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Is a Master’s Degree Worth It?
Consider potential earnings, employability and grad school costs when determining if a master’s degree is worth it.
Anna Helhoski is a senior writer covering economic news and trends in consumer finance at NerdWallet. She is also an authority on student loans. She joined NerdWallet in 2014. Her work has appeared in The Associated Press, The New York Times, The Washington Post and USA Today. She previously covered local news in the New York metro area for the Daily Voice and New York state politics for The Legislative Gazette. She holds a bachelor's degree in journalism from Purchase College, State University of New York.
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Trea S. Branch is a former NerdWallet writer focused on student loan refinancing. She holds a degree in economics from the University of Michigan and a degree in business from the University of Notre Dame. Trea shared her own student loan payoff journey through a blog, which turned into a personal finance coaching business. Her goal has been to empower anyone overwhelmed by student debt.
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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.
NerdWallet ratingNerdWallet's ratings are determined by our editorial team. The scoring formula for student loan products takes into account more than 50 data points across multiple categories, including repayment options, customer service, lender transparency, loan eligibility and underwriting criteria.
Fixed APR
3.74-17.99%
College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC.. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply. As certified by your school and less any other financial aid you might receive. Minimum $1,000. Rates shown include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation. This informational repayment example uses typical loan terms for a freshman borrower who selects the Flat Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.78% fixed Annual Percentage Rate (“APR”): 54 monthly payments of $25 while in school, followed by 96 monthly payments of $176.21 while in the repayment period, for a total amount of payments of $18,266.38. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. Information advertised valid as of 8/12/2024. Variable interest rates may increase after consummation. Approved interest rate will depend on the creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.
Variable APR
5.59-17.99%
College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC.. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply. As certified by your school and less any other financial aid you might receive. Minimum $1,000. Rates shown include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation. This informational repayment example uses typical loan terms for a freshman borrower who selects the Flat Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.78% fixed Annual Percentage Rate (“APR”): 54 monthly payments of $25 while in school, followed by 96 monthly payments of $176.21 while in the repayment period, for a total amount of payments of $18,266.38. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. Information advertised valid as of 8/12/2024. Variable interest rates may increase after consummation. Approved interest rate will depend on the creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.
NerdWallet ratingNerdWallet's ratings are determined by our editorial team. The scoring formula for student loan products takes into account more than 50 data points across multiple categories, including repayment options, customer service, lender transparency, loan eligibility and underwriting criteria.
Fixed APR
3.74-15.49%
Lowest rates shown include the auto debit. Advertised APRs for undergraduate students assume a $10,000 loan to a student who attends school for 4 years and has no prior Sallie Mae-serviced loans. Interest rates for variable rate loans may increase or decrease over the life of the loan based on changes to the 30-day Average Secured Overnight Financing Rate (SOFR) rounded up to the nearest one-eighth of one percent. Advertised variable rates are the starting range of rates and may vary outside of that range over the life of the loan. Interest is charged starting when funds are sent to the school. With the Fixed and Deferred Repayment Options, the interest rate is higher than with the Interest Repayment Option and Unpaid Interest is added to the loan’s Current Principal at the end of the grace/separation period. To receive a 0.25 percentage point interest rate discount, the borrower or cosigner must enroll in auto debit through Sallie Mae. The discount applies only during active repayment for as long as the Current Amount Due or Designated Amount is successfully withdrawn from the authorized bank account each month. It may be suspended during forbearance or deferment. Advertised APRs are valid as of 8/8/2024. Loan amounts: For applications submitted directly to Sallie Mae, loan amount cannot exceed the cost of attendance less financial aid received, as certified by the school. Applications submitted to Sallie Mae through a partner website will be subject to a lower maximum loan request amount. Miscellaneous personal expenses (such as a laptop) may be included in the cost of attendance for students enrolled at least half-time. Examples of typical costs for a $10,000 Smart Option Student Loan with the most common fixed rate, fixed repayment option, 6-month separation period, and two disbursements: For a borrower with no prior loans and a 4-year in-school period, it works out to a 10.28% fixed APR, 51 payments of $25.00, 119 payments of $182.67 and one payment of $121.71, for a Total Loan Cost of $23,134.44. For a borrower with $20,000 in prior loans and a 2-year in-school period, it works out to a 10.78% fixed APR, 27 payments of $25.00, 179 payments of $132.53 and one payment of $40.35 for a total loan cost of $24,438.22. Loans that are subject to a $50 minimum principal and interest payment amount may receive a loan term that is less than 10 years. A variable APR may increase over the life of the loan. A fixed APR will not.
