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Master's degree is the biggest scam in higher education, college

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It’s the graduation season. In the past few weeks, about 2 million college students have earned a bachelor’s degree and have taken the next step in their lives. For many, the next step is … going back to campus and perhaps getting a master’s degree in a graduate program. And for a significant part of them, the decision turns out to be a catastrophic error.

Millennials and Gen Z are said to have a master’s degree as a new bachelor’s degree. That is, the minimum level of education required to get a prestigious, high-paying job. However, according to new research, this advice is at best misleading and, at worst, ironic. Not only do many master’s degrees fail to fulfill their promises of better employment, but they also impose devastating lifelong debt on well-educated recipients.

In 2020, more than 3 million students enrolled in the graduate program. This is one million more than in 2000. Over the last 20 years, the number of master’s degrees awarded has almost doubled. And as the number of master’s students soars, so does their share of student loan debt. Master’s degree students make up only 12% of all college students, but a high degree tag means that they bear 26% of all student debt. Bachelor’s degree students with a federal loan have an average of $ 32,000 in debt upon graduation. Master’s students owe $ 65,000.

This high debt, combined with the often modest earning potential of many advanced degrees, means that many master’s programs do not make financial sense. Despite a flashy degree, you will pay more without earning more. So why do so many people continue to waste money on these worthless papers?

Winners and losers

Looking at the revenue data, it’s easy to see why so many millennials and Gen Z are attracted to graduate school. A bachelor’s degree or dentistry degree is on average 45% more than a bachelor’s degree alone. The same is true for a law degree (although if you attend a carefully selected law school, that is likely to be the case). PhDs also vary greatly from field to field, but salaries are generally significantly higher.

The problem is that most graduate students don’t have an MD, JD, or Ph.D. They have a master’s degree.

Sure, people with a master’s degree earn more on average than those with a bachelor’s degree, but they earn only 18%. And looking at the numbers for each individual graduate program, the potential for rewards drops even further. Preston Cooper, a researcher at the Foundation for Research on Equal Opportunity, recently measured the return on investment of approximately 14,000 graduate programs. He found a lot of evidence that medical schools, law schools, and dental schools deserve it, and that master’s degrees in computer science, engineering, and nursing tend to be rewarded. But he also 40% of master’s degree There was no profit in my lifetime earnings — none.

What is the least economically valuable degree? That honor is given to a master’s degree in arts, humanities and theology. Cooper estimated that 85% of these degrees had a negative return on investment. Of course, you can argue about the intrinsic value of knowledge, but it’s unlikely to impress what credit bureaus knock to recover your student loan debt. You don’t need a master’s degree in art to make sure that a master’s degree in art will make you financially worse for your entire life.

Even more surprising, Cooper found that 62% of MBAs (most popular of all master’s degrees) do not provide a return on investment. The rewards for the second most popular degree, the master’s degree, were also pretty terrible. Cooper estimated that 32% of such programs had a negative return on investment.

The financial situation is even darker than these numbers suggest. Cooper did not include student loan debt in the calculation because high master’s degrees would distort the data. However, debt slows the accumulation of wealth and ultimately plays a major role in determining the economic value of a degree. Students who spend years or decades to provide a $ 70,000 service in a master’s debt often cannot buy a home or save until the second half of their life, in addition to the undergraduate debt. .. One borrower I talked to knows that it will take decades for her to be able to buy her real estate, so she ironically calls her student loan debt “my home.” I call it with all my heart.

Conclusion: The horrifying percentage of people enrolling in the master’s program each year would be much better if they continued to work and did not return to school.

What is the driving force behind fraud

So why do we need to worry? After all, get a Master’s degree in Happiness Studies (Tuition and Fees: $ 17,700), Applied Positive Psychology (Tuition and Fees: $ 71,784), or Dispute Resolution (Tuition and Fees: $ 80,227). No one forces you. If a student is in debt and wants to get enough to not save for retirement, who will stop them? As Cooper’s own PhD in Economics at George Mason University (return on investment: minus $ 440,000) shows, the heart wants what the heart wants, and for many the cold and difficult data that will change it. There is none.

60% of graduate students are women. A master’s degree is seen as a way to overcome sexism, but graduates are often even worse financially.

