February 24th, 2010
What’s a Degree Worth? Master’s Degrees Could Be the New Bachelor’s
Earlier this month, the Wall Street Journal put out an article on the real value of a college degree, and it’s made a bit of a splash around here. From the private thoughts about the worth of personal student loan debt to the more open denouncements of the data used for the article, people around here are emailing and chatting like mad.
Remembering a Life Lesson: Census Bureau Salary Numbers
The first time that I saw the numbers, which have upset everyone around here by being called into question, I was in a remedial English class at a local high school. It was a few years ago, and I was covering a class for one of my fellow teachers. I didn’t know his students or his student teacher, a fired-up, ex-military type who’d become completely fed up with the students who didn’t care. It was the last period of the day, and he and I had been getting on a student’s case for refusing to work.
I’ve heard some depressing things come from the mouths of babes, as it were. I once heard a 13-year-old lean over and tell her friend that the party was cancelled because she’d “gotten a DUI when [she] crashed [her] dad’s truck”. What the student refusing to work said was not new nor even very shocking. It was something about not caring about school, about not being able to wait until he was old enough to drop out legally.
Mind you, this student had some very blingy bits on (presumably not real), and his big reason for not wanting to go to school was that he wanted to start working and making some money (presumably to buy more blingy bits and fashionably over-sized clothing covered with giant brand names). The student teacher and I had taken turns talking with the student–to no avail. I was trying an “I know how you feel” approach when the student teacher had begun to spout statistics from his laptop’s screen. The one that seemed to actually resonate with the disenfranchised, money-hungry youth? That if he didn’t graduate from high school, he’d make more than $1 million less over his lifetime than his peers walking across the stage at graduation–and almost $2 million less than a college grad.
I never went back to that classroom, and I have no idea what happened to that student. In my heart of hearts, I’d like to think that he got a diploma of some kind and is doing well. I’d put money on this not being the case, but then, I’m a cynic.
Like everyone else, I knew that more education meant more money. I knew it because I’d always been told it, not because I’d ever heard a number. I enjoyed having some governmentally collected data that I could throw in the face of prospective dropouts, which is why I found it so unfortunate when these numbers came into question recently.
What’s a Degree Worth? More Than Money
Now, as a graduate of a liberal arts program–and much to my parents’ chagrin at the time–I had accepted that my degree wasn’t going to make me rich. In fact, I remember explaining to my father that while electrical engineering would make me a lot of money right out of school, I didn’t want to be stuck in a cubicle designing electronic thermostats–I was fine with the prospect of living the life of an ascetic academic, and I’d be better for it. I never finished the electrical engineering degree, so I can’t speak to what my life would have been like, but life with my English degree has been rather pleasant, and I wouldn’t trade it–or the wonderful friends I made in my degree program–for anything but more of the same.
An education is worth more than just that degree. Were it not for the things I experienced during my college years, I’m certain that I’d be a very different person. I won’t continue down this hypothetical path, but I will reiterate that getting a degree has made me a different–and arguably better–person. I read things that I wouldn’t have otherwise picked up, which helped give me a different perspective.
My point here is that, before we dive in to discussing the newest numbers on the worth of a degree, we should remember that the worth of a college degree isn’t necessarily something that should be measured by numbers alone.
Progress. The Master’s Is the New Bachelor’s Degree
It’s my understanding that back in the day you could get a good job without ever graduating from high school. Graduating from high school made you stand out from the pack; it was–again, as I understand it–like earning a bachelor’s degree. Think of it like educational attainment inflation. We’ll come back to this in a moment.
First, a look at the numbers that are troubling everyone. From the Wall Street Journal article:
Dr. Schneider [a vice president of the American Institutes for Research, a nonprofit research organization based in Washington] estimated the actual lifetime-earnings advantage for college graduates is a mere $279,893 in a report he wrote last year. He included tuition payments and discounted earning streams, putting them into present value. He also used actual salary data for graduates 10 years after they completed their degrees to measure incomes. Even among graduates of top-tier institutions, the earnings came in well below the million-dollar mark, he says.
And a little later on…
The $800,000 number, it turns out, was pulled from a footnote of the College Board’s 2007 “Education Pays” report that explained lifetime earnings. The report’s author, Sandy Baum–an emeritus Skidmore College economics professor who didn’t write the promotional text on the Web site–says that $450,000 is actually a more reasonable estimate of the difference in lifetime earnings, something she’s said in interviews for more than a year.
An excellent lesson to learn from this little debacle is that quoting hypothetical numbers will only come back to bite you, so rather than engaging in that particular exercise, I’m simply going to reassure. If you want your resume to stand out, don’t stop at a bachelor’s, particularly if your degree’s acronym ends in an A… for arts. A huge number of fields require at least a master’s degree to be successful–some even require it for entry-level positions.
If you’re in one of these fields, you must, at some point, have discovered this fact. If you stopped at a bachelor’s degree that’s got you making jack and up to your eyes in student debt, perhaps another two years of school is in order. Getting your master’s degree is going to be a rewarding experience, even if it may take a while to reap the monetary part of the rewards.
Your Degree’s ROI
Return on investment (ROI) is important to consider when it comes to education. Take for example the case of the student with a degree in art history. This student only wants to go to school to make more money. When it came time to pick a major, art history sounded great–after all, a degree is a degree, right? The student graduated, but he quickly found that his degree was not actually going to help for a huge number of jobs, and the ones that just required a bachelor’s degree, not a specific one, didn’t actually pay well. Whoops. Now, angry at the world, the student works a dead-end job to pay off students loans. This is an example of a low-ROI degree, but only because the return that the student was looking for was cash. With some research, he would have found the logical disconnect–no work means no money, no matter your degree.
I was once told that the purpose of a Western education was to allow the recipient, upon graduation, to effectively challenge everything s/he was ever told. If this isn’t your goal, for everyone’s sake, go into one of the more monetarily oriented fields. Maximize your ROI with online education, which can often provide you the degree you need for the salary for less in tuition and related costs.
