Did you know? Women have outnumbered men on campus since the late 1970s. (You go, girls!) 

However, it’s also true that women hold ⅔ of student loan debt. (CNBC)

That’s no surprise when you think about it. The price tag on some 2 year, full-time graduate programs can be over $100,000. (US News)

So, if you’ve been thinking about getting that extra degree in order to advance your career, read this post first.

👀 8 min read

📸: Zalewski Architecture Group

We’ve crunched the numbers for Masters programs in Business, Education, Med, Arts, and Tech/Engineering to answer the question: is it really worth the investment?

Let’s find out!

The quick math for post-grad degrees 

Rule of thumb: 

The cost of your post-grad degree should never be more than your post-grad salary. 

• If the degree costs $30k, your salary should be DOUBLE, at least $60k. 
• If the degree costs $50k, your salary should AT MINIMUM be $100k.
• If the degree costs $100k, your salary should AT MINIMUM be $200k. 

See the theme? Double the cost. Look up the average salaries. Compare the numbers. 

Keep in mind, this quick math of doubling the cost is just the bare minimum. 

The *real* math includes living costs and all that random stuff you still have to pay for while you’re studying, like: 

• textbooks and school supplies (about $1k a year)
• healthcare (about $5k a year)
• clubs/extracurricular expenses (about $500 a year)
• food, including small group dinners and coffee chats with your fellow students (about $1k-2k a year)
• loan interest accrual (with COVID, interest is likely *not* accruing, but if things go back to “normal” soon, the interest will rack up fast!)

Not to mention other things that might apply to you, like moving costs, travel budget, special classes abroad, etc. Add those to the cost of the degree!!!

Plus, you’re doing all this without an income -- because if you are going to school full-time, you won’t be making any money (or very limited money on a part-time salary). 

So, if your degree costs “only” $30k... Realistically, you’ll need much more than that, because you’ll need money to pay for things while you’re studying.

And even if you make the “right amount” post-grad, it’s not like you can use your full salary to pay off your loans immediately. Again, you still need to factor in taxes, living expenses, and so on after you graduate. 

Get it? Cool. Onto the real question!

Should you go back to school?

The short answer: No. Probably not.  

Unless you are becoming a doctor, psychologist, teacher, or similar… AKA a job where you NEED that extra degree to simply stay employed… Don’t do it.

Why? 

The numbers just don’t add up.  And we’ve calculated it in every way! 

But before you get all, “but Penny, I thought you believed in education!” -- please know, we are not anti-grad-school. We fully support learning in all its forms.

However, we do NOT support decisions that are not financially savvy. Especially if they might result in hundreds of thousands of student debt, for very little (or zero) reward.

For example: 

Penny’s founder, Crissi, completed a Masters in public policy at night while working full-time. 

Did the cost & time she invested actually translate into real dollars? 

Not really. 

Of course, she loved learning and having something other than work to focus on. But financially, the cost-benefit analysis just wasn’t there.

Unfortunately, that’s the case for a lot of ladies out there too. A study from the NY Times depicts this sad reality:

“Women are over-represented in low-paying professions that require college credentials.”

``

Translation:

No, your degree will not & does not guarantee you a high-paying job in the future. F… :/

Does that mean it’s true for every single degree and profession? Nope!

Sometimes, it’s different. That’s why we looked into a few of the most common degrees, budgets, and tuition -- and we did the math for you. ;)

Every profession is different. What about yours? 

The WSJ just did a piece on Masters degrees that don’t pay off. 

Like, film-makers who spent $181k to go to Columbia, and then got jobs with average salaries of $30k. Uhm… No matter how you look at it, the math just doesn’t add up. We feel for ya, people. 

But does it make sense for you and your industry? Let’s take a look.

You’re getting a Master in Business (MBA)

The Graduate Management Admissions Council reports that MBA graduates earn an average starting salary of $115,000. 

(We thought it would be muchhhh more than this! Business degree = serious dough, right? Apparently not.) 

Let’s crunch the numbers.

• $200,000 salary >> let’s assume you get a BOMB job after you get that MBA, far above the average salary of $115k, cuz you’re that awesome ;)
• $75,000 taxes >> yup, don’t forget about this – read your pay stub to see where it goes
• $50,000 expenses >> estimated city living 

Based on these numbers, when you get your degree:

You’ll have $75k each year left over to pay the average $120k your degree costs, and to make up for the $200k you left on the table. (Since you were making $100k cash money at your bomb job, but you went back to school for 2 years.)

It’ll take you 2 years to pay off the loan, and 5 years to break even, without saving a dime. 

Doesn’t sound like a long time, 2 and 5 years is pretty good for debt gone. 

