Graduate degrees come with hefty price tags in terms of tuition and time, so the key question here is: Is graduate school worth the ROI (return on investment)?

Calculating the ROI of advanced degrees is a bit challenging. You’ll need to consider the costs of tuition, living expenses, and time away from the workforce to the potential financial benefits and career growth opportunities that a graduate degree might offer.

So, should you go for it? This article will take a closer look at the costs, benefits, and return on investment of advanced degrees to help you decide if grad school is a smart investment for your future.

Related:

• What Is the Fastest Masters Degree to Get
• Easiest Masters Degrees
• Health Informatics Masters Salary: How Much Money Can I Make?
• Is a Masters in Psychology Worth It?
• What Can You Do with a Masters in Organizational Leadership?

Understanding ROI in the Context of Advanced Degrees

When we talk about ROI in education, we’re asking whether grad school’s financial and time commitment is worth the payoff—whether that’s in terms of a higher salary, more career opportunities, or personal satisfaction. ROI doesn’t just look at the sticker price of tuition. It also factors in things like the salary boost you might get after graduating, job opportunities, and the time it’ll take to recoup the costs of going back to school.

This is why it’s important to spend a lot of time researching and comparing costs and average salaries when conducting a graduate degree ROI comparison.

The Costs of Pursuing an Advanced Degree

Graduate school is expensive—and we’re not just talking about tuition. There are several costs and benefits of graduate school you need to balance out. Here are the major costs you must expect when pursuing a graduate degree:

Tuition and Fees

Graduate degree costs can vary widely depending on the field and the school. On average, tuition for a master’s degree ranges from about $30,000 to $60,000 per year, while doctoral programs can go even higher.

Public universities are usually cheaper than private ones. And remember, costs don’t just include tuition—you’ll also need to consider fees for books, supplies, and sometimes even lab or technology fees. It all adds up.

Opportunity Cost

When you’re in grad school, you’re not working full-time, which means you’re not earning your regular salary. Depending on the program, this could mean missing out on years of salary potential.

Student Loans

On average, the graduate student loan debt in the U.S. is $70,000. And that debt comes with interest. So, even though you’re hoping that your advanced degree will lead to a higher-paying job, you’ll likely be carrying debt with you for years after you graduate.

Benefits of an Advanced Degree

Increased Earning Potential

The most obvious benefit of earning an advanced degree offers the potential for a higher salary. On average, individuals with a master’s degree earn 20% more than people with just a bachelor’s, and Ph.D. holders earn even more. In some fields, the difference can be even bigger.

Career Advancement Opportunities

The debate of master’s degree vs. job experience has been ongoing for many years. Although experience may be enough to propel you forward in some positions, in many industries, an advanced degree is increasingly becoming a prerequisite for career advancement.

Specialization and Expertise

Graduate programs allow you to dive deep into a specific area of interest. This can make you more marketable and set you apart from the competition. If you want to become an expert in a particular area—whether it’s a branch of engineering, a subfield of medicine, or a niche in the social sciences—graduate school is a great way to develop that expertise.

ROI Analysis for Different Graduate Degrees

Not all advanced degrees offer the same ROI; some fields are better investments than others. Let’s look at a few examples of the best advanced degrees for ROI:

STEM Degrees

Degrees in science, technology, engineering, and math (STEM) fields tend to offer some of the best ROI. These fields are in high demand, and workers with advanced degrees in STEM often command higher salaries. For example, an engineer with a master’s degree might earn $90,000+ per year, whereas someone in a lower-demand field might struggle to reach that.

Business Degrees (e.g., MBA)

An MBA is one of the most well-known graduate degrees, often leading to lucrative roles in management and consulting. However, MBAs can be pricey—tuition at top-tier schools, such as Stanford GSB, UCLA, and Wharton, can range from $120,000 to $140,000. Yet, MBA graduates from reputable programs can earn salaries north of $100,000, and many go on to occupy high-paying executive positions.

Healthcare and Medical Fields

Healthcare is another field where advanced degrees are common and often required. For example, nurse practitioners, physician assistants, and healthcare administrators can earn six-figure salaries with the right advanced degrees. However, programs in these fields often take multiple years and have high costs.

Humanities and Social Sciences

Humanities and social sciences Ph.D. return on investment is focused on students’ love of the subject rather than for financial gain. If your goal is a career in academia or research, a Ph.D. might make sense. However, paying off the student debt may take years, especially when salaries in these fields are often lower than in business or healthcare.

Education Degrees

A master’s in education can improve your earning potential and lead to administrative roles, but it’s not typically a high-ROI degree in terms of salary. The salary increase might not offset the educational costs, especially in public school systems.

Factors That Affect the ROI of Graduate School

Field of Study

The ROI can vary dramatically depending on what you’re studying. STEM fields, business, and healthcare typically offer the highest ROI, while the humanities and education often offer more modest returns.

Type of Institution and Program

The reputation of the school, the location, and whether the program is online or in-person can also influence ROI. An MBA from a top-tier school like Wharton or Stanford is likely to have a higher ROI than one from a lesser-known institution.

Job Market Demand

Industries like technology and healthcare are growing rapidly, while others, like publishing or the arts, may not offer as many job opportunities.

Geographic Location

Salary levels and job availability can vary widely based on location. For example, tech professionals in Silicon Valley earn significantly more than those in other parts of the country.

Non-Financial Benefits of Advanced Degrees

• Professional Networking: Graduate school gives you access to a network of peers, professors, and industry connections that can be invaluable throughout your career.
• Skill Development: You’ll have several opportunities to sharpen your critical thinking, problem-solving, and research skills.
• Personal Fulfillment: For many, pursuing high ROI graduate programs is about personal growth and intellectual fulfillment. Graduate school offers the opportunity to dive deep into subjects you’re passionate about, and the sense of achievement that comes from mastering complex topics can be incredibly rewarding.

Alternatives to Graduate School for Career Growth

Professional Certifications

Many ask which is more valuable: graduate school vs. professional certifications. Both are valuable. However, certifications are often shorter, more affordable, and more directly aligned with specific job skills, which can appeal to those looking to advance quickly in their careers.

Online Courses and Bootcamps

A growing number of online courses and boot camps teach highly specialized skills, particularly in fields like tech, design, and business. These options are typically far less expensive than graduate programs and are designed to get you job-ready quickly.

Work Experience

Experience is often just as valuable—if not more so—than advanced degrees in many fields. If you’re already working in your field, continuing to build your experience and expanding your skill set on the job can lead to promotions, raises, or even new job offers, sometimes without additional schooling.

Deciding Whether Graduate School is Worth It

So, is graduate school worth the ROI? Ultimately, the answer depends on several factors. Here are a few practical questions to help you decide if pursuing an advanced degree is worth your time and money.

• What are your career goals and salary expectations?
• Will a graduate degree directly improve your employment prospects?
• Do you have a financial plan to manage the costs?
• Are you prepared for the time commitment?

There’s no one-size-fits-all answer to the question of whether graduate school is worth it. The key takeaway is that you must carefully weigh the costs and benefits in light of your career goals, financial situation, and personal aspirations.

Conclusion

Is a master’s degree worth it? Would a doctorate be a better option? The answers will depend on your personal goals and interests. Remember, an advanced degree isn’t the only way to succeed. Professional certifications, online courses, and hands-on experience can also help you advance your career.

So, ask yourself: What are your goals? What’s your financial plan? And what will bring you the most satisfaction in the long term?