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.
{ 18 comments… read them below or add one }
Probably not worthless but worth less (than people expect).
As a person that works in higher education, I see a lot of value in extending your education beyond the undergraduate level. However, I think the value factor is not necessarily representative in your salary or career ambitions. I think the value is found in making you a better, well-rounded, educated person that successfully contributes to whatever project or opportunity crosses your path.
All that being said, I am still contemplating my own MBA but for now I would much rather spend my free time on personal projects and with the family. Sooner or later, my MBA aspirations will win out though.
I received my master’s in financial planning in December of 2008. Well, today I am not in that field. You could call it bad timing (market decline) or limiting myself to one area, but I just couldn’t find a job in the area.
In my current job working for the Department of the Treasury, the master’s degree qualified me for higher pay which was nice, but I don’t think it officially “paid” for my degree. Maybe it will pay for itself in the future but as of now, no.
I am considering getting a graduate degree some day for two reasons. 1) I enjoyed classes in college (for the most part.) 2) My wife has a master’s degree, and a marriage should be between equals, right? That said, there is no financial justification for such a degree in my field. So I might not get around to it until I am retired or nearly so.
A friend quit a mediocre job (working at a collection agency with her bachelor’s degree in economics or something like that) to pursue her MBA. She finished the MBA a couple years ago, but hasn’t been able to find a job since then.
I’m thinking about perusing a master degree sometime in the near future, just because I love to learn and want to be challenged more. The added benefits of having a higher education stop there for me.
Related to “prestige” is networking. One of the big advantages of an Ivy League or other top-caliber degree isn’t just being able to boast you went to Harvard, it’s the connections you make while you’re there and the job placement services they have. Smaller and less prestigious schools can’t match it.
I would love to hear more about whether an online degree actually has added anything to your income potential. I don’t doubt that you (and others in an online degree program) actually learned something, but did it make any difference when applying for a job, etc.?
I had a similiar experience with my online master’s classes in terms of undedicated students. I think that the value of a graduate degree lies more in what you take away from it (including contacts) than merely having the “M.S.” after your name. I ended up switching schools just to get away from people who used things like “:)” or “lol” in their classroom posts.
Did your parents pay for all of your college including your master’s degree as you indicated was their duty on another site?
Thanks for your interest (however irrelevant to this conversation). I was actually able to find scholarships for my master’s. So between my parents assistance and my own merit, I was able to emerge from higher education unscathed by debt.
Someday I would like to get my master’s degree but that’s a personal goal (and because I like school). I’m not rushing to spend the money on it because I don’t see it making any difference in my career.
I would like to get a graduate degree, but now that I have 2 kids it’s too hard.
People put off getting these sometimes, and life just happens! I’d like to advise your readers to get the advanced degree while they are young, because once kids come into the equation, they will find that the opportunity cost dramatically increases!
My place of employement even has a program to pay a most of the cost (depending on the college choosen), but still, at this time it’s not worth it for me.
After all, your kids are only kids once, and you only get 1 shot to raise them well…
Oh, I don’t think I would go into deep debt to get an advanced degree either, not today anyway…
“I would argue that an undergraduate degree is always worthwhile”
I will happily take the other side of that argument :)
http://www.erica.biz/2009/young-entrepreneurs-college/
-Erica
Flexo,
I think it’s great you persued your MBA, even if it was online. It shows you have a passion for learning and self improvement. Also, you are under no illusion that an online degree has the same worth as a FT degree, which is good.
It’s about networking and pedigree frankly. Firms HAVE mentioned that so and so has the right pedigree, and hence are being recruiting.
Learning and utlizing what you learned is the end game!
Best,
Sam
Hey Flexo,
For some reason I completely missed the University of Phoenix series you wrote about a few years ago. Did you ever finish part 6 and 7 or the series? It’s very fascinating.
Thanks!
Hi- I loved reading this post & the comments! You raised a very important question and it relates not only to your MBA, but also other experiences. Return on investment is directly related to your reasons for obtaining the degree. When I got my MBA in Finance several years ago, it had been a personal goal for many years. There were so many benefits; knowledge, stimulation, relationships, opportunities, prestige, that I consider my MBA a total success. Whatever the dollar for dollar return, I don’t have a moments regret about the decision.
Getting more education is definitely very important… depending on what you’re looking for. I have 2 degrees which aren’t worth much in the work place and I have been encouraged to continue my education since these as BA’s don’t mean a great deal. However, between the 2 of them, it makes a great impression on an employer when I advise how I managed to get 2 separate degress in 4 years.
Is not any education good in some or any aspect? Man we have understand peoples reasons and situations for what schooling they have and get!
I got my MBA from the University of San Francisco, which is nowhere near the top rankings for MBA programs. It has never opened any doors for me or made me eligible for anything except entry-level jobs. Fellow alumni have even shut me out of their networks because they consider my military background to be worthless. Prospective MBA students should only bother applying to the top MBA schools; othwerwise, forget the MBA and just keep working.