What’s a master’s degree worth?
Graduation ceremony at Oxford
Associate editor and business partner Tina sends a link to this interesting discussion. The main post itself has several links to relevant, equally interesting posts and conversations.
Given the astonishing burden of student loans that too many young people are saddled with—M’hijito’s roommate’s girlfriend, for example, remarked that she will graduate from a top-quality institution with a master’s degree in international business and $1,400-a-month student loan payments—assessing the “value” of graduate education is not a crass or pointless exercise. It’s well and good to love learning for learning’s sake and so to feel that the graduate school experience is irrelevant to one’s vocational prospects. However, once that graduate school experience ends, you still have to pay for it. You still have to keep a roof over your head, put food on your table, and foot the considerable cost of raising a family. When young people are saddled with five- and six-figure student loan debt, they should reasonably expect the financial investment in graduate education to pay off with jobs that will support them.
University of California, Berkeley
That, unfortunately, is too often not the case. In our current economy, there simply aren’t enough decent jobs (or jobs at all) to accommodate the rafts of M.A.’s and Ph.D.’s that learning factories like GDU crank out each year. Certain degrees make for more employable graduates than others, and some degrees, such as the M.B.A., need to come from a top-tier (read “wildly expensive”) school even to get the holder hired, to say nothing of commanding an upper-middle-class starting salary. And some degrees, to be blunt about it, are simply fraudulent: they’re money-making scams perpetrated by administrators solely to extract as much cash as possible from as many suckers as will bite.
For example, GDU has a much-ballyhooed interdisciplinary master’s degree that has virtually no entrance requirements and virtually no substance. Students in this program, which the university advertises as something that will help working adults get ahead in their careers, pay a $200 per credit surcharge, on top of the regular graduate tuition and various extra charges (all GDU students, for example, pay an extra fee to support the athletic program). Since a standard graduate course carries three credits, every single course you take in this program costs you $600 more than any other student on the campus would pay for it. Students enrolled in the program take a few core courses taught by the program’s director and then fill out their card with electives in regular departments. One elective is U.S.-Mexican border history. A student in this exotic interdisciplinary program may sit next to a History Department graduate student who pays a full $600 less to be in that classroom. Because the program is pretty fluffy and leaves one with a master’s degree in nothing recognizable by another university or by an employer, its value is highly questionable. IMHO, it’s a scam.
That’s not to say you shouldn’t pursue a master’s degree. Or a doctorate, or a J.D., or degrees in nursing, public health, library science. To the contrary. Graduate education has—or should have—real financial value in addition to the intellectual adventure and polish that students rightly expect to gain from it.
After altogether too many years in the ivied halls of academe, I would advise those who are thinking that now is the time to go back to school for a master’s degree, a professional degree, or a doctorate to plan very carefully. You need to develop a two-pronged planning scheme:
1. Intellectual and spiritual planning
The prospective graduate student should ask Why, really, do I want to do this?
• Do you want to pursue a subject because you’re crazy-passionate about it, so much so that you don’t care whether you can ever make a living at it? (There’s nothing wrong with this, BTW.)
• Do you feel a graduate degree will make you look smarter to people who matter to you? (You’d be amazed at how many people with Ph.D.’s wanted, at heart, to prove to someone that they weren’t so stupid after all! This is not a good reason to go to graduate school.)
• Do you want a graduate degree because you hope it will open the door to an interesting line of work, whose pay doesn’t really matter as long as the job doesn’t bore the pants off you?
• Do you want the degree because you think it will open the door to high-paying occupations, whose remuneration very much does matter?
• Is it that, at the grand old age of 28 or 30, you still don’t know what you want to do when you grow up and you’d like to take a couple years in graduate school to figure that out? (Chances are you won’t figure it out then, either—precious few of us ever know what we want to do when we grow up!)
The answers to these and similar questions not only bear on your choice of major, they bear on financial issues, too. To make a just-barely-living wage in teaching, journalism, or library science, for example, requires a master’s degree, but it doesn’t require one from an expensive university. As long as you can put food on your table, a vocation that calls to you need not earn a ton of money. But…maybe it shouldn’t put you in hock for the rest of your life. And surely Tucson, Buffalo, or Austin is as good a place as New Haven to take two years to seek the meaning of your life. On the other hand, if a high-powered corporate career is what you’re after, then you probably need a degree from a world-class institution—a costly program may pay for itself within a few years after you graduate.
2. Financial planning
Bringing your real motives into sharp focus goes a long way toward deciding how much to spend on a degree and how to finance it. First, of course, you now can decide whether you truly need a degree from a prestigious (i.e., expensive) school or whether an in-state public university will suffice.
• Consider that even lukewarm public universities often have one or two first-rate—even world-class—programs. The University of Arizona, for example, has one of the premier programs in astrophysics on the planet. Psychology programs at Michigan, Cal-Berkeley, Illinois, UCLA, Minnesota, Indiana, and Washington rank among the top twenty in the U.S. Cal-Berkeley, NYU, North Carolina, Indiana, Washington, and Maryland’s MBE programs have shown up among the top twenty. Don’t discount your home state’s public schools, especially if you’re in a place in your life where one master’s degree is about as good as another. Check university rankings for schools in your state and for public universities whose out-of-state tuition is more or less within reason.