Variable APR
5.37-15.70%
Lowest rates shown include the auto debit. Advertised APRs for undergraduate students assume a $10,000 loan to a student who attends school for 4 years and has no prior Sallie Mae-serviced loans. Interest rates for variable rate loans may increase or decrease over the life of the loan based on changes to the 30-day Average Secured Overnight Financing Rate (SOFR) rounded up to the nearest one-eighth of one percent. Advertised variable rates are the starting range of rates and may vary outside of that range over the life of the loan. Interest is charged starting when funds are sent to the school. With the Fixed and Deferred Repayment Options, the interest rate is higher than with the Interest Repayment Option and Unpaid Interest is added to the loan’s Current Principal at the end of the grace/separation period. To receive a 0.25 percentage point interest rate discount, the borrower or cosigner must enroll in auto debit through Sallie Mae. The discount applies only during active repayment for as long as the Current Amount Due or Designated Amount is successfully withdrawn from the authorized bank account each month. It may be suspended during forbearance or deferment. Advertised APRs are valid as of 8/8/2024. Loan amounts: For applications submitted directly to Sallie Mae, loan amount cannot exceed the cost of attendance less financial aid received, as certified by the school. Applications submitted to Sallie Mae through a partner website will be subject to a lower maximum loan request amount. Miscellaneous personal expenses (such as a laptop) may be included in the cost of attendance for students enrolled at least half-time. Examples of typical costs for a $10,000 Smart Option Student Loan with the most common fixed rate, fixed repayment option, 6-month separation period, and two disbursements: For a borrower with no prior loans and a 4-year in-school period, it works out to a 10.28% fixed APR, 51 payments of $25.00, 119 payments of $182.67 and one payment of $121.71, for a Total Loan Cost of $23,134.44. For a borrower with $20,000 in prior loans and a 2-year in-school period, it works out to a 10.78% fixed APR, 27 payments of $25.00, 179 payments of $132.53 and one payment of $40.35 for a total loan cost of $24,438.22. Loans that are subject to a $50 minimum principal and interest payment amount may receive a loan term that is less than 10 years. A variable APR may increase over the life of the loan. A fixed APR will not.
Credible lets you check with multiple student loan lenders to get rates with no impact to your credit score. Visit their website to take the next steps.
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.
Occupation
2021 median annual wage
Nurse anesthetists
$195,610.
Computer and information research scientists
$131,490.
Political scientists
$122,510.
Physician assistants
$121,530.
Nurse practitioners
$120,680.
Nurse midwives
$112,830.
Mathematicians
$108,100.
Economists
$105,630.
Industrial-organizational psychologists
$105,310.
Source: U.S. 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.
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.
Occupation
Projected number of new jobs
(2021 to 2031)
2021 median pay
Nurse practitioners
50,000 or more.
$80,000 or more.
Occupational therapists
10,000 to 49,999.
$80,000 or more.
Statisticians
10,000 to 49,999.
$80,000 or more.
Physician assistants
10,000 to 49,999.
$80,000 or more.
Computer and information research scientists
5,000 to 9,999.
$80,000 or more.
Nurse anesthetists
5,000 to 9,999.
$80,000 or more.
Source: U.S. Bureau of Labor Statistics
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.
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.
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.