BUT the big question to ask yourself is: could you still make that $200k without getting the degree?

Could you still progress in your industry or company? 

Could you negotiate with your employer to pay for your MBA instead? 

...Probably yes, yes, and yes! 

So think twice before you pay for that MBA. You can invest that $120k in the stock market instead and make money while you sleep ☺

You're getting a Masters in Education or Medicine

Masters are *usually* required to become a teacher, nurse, psychologist, professor, school counselor, speech therapist, etc.  

So it’s really hard to do a cost analysis when you NEED the degree to keep or to get the job. 

But we did it anyway:

• $120,000 salary >> let’s assume you get the average nursing job (BLS estimates an average of $117,670)
• $36,000 taxes >> yup, always gotta pay taxes
• $40,000 expenses >> when you add it up, kinda makes you feel sick huh?

Based on these numbers, when you get your degree:

You’ll have $44k each year left over to pay the average $45k it cost, and make up for the $34k you left on the table (since you went back to school for 2 years full time). 

This one makes more sense, actually.

The average RN makes $77k, and the average NP makes $111k. This industry pays a premium that matches up with the cost of the grad degree. Spend an extra $40k, to make an extra $40k per year. 

Teachers and professors, however, beware! We know the extra degree is important for your career, but do your research and money planning first. 

Your salary may increase very little (or not at all) depending on where you live/work, so be sure to crunch the numbers before you jump into a program you need, but can’t afford.

You’re getting a Masters in Arts 

Think Film Studies, Fashion Design, Writing, Graphic Design, Communications, Performing Arts, Game Design. 

• $50,000 salary >> let’s assume you land a Graphic Designer role after getting your MA or MFA
• $10,000 taxes >> always and forever, taxes 
• $28,000 expenses >> if your rent is $1,400 

Based on these numbers, when you get your degree:

You’ll have $12k each year left over to pay the average $30k your program cost. 

Before you had this degree, you may not have had these skills at all or been in this industry, so it’s hard to estimate what you may have left on the table from not working while studying. 

Similar to the other scenarios, this is about estimating the pay you can demand for your skills and comparing that to what it cost you to get this. 

If this gal is you… It’s likely you can pay off your loans in 3-5 years. And you might now have your dream job, as well as some hard skills you wouldn’t have had otherwise. Of course we’d support that. 

Bottom line? Before you hit *send* on any applications, repeat this mantra:

Know the numbers. Know the numbers. Know the numbers. 

And go crush ‘em, girl!

You’re getting a Masters in Engineering or Tech 

Developers are one of the most sought after skills in today’s world. 

• $100,000 salary >> let’s assume you land an entry-level software engineer role after going back to school  
• $24,000 taxes >> always and forever, taxes
• $30,000 expenses >> if you are the average gal in America!  

Based on these numbers, when you get your degree:

You’ll have $46k each year left over to pay the average $80k it costs to do a 2-year degree in computer science... While you could get paid exactly the same amount without the degree. 

High cost, same high salary = not worth it.

Right now, the demand for engineers is so great that having an advanced degree may not be necessary. 

You can learn to code on the job, or through coding bootcamps that don’t require a 2-year stint in grad school. 

Within the tech, comp-sci, and engineering fields, experience in the real-world is potentially better, and can yield the same results for your career (and your wallet).

Think about your job, your industry, your competition: 

Do you *really* need that degree -- or do you need the skills? 

Can you get real-world experience through paid or unpaid internships? Bootcamps? Freelancing? Building your own portfolio of websites and software in your free time?

Let’s get you to make that money the fastest, without breaking the bank ya? ;)

At the end of the day...

No matter what you choose to do, the decision is ultimately yours. 

We just want you to keep the numbers in mind, and to compare how much you are spending versus how much more you are making. 

• Spending $30k to make $100k – Hell ya
• Spending $181k to make $30k – NOPE
• Spending $50k to make $50k – Sure
• Spending $100k to make $120k – Maybe 

The numbers have to be close! 

If they aren’t, then you can’t really argue that the investment in extra education was worth it. 

Even if it gives you amazing new experiences, friendships, networking opportunities… The loans can be suffocating, and we don’t want that for you. Ever!

It’s a hard decision, and one we just want you to think about a little bit more. 

Do your research first, and know your numbers. You got this!

PS. This is a great article from the Wall Street Journal that lists just about every school in the US and what your debt to income ratio will likely be after you graduate.

PPS. Need help doing the math for your post-grad education? Penny has smart calcs built just for you. Start with the money maker quiz

Want more money #inspo?  Follow us on Insta @startwithapenny

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