thing.
I agree with Professor Taylor’s assessment of the current state of higher education and have written more about it here:
— Peter Melzerhttp://brainmindinst.blogspot.com/2008/12/financial-crisis-higher-education.html
I hold an ASIE, a BS Technology-Business, and an MBA.
They are worth nothing.
The real value to me has nearly always been the knowlege that came along with the process of getting the degrees. Adding fuel to this position, over the years I’ve often come in contact with degree-holders, and with people having years of experience, who apparently learned nothing from formal education nor from experience.
I’m not a particularly brilliant sort, but I have always quietly enjoyed having a broader view of a more understandable world. Knowlege also brings on the even surer knowlege that I don’t know much at all. In fact, because of my education and experience, I am now sure that I know next to nothing, and that’s a humbling thought.
Rick
— Rick ChumsaeOne way to look at the expense and work that goes into a graduate degree is that it is an investment in yourself. Taylor is correct that the most interesting degrees are not always the most practical. However, I would warn anyone considering a challenging program that you will need to be very interested in what you are studying to complete a master’s degree. My job is normally performed by people with a master’s degree. This expectation is partly because of degree inflation, which, like grade inflation at undergraduate institutions, is real. Six weeks ago, I graduated from Georgetown’s Master of Science in Foreign Service (MSFS) program. The non-economic value of my degree is amazing. For financial reasons, I worked half-time during my studies to avoid the opportunity cost of not working altogether. I agree with Vedder’s claim that not all degrees are created equal, that’s why I chose MSFS. I suppose I’m betting society will value what Trachtenberg would call my “documented competency” in international affairs.
— David HigginsA Master’s Degree is probably a much lesser education than it once was, and the whole program to some extent has become commoditized, which contradicts the very principle of advanced learning. My observation doing an MS program back in the 80’s was that fully 60 per cent of the working adult attendees were purely and solely present to get a ticket-punch on their resume. There was no curiousity about anything except whether items would be on the exam or would earn credit.
In addition, those courses that did touch on business theories all seemed to be absolutely certain that there was no purpose for business except to make money, solely and entirely. This fixation was passed around like an exalted truth, rather than a toxic misestimation. There is no question about the necessity of making money of course, but whether it is sufficient is highly debatable.
It is not surprising that the meaning and weight of the sheepskin has declined under these conditions.
— AHJMost students currently enrolled in university should not be there. They have no interest in higher education and seek only a ticket to a higher-paying job. They belong in vocational school, which unfortunately means that universities are turning into glorified job-training facilities.
And that, really, is what afflicts contemporary colleges and universities. They are obsessed not with educating their students but with preparing them for the job market. They have abdicated their vital role as centers of scholarship and conduits of civilization so that they can perform the same functions as vocational schools.
If the value of a university degree is measured only in the additional income it will generate for the holder, then it’s a waste of time. Undergraduate degrees are losing their status because they indicate nothing for certain about the degree-holders, not even basic skills in reading and mathematics — and certainly not knowledge of history, literature, languages, economics, science, or philosophy. Thus, students race fruitlessly to obtain more and more graduate degrees, which in their turn will be devalued.
If universities are to recover, they must abandon vocational training and rediscover their mission of real education. If some students don’t like that or can’t do the work, then they should attend schools more appropriate to their interests.
— N.S. PalmerWe are saddling our kids with huge, insurmountable student loans for watered-down degrees at diploma mills. And then people wonder why we’re losing the race to the Chinas, Indians, Brazils, Russias, Canadas.
— Bleak FutureMr. Taylor stated: “The next bubble to burst will be the education bubble. Make no mistake about it, education is big business and, like other big businesses, it is in big trouble.”
And Mr. Taylor, higher education as provided by the private not-for-profits is a really big business of really rich universities that basically are getting a free ride on the taxpayers federally, state and locally. Why should these big businesses, and as you noted, these are businesses, not charities, be treated as though they are charities. Some of their administrators and professors make million dollar plus salaries and perks. Unlike other businesses, they also get tax free endowments of hundreds of millions of dollars.
