Ny Times Article: A Masters Degree Can Ruin Your Life & Keep You In Debt!

Degrees That Don’t Pay Off

Liz Pulliam Weston is the author of “Easy Money,” “Your Credit Score” and “Deal with Your Debt.” She is a personal finance columnist for MSN Money.

Graduate school has traditionally been a great place to wait out recessions while honing your skills for a better job. But sometimes, the payoff doesn’t justify the cost.

When I analyzed economic costs and benefits of various degrees several years ago for an MSN column, “Is your degree worth $1 million or worthless?”, it was clear that certain degrees were winners:

–People with associates’ degrees tended to earn a lot more than those whose educations stopped at high school.

–Bachelor’s degrees, particularly those earned at lower-cost public universities, also tended to be worth the investment.

–Professional degrees in law or medicine were costly to get but clearly offered a big enough payoff.

Not such a slam dunk: Master’s degrees.

In some fields, such as business or engineering, a graduate degree typically boosted income by more than enough to justify the cost. In others — the liberal arts and social sciences, in particular — master’s degrees didn’t appear to produce much if any earnings advantage. The Census Bureau has updated the data I used a few times since then, and the results are similar: certain graduate degrees just don’t seem to pay off.

Advanced education has many other, non-economic benefits, of course. But if you’re borrowing to pay for your schooling — as 60 percent of graduate students do, accumulating an average $37,000 in student loan debt, according to the 2003-2004 National Postsecondary Student Aid Study — you want to make sure you can pay those student loan bills when they come due.

Otherwise, you could quite literally spend the rest of your life scraping to pay off your debt. Student loans typically can’t be erased in bankruptcy court, and student lenders have extraordinary powers to pursue borrowers, up to and including taking a portion of their Social Security retirement checks.
I hear from too many readers who have six-figure student loan debts and $40,000 incomes. They can’t save for retirement or buy a home; some can’t even pay the minimums they owe on their debt.

Those in the worst shape are often the ones who took on private student loans, which have fewer consumer protections than federal student loans and which come with higher, variable rates. The prevalence of so many strapped borrowers is why I recommend students borrow no more for their educations, in total, than they expect to make the first year out of school.

This rule of thumb won’t work for everyone — heaven knows, you may be the rare literature M.A. who writes a best-selling novel and pays off her debt with one check — but it’s a good starting point for anyone considering strapping herself to more education bills.