• If nothing close to home has a program that suffices, investigate universities in other countries, such as Canada, where costs are far more reasonable than out-of-state fees in the U.S.
• Try to get your employer to foot part or all of the bill. Many companies and government employers will underwrite graduate training relevant to the job. Even if you have to agree to stay with the company for a number of years after you finish the degree, that’s more than a fair trade to avoid being saddled with student loan debt for years.
• Look for research assistantships that waive tuition. Tell the program director or whoever is trying to recruit you that you can’t attend unless you get an assistantship or other support that will waive tuition. Remember: graduate students are the bread and butter of most university departments. They want you.
• Failing that, try to get a 50 percent FTE job on the campus. Most universities waive tuition for employees, and often this applies to half-time as well as full-time workers. GDU, for example, considers a 50 percent time job to be “full time,” complete with health insurance and tuition waiver. The waiver is taxed as income, but since you will earn so little, your tax will be minimal…certainly compared to a lifetime of student loan payments. Often this applies only to in-state tuition; bear that in mind if you’re looking at out-of-state schools.
• Some universities will waive tuition for an employee’s spouse. If your husband or wife has a job that’s fungible and is willing to work at the desired college or university, this is a strategy that might make sense.
• If you’re interested in a university in another state, get a job in that state, register your car there, register to vote, and wait a year to enroll. This will establish residency and avoid the outrageous tuition often charged to out-of-state students.
Do everything you can to avoid having to take on student loans, even if it means maintaining your dreary day job and taking coursework online and at night. If you possibly can get by on a part-time income, tighten your belt for the two to four years it will take to complete a program while you work. That’s a hard row to hoe, but well worth the goal: completing the degree free of debt.
Finally, I’d add one more bit of advice:
Caveat emptor!
Investigate and think carefully about any degree program before enrolling—no matter which institution offers it. Some otherwise respectable universities have gone into the diploma mill business—under pressure from legislators and alumni to compete with outfits like the University of Phoenix, university administrators and boards of regents crave to operate their institutions on a business model, even though education is not and should never be a business.
Any degree program that does not require the GRE, the GMAT, the LSE, or a similar entry exam is suspect. My university, for example, offers a very respectable Master of Business Administration, for which applicants must submit GMAT scores. It also offers several knockoff low-residency and online versions of the MBA, none of which require an entrance exam of any kind. Savvy employers know the difference.
Any fully online degree program should be regarded with deepest suspicion. Any low-residency program should be approached with caution. Any interdisciplinary program that leaves you with a strangely titled degree (”Master of Liberal Studies,” for example) should be avoided. These degrees may get you a perfectly fine job. Maybe not, too.
If higher education is a business, then students are consumers, and they should use as much care in buying the “product” as they do in buying a refrigerator or a dishwasher.
Images:
Oxford University, Andrew Yong at Wikipedia Commons
U.C. Berkeley, Tristan Harward, at Wikipedia Commons, ShareAlike License
Moments of Fame
Green Panda Treehouse hosts this week’s Carnival of Personal Finance with many pictures of the photogenic stars of Burn Notice. Funny’s first installment of Entrepreneurs made the current line-up. Quite a few great posts here, as usual; I especially enjoyed these:
• Amateur Asset Allocator compares REITs and rental income properties.
• Mr. Tough Money Love, my favorite crusty old conservative, has an apposite post on the costs of homeownership.
• Budgets Are Sexy writes a nice article on measuring your own financial success.
The interesting Canadian Finance Blog hosts the current Money Hacks Carnival and kindly includes Funny’s most recent refinement on microbudgeting. While you’re at the carnival, don’t miss these:
• Fiscal Geek reviews an open-source password management program.
• Discover Debt Freedom tells how to figure your credit score.
• At the Paycheck Chronicles, Kate Kashman has an interesting rumination on the question of how much income it really takes to get by.
Is this for reals?
For a good laugh, check out this amazing performance.
Now, we all know what Fox is…but do you think it’s really a newscast? The talking heads don’t look like SNL performers. Is it a joke, or is it Third-World-style journalism: can’t afford a real film clip or a trip to the zoo for the camera crew, so let’s punt?
Six-thirty in the morning and it’s already 90 degrees outside. Gotta go rescue plants. Later!
Sky still in place
The turquoise-blue Arizona sky hasn’t fallen yet, though we wait for the occasional asteroid to hit the ground. The governor has called the legislature back into a special session, in hopes of getting something more like her way in the fight over the budget. Meanwhile, most state agencies (what remains of them) were open for business today.
An Arizona Republic reporter passes along something amazing, however. If the state fails to pay our salaries tomorrow, we’ll get a nice bonus:
A shutdown would harm the state’s credit rating, making it more expensive for Arizona to borrow money in the future, [State Treasurer Dean] Martin said. And if the state can’t make its $85 million biweekly payroll Thursday, federal law says the state could have to pay triple the amount, up to $255 million, to state workers as a penalty.