It is time these elitist freeloaders pay their fair share of taxes like every other business in the US.
I also think the US should place restrictions on teaching foreign students advanced graduate studies in sensitive fields that can provide military and industrial advantages to our military adversaries and countries that compete with us in the global economy and which take jobs away from Americans. These fields include physics, chemistry and materials sciences, mathematics, engineering, medical research, computer and software design, etc. The US trained a number of the Japanese before WWII who later developed Japanese offensive weapons that were used to attack Pearl Harbor. We also taught the Japanese business management techniques that were later used against us to destroy many of our major industries or sharply reduce US company market share in the US.
— LetsBfairUSAIs the investment worth the return? Depends on the individual. Someone with an MA in TOEFL can become Dean at a community college, or make enough money tax free abroad to pay a student loan in a year. The commentaries above seem “market-based” and limited
— John McDonald“Not a Slam Dunk: Master’s Degrees.” Funny.
Interesting to me that several of the contributors mentioned “degree inflation.” If our society’s current push for everyone to go to college only results in the goal posts being moved, then the whole thing feels like a kind of scam. I think we need to take the skilled trades more seriously as options for intelligent people - emphasize their connection to science and math knowledge, and once again make these respectable paths that can be taken with pride.
— SEUsing bachelors degrees for gate-keeping into some entry level white collar jobs is unnecessary when the cost of getting the degree is so high, and, honestly, the skills needed for these jobs should be attainable by high school grads.
I say it’s time to take back the high school diploma and make it mean something again. We need to stop pressuring everyone to fork over all of their money to colleges and universities unquestioningly! The honesty of the professors above is truly refreshing!!!
I do have to wonder at this comment by Trachtenberg when he says “Does earning an M.A. (distinguishable from an M.B.A. or other professional degree) ”
An MBA is NOT a professional degree. The degrees classed as graduate professional degrees are soley JDs and MDs and VMDs. And an MBA from a no-name cow-college isn’t worth the cost of the books in the labor market.
Now as to the topic at hand, some fields do require a Masters. Social Work comes to mind as a field that requires a Masters even for ebtry level jobs. Ditto psychology. Teaching even in the elementary through secondary level requires a Masters to advance.
The problem is whether the MA (or MS) is worth the cost. taking the $8000 a year cited above as the income difference, that would work out to be a net of about $5600 a year. If a 2 year MA costs $70,000, it will take close to 13 years to pay it off not including interest.
Entry in to other fields needs a masters in order to narrow the specialization and be marketable. For example, urban planning is such an area.
On the other hand an MFA (fine arts) is a time and money pit.
Soeaking as some who holds a MA in addition to a professional doctorate, a master’s program should be approached with caution. The costs are so high these days. (And if Vedder thinks that a student can do an MA for only $10,000, I guess he assumes the student will not eat and will live in a tent or under a bridge!) If the future earnings are not substantially enhanced by having the MA, it is probably not worth it.
Once again the prospective student needs to contact the placement office and ask the following:
(1) How many graduates from the Master’s prorgam obtain a job in the field
(2) How long does it take for them to find a job
(3) How much do they make starting out
(4) How do the initial earnings of the master’s grads compare with the intial earnings of the departments BA grads who work in that field
On the other hand, if one has money to burn, education is never wasted.
— AnnAAs noted in a few of the articles, this question applies only to liberal arts and the like. For engineering, you want and need an M.S. or Ph.D.