Randy Basquez / Bay Digital First Media / Mercury News / Getty Images


But more is happening here than the benevolent temple of higher education, which offers the virtues of erudition to the knowledge-hungry acolytes. For one thing, there is not much information available to students who want to weigh the cost-benefit analysis of advanced degrees. This is because schools know that the data is not in their interests. “Many students don’t know that these master’s degrees won’t reward them,” Cooper told me. He wants students to “see these master’s programs with a much more skeptical eye” as studies like him become more well known.

As Professor Charles Davis of the University of Michigan says, increasing work credibility is another major driver of the Master’s Degree Industrial Zone. Jobs that once did not require a college degree are now required, and jobs that once required only a bachelor’s degree now require a master’s degree or higher. Davis is directly responsible for what he calls “a mutually beneficial relationship between industry and higher education.” There, American companies demand qualifications that universities are willing to offer.

Some master’s programs, such as nursing and engineering, provide targeted training that employers want and legally need. But do you really need a student-related master’s degree to work at the university admissions office and earn $ 48,000 a year? Why do social media managers need a master’s degree in digital social media from USC unless the class is taught by Charli D’Amelio and Doja Cat? They don’t know, and the employer knows it. But in the highly competitive employment market, companies are looking for a master’s degree just because they can. Studies show that demand for credentials decreases in less competitive markets.

Labor market credibility hits blacks, and on average, hits women of all races. (60% of graduate students are women.) Advanced degrees fulfill their promise to overcome racism and sexism in the workplace. With a master’s degree, your thoughts go on and your boss is more likely to pay you more. “After a bachelor’s degree, black women facing labor market discrimination often find that a graduate degree is the main option for financial stability,” he said. Dominique Baker, a professor of education policy at Southern Methodist University, said. Methodist University, told me. “Then, educational institutions can incur debt to these students to promise a better future.”

A master’s degree is a big business. Over the last decade, universities have created over 9,000 new master’s programs, and revenue is often the main driver. University admins aren’t ashamed to say so much, even in Ivy League institutions. Last year, the Vice-President of Columbia University graduated from a film school with a $ 360,000 debt, claiming that a master’s degree granting other parts of the university “can and should be a source of income.” Responded to the story about the students. This is from a university where $ 14 billion in donations increased by nearly $ 8.5 million per day last year.

The federal government also plays a major role in driving the master’s boom by providing universities with strong incentives for master’s students. Unlike federal undergraduate loans, which have a cap of $ 31,000, federal GradPLUS loans are virtually unlimited. In short, the university can encourage the students to build up their debts, with the federal government as a sugar dad.

How to stop fraud

After all, millennials and Gen Z are in dire straits.First, they say they Had If they want to do a good job, go to college and go deep into debt. Don’t worry about their parents and grandparents going to college for a small fee or living a good life without a bachelor’s degree at all. Millennials and Gen Z acted as they were told. They flocked to college soon after graduating from high school at a much higher rate than previous generations.

Then their parents and grandparents enjoyed when the college didn’t lead to middle-class jobs Without it Millennials earned college degrees and went on to graduate school at a higher rate than any other generation in history. Scams made them poor for the rest of their lives: Baby boomers have accumulated seven times the total net worth of millennials in their thirties at the same age.

Many scholars studying higher education have asked President Joe Biden to include graduate debt in his student loan forgiveness, which he has shown likely to admit. Opponents argue that allowing future doctors and lawyers to borrow money “will send the most money to high-income earners and those with a graduate degree.” However, the government can simply exempt the professional degree loan with the highest return on investment from the forgiveness program. After all, most doctors and dentists will comfortably repay their loans and continue to earn millions of dollars during their careers.

In the long run, the only way to solve a student’s debt crisis is to reduce student debt. The only way to do that is to reduce the need to borrow. Master’s and PhD graduate loans must be capped just like undergraduate loans. It will reduce the incentive for universities to pursue profits by offering graduate students a worthless degree.

But employers also have to take responsibility. Companies that employ positions that do not really require professional education should stop saying “a master’s degree is desirable” in their job description. This doubles for nonprofits, one of the worst criminals when it comes to asking for unnecessary credentials. Universities may benefit from nonsensical master’s degrees, but corporate America has stimulated demand and blamed millions of young Americans for lifelong financial instability.


James S. Murphy is a Higher Education Policy Analyst at EducationReformNow. His work has been published in The Atlantic, Vanity Fair, Slate, and other magazines.