Pursuing a graduate level degree can definitely give a boost to one's future earning potential, but new research from Georgetown University shows it isn’t always the greatest long-term investment.
“Generally, there are two kinds of graduate degrees,” says Tony Carnevale, director of Georgetown’s Center on Education and the Workforce. “One is a graduate degree you’d better get or you’re not going get a solid middle-class wage, like psychology and humanities...and in other cases, like in business, one that you don’t have to get but if you do, you’ll probably earn more.”
For "The Economic Value of College Majors," Carnevale and his team analyzed U.S. Census data on earnings for more than 130 majors. They found that the graduate degrees that had the lowest payoff in terms of potential earnings boosts were petroleum engineering (graduate degree holders actually saw their median wage earnings drop by 5%); architectural engineering (only a 2% bump); and pharmacy and pharmaceutical administration (they earned 4% more). This doesn’t necessarily mean these fields won’t lead to higher pay — engineering and pharmaceutical majors are among the highest-earning college graduates overall, with median salaries well in the six-figure range. It simply shows that, eventually, the potential financial value of higher education begins to wane.
Advanced degrees paid huge dividends in other fields. Biology and life science graduate degree-holders earned 63% more than those who settled for Bachelor’s degrees alone. Physical science grad students got a 50% earnings boost, followed by social sciences (44.6%); humanities and liberal arts majors (34%); and psychology and social work (33%). You can delve deeper into Georgetown’s data using this interactive tool, which lets you search future earning potential by area of study.
But before graduate students ever see the fruits of their labor, they first have to face the fact that more school almost always means more debt. Over the last decade, student loan borrowing rates among graduate students have risen from $38,000 to $57,600 on average, according to a report by the New America Foundation. One in four graduate students will wind up borrowing at least $100,000 and 10% will borrow $150,000 or more.
“If you’re going to go to graduate school, you need to get as much information as you can on what the career prospects are and what it’s going to cost you,” Carnevale says. “You don’t want to make your loans too big, especially if you’re not going to be too big of an earner."
'The degree itself matters less and less'
When it comes to Bachelor's degrees, Georgetown found that students who pick higher-earning majors — STEM (science, technology, engineering, and mathematics) and business fields lead the pack in earnings, to no one’s surprise we’re sure. While the typical college graduate will earn $1 million more over their lifetime than a high school graduate, STEM and business majors stand to earn $3.4 million more.
Compared to all college graduates who earn $37,000 annually at the entry level, STEM majors earn $43,000 a year; arts, liberal arts, and humanities majors earn $29,000 annually. And these majors have implications over the course of careers: STEM majors’ annual wages grow by $21,000 from early to mid-career, while those who major in education, psychology, or social work, for instance, see their annual wages grow by only $8,000 over the same period.
The only two non-STEM majors that crack the top 25 highest-earning list are economics and business. That might explain why business and STEM fields are the most popular among college students — 46% graduate with degrees in these fields.
Arts and humanities students have the lowest earnings potential. Lower-earning degrees include education fields (median salary for early childhood education majors is $39,000); human services and community organization ($41,000); studio arts, social work, teacher education, and visual and performing arts ($42,000); theology and religious vocations, and elementary education ($43,000); and drama and theater arts and family and community service ($45,000).
“The degree itself matters less and less in an economic sense,” Carnevale says. “One of the only ways you can arm yourself in the world is to try to figure out what your education is worth because you’re going to pay for it.”