There’s a general belief that getting an advanced degree, such as a MBA or PhD, is a path towards higher income and more wealth. But that’s not always the case. And when the economy gets tough, there’s a trend of people going back to college to get advanced degrees, in hopes that it will make a difference in the future.
While data from the Bureau of Labor Statistics (BLS) shows the national unemployment rate is still relatively low (4.1% as of February 2025), that doesn’t mean the job market is strong. In fact, there are numerous signs the labor market is tightening, and there’s plenty of reporting that proves it.
For example, Bloomberg just reported that graduates from top MBA programs are struggling to find jobs, and Business Insider highlighted some pretty troubling hiring trends for software engineers. There have also been mass layoffs in a range of different industries from tech to hospitality to the federal government. Obviously, all recently laid off workers will be on the hunt for jobs in the coming months and years, which will only add to the problem.
If you think pursuing an advanced degree is the ticket to landing better employment, or any job at all, you may want to seriously rethink your plans. While heading back to school has long been considered a solid strategy for securing better work or higher earnings, evidence shows there’s a growing gap between college graduates and high-paying careers.
Degrees That Don’t Pay Off
Before you head back to college or make plans to continue on after earning a bachelor’s degree, you need to know that many degree programs have no return-on-investment (ROI) at all, or even a negative ROI. This happens when the cost of a degree outweighs the benefit of potentially higher earnings, or when an advanced degree doesn’t lead to better employment outcomes in the long run.
According to lecturer Catherine Rymsha of University of Massachusetts Lowell, students can find these degree programs by researching post-graduation earnings data, job market needs, and the total investment required to earn a degree (including time out of the job market plus higher education costs).
“Salary databases, alumni networks and just asking around can aid in providing insight.” she says. “Degrees in art, for example, may be worth the learning from a personal interest standpoint, but may lack appropriate career options leading to a poor ROI from a traditional standpoint.”
The Foundation for Research on Equal Opportunity (FREOPP) has also completed a study in this realm, and you can use it as a cheat sheet for finding unrewarding degrees. According to FREOPP, almost half (43%) of master’s degree programs had a negative ROI, meaning students end these programs financially worse off than they started them. Their data also shows that 23% of doctoral and professional degrees don’t pay off financially, either.
The author of the study, Preston Cooper, says that master’s degrees in particular can be all over the place, and that the median master’s degree program has an ROI of just $50,000. Master’s degrees in public service fields (think education and social work) tend to have very low or negative ROIs. And even though the Master of Business Administration (MBA) is one of the most popular master’s-level programs, 39% of MBAs have a negative ROI.
However, some advanced degrees do tend to be lucrative, including professional degrees in fields like dentistry, law, and medicine. At the end of the day, degrees that have impressive returns (on average) tend to be in highly paid fields and come from schools that prepare students for prestigious positions.
Downsides Of Unrewarding Degrees
If money is no object, then sure, continue earning more degrees as long as your heart desires. If you want an advanced degree to lead to better job offers, more money, or both over the course of your career, however, you’ll need to choose your advanced degree program wisely.
If you don’t, you could regret it for more reasons than one. Higher education advisor Dan Ulin of Elite Student Coach in Los Angeles, California says downsides of unrewarding advanced degrees can extend far beyond the potential for long-term student loan debt and being thrust into an industry with limited (or no) growth potential. You could also wind up suffering the emotional trauma of pursuing a field you love for which there isn’t enough demand.
“The thrill of gaining admission to a prestigious college or grad school burns off quickly when you discover you can’t pay for it or find a job,” he says.
There’s also the time you’ll lose pursuing an advanced degree that won’t lead to higher earnings. This time includes not only the hours you spend studying, but also time you spend away from family and time you could be spending doing something else.
That said, you shouldn’t panic and label all advanced degrees worthless. They’re definitely not.
Before you skip earning an advanced degree altogether, make sure you do the research to know if the degree you’re after makes financial sense. Also check whether your current employer offers tuition assistance that could pay for the program, which could turn the ROI calculation on its head.
From there, you’ll want to consider other funding opportunities that may be available to you through scholarships, grants, work-study programs, or other avenues. If you are finding the numbers just don’t support the degree, however, you need to face reality.
“If your employer can’t cover the cost of your degree or you’re unable to fund the degree with scholarships, teaching assistant opportunities, or other aid, you may need to take on student debt to cover the cost of your degree,” says financial aid specialist Bethany Hubert of Going Merry by Earnest.
For many students, the juice won’t be worth the squeeze.
The Bottom Line
If you’re worried about the ROI of heading back to school, there are plenty of alternative steps that can move the needle for your career instead. For example, you could look into certifications in your industry that can provide you with more experience for a relatively low cost.
Hubert also says advanced degrees aren’t always a substitute for hands-on work experience.
“Some employers prioritize real-world skills and industry experience over advanced degrees, especially in certain fields,” she says. “It’s important to consider the balance between academic achievements and practical experience in your chosen career path.”
Kevin Ladd of Scholarships.com also points out that opportunities can come from places you never expect, and that many people wind up in jobs totally unrelated from their field of study anyway.
“Few people end up doing what they thought they would do when they were still in high school,” he says, “Many changed majors more than once during their first couple of years in college.”
With this in mind, sticking with your current trajectory and seeking out networking opportunities and new challenges whenever possible may make more sense.
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