Featured, Op-ed - Written by Naumi Haque on Monday, May 11, 2009 18:40 - 30 Comments
Is grad school a waste of time (and money)?
As someone growing up in an immigrant family with a strong emphasis on education, it’s somewhat blasphemous to suggest that grad school is a waste of time. However, there does seem to be a growing sense that the traditional ROI associated with higher education is shifting. Rising tuition is being met with fewer job opportunities (especially for PhDs) and a renewed interest in entrepreneurism, while at the same time education in general is coming under fire for its antiquated model of pedagogy.
As an example, a recent study by Skidmore economist Sandy Baum and the College Board, approximates the real lifetime value of a college degree at about $300,000. This estimate is based on the assumption that those with college degrees earn an average of $20,000 more per year than non-graduates, and takes into account the average cost of tuition and books, as well as annual inflation over a forty-year career. This estimate is down from previous calculations of an approximately $1 million payback. Mind you, this is for undergraduate degrees. It begs the question: What about more specialized and more expensive graduate degrees (expensive both in terms of tuition and opportunity costs)?
MBA degrees are a specific point of contention. While conventional wisdom will have people flooding into MBA schools, there is also a sense that maybe professionals should seek to upgrade through less conventional, more productive means. Indeed, the sheen associated with an MBA is tarnished by the fact that many of the financial decision makers that perpetrated the economic downturn were themselves alumni of some of the most respected business schools.
Some recent interviews I’ve done seem to corroborate these findings. Fast Company staff writer and author of Generation Debt, Anya Kamenetz says:
“I’ve never been an advocate of people going back to school and incurring large amounts of educational debt just to have a degree. [...] I’m very interested in what the long term developments are going to be because I think that higher education has been resistant to really fundamental types of innovation and change for far too long. We’ve seen information technology sweep every other industry and raise productivity and raise the potential of what you can accomplish. I think that in higher ed, they’re still working off a 14th century model. It’s lecture classes and it’s seminars and it’s educational requirements that don’t necessarily match where the jobs are these days. So, I think that you’re going to see a lot more students and families re-evaluating the other options out there; whether that be online education, vocational programming, certification programs, or programs that are run by employers. I think it’s actually going to be a fantastic area of growth for the next decade and a half or so.”
Penelope Trunk, author of Brazen Careerist is more colorful in her analysis of the value of graduate programs:
“People are going to grad school for stuff that has no bearing on the workplace. It’s not like we have more critical thinking because somebody knows the history of the little War of the Roses, right? And so, who cares? I don’t see any corporation placing a premium on any kind of graduate degree, except a top 25 business school degree. I mean most MBAs are from shitty schools so they don’t place a premium on that. Most law schools are shitty and people have to go into some other profession besides law because their degree is so bad. If you get a Masters in French and then try to get a marketing position, you’re penalized. You’re actually penalized because you look like you don’t have a clue about how to manage your life because you just spent four years learning French and you’re not using it. To me that just screams obsessive with details, scared to go out into the job market, and purposeless. I mean, I just don’t think anyone is placing a premium on graduate degrees.”
From what I’m hearing, it seems as though college age students are making important decisions about where they’re going to invest education dollars. Some of them are backing into junior colleges or community colleges; others are choosing to forgo higher education because of their financial situations. This would be especially true if their Boomer parents are now struggling with layoffs or delayed retirement. On the demand side of the equation, numbers from the U.S. Bureau of Labor Statistics suggest that overall, the United States will need 18 million new college degree holders by 2012 to cover job growth and replace retirees but at current graduation rates, the country will be six million short. Will this trend towards delaying or abstaining from higher education reinforce the impending knowledge gap among entry-level workers? Some interesting food for thought…
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