Calculate the Return on a Master's Degree

Teachers committed to a career in the classroom poop come along their lifetime earnings with a master’s compass point.

In a hypercompetitive workforce, it's important to stand out, and many employees see graduate school as a way to do so. But a master's academic dot isn't always a extraneous financial move.

 

Students considering an advanced degree in any discipline should know two things: what the degree will cost—including tuition, student loan interest, and lost salary and retirement contributions—and what salary they can post when they graduate, says Alexa von Tobel, founder and CEO of LearnVest, a personal finance site.

" calibrate school is much(prenominal) a rich experience. I come back it is fabulous," von Tobel says. "I absolutely recommend it, if you can make [the] come make sense."

[Get tips and tools to help pay for grad school.]

Most master's programs post the average startle salary for recent grads on their websites, and some schools offer grants, scholarships, and fellowships to help minimize the cost of the degree. Students can use a grad school calculator, similar the one offered by LearnVest, to crunch the numbers and calculate the return on their investment.

The MBA payoff

"If you're currently devising $100,000, and qualifying to a two-year MBA program for $100,000 is breathing out to land you making $100,000, that doesn't make sense," says von Tobel, who dropped out of Harvard Business School to start LearnVest. "If it's going to land you making $150,000, well that absolutely makes sense."

[See photos of the Best Business Schools.]

The top business schools advertise the starting salaries for recent graduates, but it's important to remember these are only averages.

"If you want to do some weird, quirky job that commands something often lower, then the average becomes irrelevant," von Tobel says. "If you want to go into investment banking instead, it commands higher, so you likewise have to consider that."

Pursuing a less-traveled path, such as economics or finance, can also pay dividends and help graduates stand out from the sea of MBAs, says rooster Startz, a professor of economics at the University of calcium—Santa Barbara.

"You're really getting some professional and skillful training," he notes. "Very, very few undergraduates come out with the kind of technical skills that you need ... to actually figure out how to set prices, or to actually do forecasts."

Mastering education

For grade school and high school teachers, however, a master's in education isn't always a smart move, says Startz, who penned the book Profit of Education.

"If you control for [experience], you make about another $5,000 a year if you get a master's degree," says Startz.

That's an extra $125,000, on average, all over 25 years, but nearly 50 percent of new educators quit teaching within v years, according to the National Commission on Teaching and America's Future, a nonprofit organization.

Materials taken from US News