Evaluating the ROI of the most popular master’s degrees

Continued education remains one of the most crucial and fundamental aspects to a prosperous life. With a majority of current college-aged adults pursuing at least some form of post-secondary education, the supply of traditional degrees in the workforce has never been larger.

However, with that increased supply comes constraints on demand. As more and more prospective employees compete for a finite number of jobs, many are wondering whether an associate’s or bachelor’s degree is enough to truly earn their maximum potential in today's career-focused world.

Because many employers are requiring more education without proportionally increasing pay, an increasing number of degree-holders are considering master’s degrees in their chosen fields. The last thing somebody wants to hear after completing several years of education is that they need to complete even more, but this is the reality for many entering the workforce.

As such, evaluating the return on investment of the most popular master’s degrees makes sense for both those beginning their education and those who are considering an additional stint at college. 

The Overall Picture

Before looking at specific master’s degrees that are most commonly pursued, examining the overall state of graduate programs – and the effect they can have in real terms on earnings – is beneficial. 

As a whole, the average graduate degree earns about $20,000 more per year than the average undergraduate with a bachelor’s degree. That is a substantial difference, and one that can easily be justified in most cases.

However, there are other factors to consider. For starters, time: it takes an additional two to three years to earn a graduate degree, and that's when pursuing the endeavor full-time. For many, that extra time just isn't worth it, but in terms of pay and income, a different picture emerges.

The average graduate degree earner also spends about $20,000 in addition to their bachelor’s degree costs to earn the distinction. Based on the broader, average math involved, this means that one year of employment with a graduate degree is generally enough to make up for the debts associated with it. 

One other factor to consider is interest. If you are not able to pay off your loans immediately, then that $20,000 – or however much it is for your specific degree and institution – will grow gradually over time. Nevertheless, considering that the average person works anywhere from 35 to 40 years, it is a huge net gain in terms of income to pursue a graduate degree.

Business Administration

One of the most common undergraduate degrees pursued is in business. As such, it should not be shocking that the most commonly-pursued graduate degree falls into this category as well. MBA degrees are arguably one of the most immediately-rewarding master’s degrees to earn.

The salary afforded to MBA earners can vary quite considerably depending on where they work and where they earned their MBA degrees. For those attending top-notch business schools, a starting salary of $125,000 per year is not uncommon. In a situation such as this, the potential annual earnings are comparable to the cost of tuition, resulting in a ROI of approximately 300%.

For those attending mid-range business schools, however, the ROI is still impressive. Salaries are generally lower (by about 20% percent), but tuition is halved. This produces a ten-year ROI of around 250%. To get a better idea of what to expect in terms of job opportunities, educational endeavors and salaries, visit educations.com where you can find and compare MBA degrees and learn more about what’s available. 

Education

Few professions are as undervalued for the work they do as teachers. It's honestly surprising that so many people pursue the career, but it is almost always fueled by a desire to do good in the world. For those who have earned their bachelor’s degree and are pondering whether a masters is worth the effort, a lot of consideration is needed.

For starters, a master’s in education – relative to the salary a teacher earns with a bachelors – generates some of the smallest ROIs in any career field. For those who are just graduating and not established teachers, the pursuit of a master’s in education could be risky: half of all education graduates abandon teaching within 5 years.

The end result is that a teacher with a master’s degree earns about $5,000 more per year. When factoring in the costs associated with earning that, the time it takes and the potential uncertainty in the job field, many opt not to pursue the degree. For those who are established in their field, however, a master’s degree will increase earning potential – but not by the amount that so many other master’s degrees do.

Engineering

Many who pursue careers in engineering have a knack for learning, and as a result, will earn substantial sums in their professions. However, a master’s in engineering can open new career possibilities beyond sheer pay; many consider this graduate degree for those very reasons.

While the bulk of engineers specialize in electrical professions, there are civil engineers, aerospace engineers, industrial engineers and several others. Approximately one-third of those holding an engineering degree ultimately pursue a masters, making it one of the most maximized fields of learning in terms of the percentage who go for a masters.

But is the pay worth the effort? As it turns out, engineers with a master’s degree follow the national average in terms of pay increase, earning about $19,000 more per year than those with bachelor’s degrees. 

With a cost of approximately $50,000 for graduate school in this field, the ROI is slightly lower – but comparable – on average than that of someone pursuing an MBA (200-300 percent). 

Computer Science

Last but not least, in a world where technology increasingly is responsible for managing everything, there is greater demand for those with expert skills in computer science. Colleges and universities are rising to the task, with hundreds of thousands are pursuing careers in this broader field every year.

Computer science majors already earn more than the national undergraduate average with their degrees, but how much more can be expected with a masters? Since computer science is such a broad field, salaries can vary widely. However, the average increase for a graduate degree in computer science far exceeds the average increase: those with a master’s in computer science earn approximately $30,000 more per year than those with a bachelor’s degree in the field.

As such, those who love computers, networking, electronics or technology in general can benefit from pursuing a career in computer science – and especially from pursuing a masters, seeing as how the average cost for CS graduate school in this field is below the average. Additionally, computer science graduates can immensely enhance their networking opportunities (no pun intended) and disproportionately are able to move into management at earlier ages than in many other fields.

With dozens of unique career fields and degree programs to pursue, it takes all sorts of personalities and motivations to fill every niche in the economy. However, many people pursue a relative handful of degrees more often than others, due to personal interest, a desire to do good, or based on their personal skills. These four master’s degrees provide varying levels of financial benefit, ranging from minuscule to extraordinary. Because of this variance, it is always important to consider the plethora of factors (such as time, money, and personal dedication) before embarking on a graduate program.