— michaelEarning my MA was among the most fruitful and most rewarding experiences I’ve had, even more so than working on the PhD. Certainly it is a stepping stone of sorts, a way to make sure you would like to pursue something to a higher level (or not). The MA is a chance to delve seriously into a topic or to realize you can’t wait to finish with it and do something else. As with anything, an MA can be as rewarding and fulfilling as one makes it. I personally wouldn’t trade my MA experience—the people I have met and worked with, and the lasting friendships—for anything (including the few grand it cost!). Money spent on education is an investment in one’s life that lasts forever and can’t ever be lost in the mysterious workings of the “market” or stolen in a Ponzi scheme. Besides, most MA programs offer scholarships and teaching assistantships that cover most if not all the costs.
— Joseph PowellToo bad most of the remarks about the “worth” of a master’s degree are about the dollar value. I feel they miss the truth, at least the truth of my life with my master’s. I’ve had mine for almost 40 years, and its worth to me has been the enhanced intellectual and cultural advantages it has conferred. My B.A. was spent among students mostly interested in football, beer, sex, and for the academic side–credentialing. My M.A. introduced me to peers fascinated by advanced study, in love with learning, thoughtful, articulate, cultured, and polite. As a result, the “worth” of my M.A. has been the enhanced, engaged quality of my life.
— BoomerscoutofamericaAs a student completing my M.A. in American Studies, this debate is one that is often on my mind. I am looking to graduation this fall and applying for jobs, but I find that most organizations are much more interested in my internship experiences than my academic background.
But in the end, I value my graduate studies despite their lack of financial or possibly even professional benefits. I attended a prestigious, private university for my undergraduate degree, but my graduate work at my state university is what has ultimately cemented and deepened all of my previous learning. Not everyone has the luxury of completing a degree that doesn’t necessarily lead to more money, but I’m grateful for it.
— Perry, Kansas CityQuoting Mr. Vedder:”That said, however, that is not true for everyone. Not all degrees are equal — a master’s in anthropology or art probably has less incremental earning
There may be some truth to this statement, but I have to disagree that a M.F.A. in art is the same as an MA in the humanities. MFA is a terminal degree and can open doors teaching at the university level.
All these “experts” also failed to note that an advanced degree plays an important role if graduates want to work abroad. Many countries have a point system when awarding visas and education is a significant category. In this global economy, it’s not uncommon that many people now face the prospect of working over seas.
I agree that taking on tons of more debt is probably not the best approach to furthering your education but with a little effort and research you can find options or funding opportunities to help invest in your future.
I think it is also important that students have a little perspective before they just “jump” into a masters program. Often we see students just roll from a Bachelor’s into a graduate program with little or no real world experience. Just a year or two out in the world does wonders in the focus and desire it takes to pursue a higher degree. Too many students wander into a masters program with little or no direction not to mention the energy or appreciation needed to finish.
Jobs may come and go, but an education is something that will always be part of you. If a student spends wisely and takes full advantage of the time, a degree no matter what discipline will always pay off. Our society needs to reinvest in education and allow more students the opportunity to pursue higher degrees with programs, grants and sponsorships to make it happen. Having a population that is too educated is a problem I think we would rather have than the opposite.
— david donarLest we forget - and in this bottom-line oriented society it is difficult to forget - education is not all about fiscal payback. As a recipient of 3 degrees (AB, PhD, JD) I found that each separate level gave me more appreciation of the world in general, more ability to enjoy whatever I could make of the ratrace of existence, a better appreciation of the whole complexity of life. At 75 I am still striving to learn more, not facts but things about life and how to understand them.
— joconnorMAs for liberal arts degrees, I agree, are worthless in all but a few cases. Anyone that wants to actually specialise in their area of practice requires a MA or even PhD in order to even think about getting their foot in the door. Myself included. I work as a humaniatrian aid worker. Although there are those who have joined the field without even a bachelors degree, where I started out (London), you cannot even access internships without at least a MA. Maybe the pay does not match what you have spent on your education, nor does the experience (I found my undergraduate degree, completed in Montreal, more diverse and challenging - the MA was more of a social networking tool). However, in fields such as development or humanitarian relief… it’s a necessary evil and i don’t think that is going to change.
— JB