Well, in the case of university employees, nonpayment is unlikely to come to pass. Our college’s business manager says this week’s payroll has already been processed. If direct deposit is automated, as it almost certainly is, we should see our paychecks sometime tomorrow.
Besides, if the legislature (and governor) stink like dead fish now, just imagine the effect they’ll have on taxpayers when the state has to shell out $170 million dollars more than is actually owed to its workers! It won’t just be state employees and July 4 vacationers turned out of campgrounds who’ll be trying to vote the rascals out of office. Although the parks reopened this morning, most campers were rousted out yesterday afternoon.
It’s quite an Independence Day spectacle. More fireworks are on the way.
You couldn’t make this stuff up!
In the wee hours of the morning, past the midnight deadline for shutting down the state government, our august leaders in the legislature passed an excruciatingly bad budget. That doesn’t mean, however, that we’re rescued, because the governor still has to pass or veto it. And there’s a good chance she will veto, because they took out her one-cent sales tax hike.
Local reporting here is so poor it’s hard to get a straight story—or much of any story—about what’s going on. Apparently they also took out the proposed flat tax, but getting details isn’t easy; the Arizona Capitol Times and the Arizona Guardian, which report decently on statewide issues, are by subscription only, so you can’t get into the story past the lede. The Repulsive offers a few details on its website, ruminating on whether the governor will veto or not (she has threatened to veto any bill that doesn’t include a sales tax increase) and reporting in a cursory way about the massive cuts to education and health care this thing entails.
Brewer (the guv) has ordered that state operations continue as usual and told state workers to appear at work on time this morning. Some observers think that indicates she intends to sign at least part of the bill. The Guardian suggests she’ll veto all but one of the package, leaving just enough in place to keep the government running for a while. She has ten days in which to make a decision.
One of the liveliest political bloggers in these parts drove up from Tucson to attend the legislative session, which went on past 1:00 a.m. According to him, the Democrats forced voice votes on a series of proposals to ameliorate the most vicious effects of the retrograde budget package, which of course the Republicans knee-jerked down—providing plenty of grist for the 2010 elections.
Meanwhile, most of the state’s parks, except for a few where local municipalities volunteered to oversee them temporarily, have already closed down. The Republican party, evidently grasping the implications for its political future, is calling for increases in clean election funding and in the amounts PACs can contribute to candidates by way of helping out prospective GOP candidates.
As for my own Beloved Employer, the prez sent out an e-mail telling everyone to report to work as usual and claiming that only 25 percent of the institution’s funding comes from the state.
Arizona State University, which has nearly 20,000 students attending summer classes and programs, more than 10,000 staff and students involved in research supported by a wide range of funding sources, and 70,000 students arriving in 6 weeks for the fall semester will remain open for service during this period of financial decisions by our partner, the State of Arizona.
More than 75 percent of ASU operating revenues come from sources other than the state of Arizona. Specific tuition driven and research driven revenues fund our summer operations. As a result we will focus our attention relative to state funding interruptions on our planning for the fall semester.
A state government shutdown lasting through the opening of the fall semester on August 24 would impact staffing and program availability significantly.
The exact impact and the ability of the university to operate normally will be evaluated on a weekly basis moving forward.
In the interim all assignments and work of the university will move forward.
Evidently intended to stave off panic, this missal is full of speciousness. Twenty-five percent of the university’s budget is huge, more than enough to shut the place down. It is, after all, a state university, not a private college. And it has already sustained cuts that have forced it to can hundreds of workers, closing down entire academic programs. The likelihood that the state will shut down and stay shut down through the middle of August, when fall semester begins, is nil. But that little bit of drama does allow him to segue quietly to the remark that operations will be reassessed on a week-by-week basis. In other words: at any time you could be laid off…
My paycheck notice is online, but it remains to be seen whether the money actually will be deposited in the credit union on Thursday. I’m expecting it will. But as for next payday: it’s anyone’s guess.
Education: We are what we sow
Uhm…I guess I’ll have to rescind my ire at the remark by one of our state legislators that teachers are feeding at the public trough. Now, bear in mind that the Goldwater Institute is a conservative think tank, and as we all know, it’s pretty easy to slant a survey. But…hevvin help us, take a look at this. After you’ve run your eye down the list of very basic questions the surveyors asked Arizona high school students, go on to page 2 for the eye-popping results.
Don’t believe it? I wouldn’t, either, if I hadn’t asked a roomful of university juniors and seniors to brainstorm a list of important events that happened in the U.S. during the nineteenth century. World War I made the list. What didn’t make it? Emancipation. The Spanish-American War. The Gadsden Purchase. Lewis and Clark’s expedition. The War of 1812. Construction of the Erie Canal. Nat Turner’s revolt. Assassination of Abraham Lincoln. War with Mexico.
None of those. Didn’t happen. Or if they did, we didn’t notice.
Well. Bring up ignoramuses, and they elect ignoramuses to state and federal office. Explains a lot, doesn’t it?
Maybe there’s method in our state legislators’ madness…
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