Several years ago, I decided to take advantage of an opportunity to pursue a master’s degree in business. I had been working in finance for a while, and as someone who believes in lifelong education, I figured it wouldn’t hurt to obtain an MBA. I took the relatively unpopular route of pursuing a degree where the instruction takes place online.
The choice was spurred mainly by the fact that when I attended college as an undergraduate, I participated in a class with a professor who designed one of the first web-based campus learning systems. This was exciting technology.
I’ve written extensively but not completely about my experiences obtaining this MBA. In summary: the experience was not perfect, the courses were much more difficult and required more teamwork and focus on communication in difficult circumstances than typical, classroom-based education, and this type of education still suffers and will probably for a long time suffer from a stigma. Like any graduate program, the first classes were full of students who were not dedicated and were not the caliber of learner and communicator you would expect in a graduate level course, but by the end of the program, I was amazed with the level of professionalism, dedication, and proven success among my classmates in my final courses.
I learned interesting information, so my main goal was achieved, though I often question my desire to learn more about business and corporate finance anyway.
This also came at a time when MBA graduates were common, eventually decreasing the value of that degree in the employment marketplace overall. And of course, the fallout in the finance industry has continued to mar the reputation of the MBA, even degrees awarded by Ivy League institutions.
I would argue that an undergraduate degree is always worthwhile; here are some thoughts for determining whether a graduate degree is also worthwhile.
What are your goals? When it comes to MBAs, I can safely say most people pursue this degree in order to increase their salary. In this case, the only measurement that matters is the same one you’ll focus on in an MBA financial class: a cost-benefit analysis based purely on the numbers. But this is not the only reason people decide to attend graduate school.
Some people decide to go to graduate school, particularly in an economy with high unemployment, to mark time while they’re waiting for better job offers to come around. Others choose to pursue post-graduate education because they have a thirst for knowledge and feel comfortable in an academic setting.
There are many career paths that require a postgraduate degree, as well. If your goal is to succeed as a doctor or a lawyer, a graduate degree is not only worthwhile but necessary.
How important is prestige? Perception is reality. It’s quite possible that you can get a better graduate education at a state university than you can at an Ivy League school. If the people you want to work for generally have Ivy League degrees, you will want to emulate your future bosses and mentors. If the purpose of pursuing education is broadening your knowledge, then all you need to worry about is finding the best education for the best price.
Will you recover the cost of tuition? If you’re working for a company that’s willing to pay for most or all of your education, go wild. If the employer restricts the benefit to those who stay with the company for a certain amount of years and requires you to reimburse the company for tuition if you leave, consider whether the company will really provide the opportunities you’d be interested in with your new degree. Sometimes the best offers only come when you move from one company to another.
If you aren’t receiving any tuition assistance, and particularly if you have to take out loans, finances must be at least one of your considerations. Is it likely your income will increase with this new degree? How long will it take for your salary differential to cover the cost of tuition and interest on the loans? How long will you have to continue paying off those loans?
Also consider whether taking on a master’s degree will require you to take classes full-time and cut back or eliminate the time you spend working, drastically reducing your income over that time. A break in income can have long-term detrimental effects to your wealth accumulation as well as future salaries.
For the numbers, Liz Pulliam Weston offers an analysis of averages.
While the decision to pursue a graduate degree must consider finances, money isn’t the only factor. It’s dangerous to take on a program that would put your financial situation in jeopardy. Decide if the benefits you could receive from a graduate degree, financial and otherwise, outweigh the costs. Choose the graduate program that is best for you and your goals. Perhaps you can reach your goals through continuing education outside of a master’s degree, too.
If you keep these things in mind and decide to pursue a master’s degree, you will find that it is worthwhile.
Updated December 21, 2010 and originally published July 23, 2010.