If you think saving up money to attend graduate school is going to take you one step closer to a millionaire, you might be right. Students who continue their education after their undergraduate degree is completed are the ones who will probably end up with higher salaries in the long run, said Beth Ingram, a professor of economics at the University of Iowa.
“On average, graduate degrees are certainly something that pays off in terms of income,” Ingram said. However, Ingram said students should not expect to simply be admitted to a particular graduate program and miraculously receive a hefty salary once they are holding that higher degree in their hands. The median annual household income is $65,922 for people who hold a bachelor’s degree, according to the 2000 census. Those households with someone holding a master’s degree earned an average of $77,935. That leaves the question: are the extra years of school worth almost $10,000 more a year in pay?
Two researchers at Stanford’s Graduate School of Business released a study in August 2002, arguing that a master’s degree in business administration does not teach students anything useful in the “real” world of business. They also say that the master’s degree has little effect on salaries in the long run.
In response to this claim, which upset many MBA programs across the country, the Graduate Management Admission Council sent out a study saying that MBA graduates were averaging a starting salary of $77,000,up from an average of $50,000, which they reportedly earned before they pursued the higher degree.
Something else to think about while considering furthering your education: the sheer cost of the extra years of tuition. Some students borrow up to $100,000 in order to pay for a two-year program, according to the Stanford researchers.
For Jennifer McDermott, a junior at the University of Illinois, the idea of not going to law school hasn’t even crossed her mind.
“It’s better just to have that advantage over other people,” McDermott, a political science major who said she knows the extra school will cause her a ton of debt. “With the economy being so bad right now, putting off going into the real word for three years can’t even be that bad.”
Everybody has a college degree now, said McDermott, who is 20 years old. She wants to do anything she can to put herself “above” others who will eventually be vying for the same jobs as her.
“Competition is everything these days,” she said. “And you have to have the right tools in order to compete. It doesn’t matter about the money when you’re young because when you’re older you know it is going to pay off.”
Ingram echoes McDermott’s view. She said if a student takes out a school loan for $60,000, for example, the higher salary would then end up paying for the education in about four years, which is worth the extra time in school.
However, some students think that going to graduate school will miraculously open doors that an undergraduate degree cannot. “I’m going to graduate school because I don’t know what else to do,” said Joe Plambeck, 24, who graduated from the University of Iowa last May. “I don’t even know if this means I’ll make more money, but hopefully it will help me find a job-period.”
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