Graduate school has never been more popular. The number of adults whose highest degree is a master's has more than doubled since 2000, from 10.5 to 23.6 million. And there are advantages to an advanced degree. A 2019 report from the Bureau of Labor Statistics projected jobs that require a master's degree would grow faster than any others. Plus, workers with a master's degree have median earnings 18% higher than those with just a bachelor's degree, according to BLS.
But that additional education can come at a high cost. A recent Wall Street Journal article examined examples of master's degree programs that saddle graduates with high debt for careers with low earnings. "Financially hobbled for life" was the way Columbia University grad Matt Black described his situation to the paper, detailing a $331,000 loan balance for his master's degree in film and an income of $60,000 "in a good year."
While Black's case is extreme, graduate school loans are on the rise. Federal graduate loans were up nearly 7% in the 2017-'18 school year from seven years before, while undergraduate loans decreased 21% in that time.
Master's students graduate with a median of $41,000 in debt, according to the most recent data from the Department of Education. That figure doesn't include any debt accrued from previous degrees.
To find which master's degree programs have the best return on investment — meaning, the fields in which employed grads earn the most compared to the debt they incurred to earn the degree — Grow calculated the median debt and earnings for 128 fields of study from the Department of Education's College Scorecard.
Six of the top 10 degrees where recent graduates make the most money compared to the debt they owe are in engineering, a field with median salaries that range from $84,000 for an agricultural engineer to $137,000 for a petroleum engineer, according to the Bureau of Labor Statistics.
Other high-paying, lower-debt disciplines include education, which has six fields in the top 40, computer science, which has five in the top 40, including three in the top 12, and health, which has four in the top 40.
Even if you're not looking to enter one of the top 10 fields, there is still a good chance graduate school can pay off for you. Of the fields Grow analyzed, 72% had earnings-to-debt ratios higher than 1, meaning the median salary two years after graduation is higher than the median debt from the degree.
These include many engineering, health, and business disciplines, as well as areas such as public administration, social work, and library science.
Choosing a program where your income after graduation will be higher than the debt from your degree is one of the most important factors when considering a graduate degree, says higher education expert Mark Kantrowitz: "If your total debt is less than your annual income, you should be able to repay your student loans in 10 years or less."
That calculation is not absolute, Kantrowitz adds. Whether you currently have a job or not, and how much you're making with just an undergraduate degree, also factor in. "If you're going from having no job to having some job, then maybe a graduate degree will be worthwhile," he says. "But if you already have a job, or the ability to get a job, you have to look at whether [grad school] is going to improve your ability to earn an income."
Don't just consider the salaries in your chosen field. Look at whether there are jobs available. Because the Department of Education salary data only factors in graduates who are working, it doesn't give the full picture of grad employability. Use resources such as job boards and contacts in the field to get a sense of how easy or difficult it might be to find a job after graduation.
Also be aware if the jobs in your field tend to require an even more advanced degree. Teaching at the college level, for instance, often requires a doctorate. If you do plan to continue on to a higher degree, it's even more important to make sure your master's is cost-effective.
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Graduate students rely more heavily on loans to fund their degrees than undergraduates. They make up just 15% of those enrolled in higher education but account for 40% of federal loans issued each year, according to a report from the Center for American Progress.
Unlike undergraduate federal loans, the federal Grad Plus loan program has no hard cap on the amount students can borrow, allowing them to take out enough to cover the full cost of attendance charged by the school. Federal graduate loans also currently have interest rates 1.55 percentage points higher than those for undergraduates.
So it's important to plan carefully and look at ways to lessen the debt load. Here are three strategies to consider before going for that higher degree.
1. If you can, keep working and take advantage of employer tuition reimbursement
If you're able to enroll in a part-time graduate program and continue working, doing so can be smart. This will allow you to use your income toward school and living expenses and not miss out on several years of earnings while you work on your degree.
You can also consider attending graduate school online. "Online degree programs can be just as costly as an in-person program, however they do offer flexibility," says certified financial planner Mike Ramirez, a college planning specialist with EP Wealth Advisors in San Diego. "Being able to continue to work full time while also working towards a graduate degree can help alleviate some of the financial stress of tuition payments."
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Keeping your job also allows you to take advantage of any tuition assistance benefits your employer may offer. More than half (56%) of employers offer this benefit, according to the Society for Human Resource Management. Recently, large employers including Target, Walmart, and Starbucks have introduced programs to help employees pay for higher education.
While this approach could lower your debt load, juggling work and school can be challenging, and Kantrowitz says there's evidence that part-timers are less likely to finish their degrees.
2. Apply for scholarships, fellowships, and assistantships
You might think about scholarships as an effort for high school seniors, but there are plenty for graduate students, too. College prep expert Kristina Ellis won more than $500,000 in scholarships that paid for her undergrad and graduate degrees. "There are literally billions of dollars getting away every year," she recently told Grow.
About 15% of grad students' costs are covered by grants, fellowships, and scholarships, according to a 2017 Sallie Mae report. University aid represents the largest share, at 10% of costs, but private scholarships and state grants also come into play.
Assistantships are often funded by individual faculty members' research and typically include requirements to teach a certain number of classes or work as a research assistant. In exchange, they cover all or a portion of tuition and fees, as well as a stipend for living expenses.
3. Look into public-service loan forgiveness
If you're going into a field such as education or social work, consider pursuing public service loan forgiveness. To qualify for PSLF, you must work full time for the government or a nonprofit organization and make 120 qualifying payments under an income-driven repayment plan.
The program has gotten a "bad rap" in recent years for denying many applicants, Kantrowitz says, but a significant number of borrowers who have been denied weren't qualified because they hadn't yet been in repayment for 10 years. If you choose to pursue PSLF, Kantrowitz suggests you review the details and be sure you're committed to your career for the full 10 years.
Going to graduate school can be expensive and still worth the investment. Researching salaries and job opportunities in your chosen field and exploring all options for funding before taking out loans can help ensure you're not saddled with too much debt.
Use the table below to compare the earnings and debt for the 128 fields of study that Grow analyzed.
The Department of Education does not report all data for smaller programs due to privacy concerns and we omitted fields of study with fewer than four programs reported. Debt data includes only federal student loans for 2018 graduates. Earnings data is from the same year, for 2016 graduates who are currently employed.