Is a Master’s Degree Worth It?

A master’s degree could lead to higher pay and career advancement, but that’s not always the case. The cost of graduate school and how you pay for it play large roles in determining whether a master’s degree is worth it.

Here’s how you can decide if obtaining a master’s degree is right for you.

You could earn more with a master’s degree

Wages tend to increase with higher degrees. The median annual salary for workers with a master’s degree was around $81,848 in 2021, according to the U.S. Bureau of Labor Statistics; that’s compared to bachelor’s degree holders who earned about $69,368.

The type of master's degree also matters when figuring out your earnings potential. Here are the top-paying jobs that require a master's degree for 2021, according to the Bureau of Labor Statistics.

Where you study also matters. Some grad schools report higher starting salaries for their graduates than others. 

For example, the median base salary of graduates with a Master of Business Administration from the Tuck School of Business at Dartmouth is $175,000 for the class of 2022, according to the school's website. This is compared with a median starting salary of $75,000 for MBA graduates in the 2021-22 academic year at Claremont Graduate University Drucker School of Management, per the school's website.

» MORE: What is graduate school?

Master’s degree holders are more likely to be employed

Master’s degree holders tend to have lower unemployment rates than those with a bachelor’s degree. In 2021, the unemployment rate for workers with a master’s degree was 2.6% compared with 3.5% for those with bachelor’s degrees, according to data from the Bureau of Labor Statistics.

Although not always the case, a lower unemployment rate could indicate a greater chance of remaining employed during times of economic uncertainty. It could also mean simply having more options — and greater leverage in the labor market.

Here are some of the fastest-growing jobs that require a master’s degree, according to the Bureau of Labor Statistics. These jobs are based on the projected number of openings and projected growth rate from 2021 to 2031.

Note that a master’s degree doesn't guarantee a higher salary and a recession-proof career: There are occupations where you can thrive with a bachelor’s degree. 

For example, management analysts, medical and health services managers and software developers with bachelor’s degrees earned a median salary of $80,000 or more in 2021, according to the Bureau of Labor Statistics. 

» MORE: Do you need a grad degree to compete right now?

Consider the cost of a master’s degree

To really understand if a master’s degree is worth it, weigh the benefits against the costs.

The average cost of graduate tuition and fees for the 2020-2021 academic year was $12,394 per year for public institutions and $26,621 per year for private schools, according to data from the National Center for Education Statistics.

However, note that the above costs are averages. Graduate school tuition can vary by school, type of degree and length of the program, among other factors.

And outside of tuition and fees, don’t forget living expenses if you’re going back to school full time. Many colleges include cost of living in their total cost estimates. 

Pennsylvania State University, for example, estimates $23,300 for living expenses — including books and supplies — and $3,700 for mandatory health insurance for the 2023-24 academic year. These cost estimates are on top of tuition and fee estimates.

» MORE: Financial aid for graduate school: Who qualifies and how to apply

How to pay for a master's degree

How you pay for graduate school can also impact the total cost. 

Taking out graduate school loans can increase the total cost because of the interest rates you’re charged on the loan. That’s why it’s best to try funding your education through scholarships, fellowships and grants — money you don’t have to pay back.

Then, consider any tuition assistance you can get from your employer if you’re working. Employers may pay a portion of your tuition — up to $5,250 tax-free — either as a reimbursement or by paying your school directly. This benefit usually comes with stipulations, however. For example, you may be required to study a topic related to your career field or continue working for a number of years with the company after graduating.

Once you’ve exhausted options for free aid, research graduate student loans to cover any remaining costs. But the idea is to minimize — or eliminate — the amount you borrow. 

Start by filling out the Free Application for Federal Student Aid, or FAFSA. This will show you free aid and federal student loans for which you qualify. 

» MORE: Do you have to pay student loans in graduate school?

Should I get a master’s degree?

Deciding whether to invest in a master’s degree depends on several factors that can vary for each individual. Before making a decision, consider: