By Jeff Strohl, Director
Mixed signals are looming over the American economy, perhaps most ominously for those just starting their careers. The overall unemployment rate for recent college graduates is 5.3 percent, up from 4.3 percent in January 2024—leaving many young people disillusioned with the job market. Historically, when employers tighten their belts, recent college graduates may consider whether graduate school is a better option than looking for a job. Indeed, during economic downturns, those seeking employment have often been advised to stay in school or pursue further education. But does that conventional wisdom still hold?
Like the economic signals, the evidence for the value of graduate degrees is mixed. At the median, graduate degrees lead to higher earnings than bachelor’s degrees—$99,000 compared to $78,000 for workers ages 25–64. However, the overall wage premium for graduate degrees relative to bachelor’s degrees hasn’t changed much for decades, even as the inflation-adjusted cost of obtaining a graduate degree has increased by 233 percent since 2000. Beneath these data, there is substantial variation by field, institution, and program. For example, graduate degrees in STEM (science, technology, engineering, and math) lead to the highest median annual earnings at $128,000, compared with $69,000 for humanities and the arts and $70,000 for education and public service.
These broader aggregate numbers can also be misleading when further variation at the program level isn’t taken into account. Consider outcomes for graduates in computer sciences, traditionally seen as a high-earning field within STEM. At the top end, graduates of some master’s programs in computer science make more than $200,000 just four years after completing their degree. But at many other computer science programs, graduates’ median earnings fall short of six figures. Beyond computer science, a review of our data tool reveals high variation in many other fields—such as health and medical administrative services, where earnings can range from $53,000 to $255,000. With so much variation even within some of the most lucrative fields, prospective students should carefully consider all available information—including reviewing program-level costs and likely debt and earnings—before deciding where to commit their time and money.
The trouble is that even when prospective students want this information, it isn’t always readily available. The Department of Education’s College Scorecard is a key public source of program-level data. The College Scorecard offers broad data coverage of the largest graduate programs, which collectively represent 65 percent of master’s and professional degree program graduates who took out federal loans. However, due to student privacy concerns, the College Scorecard suppresses earnings and debt data at smaller programs. As a result, the College Scorecard offers complete earnings and debt data for just 16 percent of master’s degree programs, 25 percent of professional degree programs, and 4 percent of doctoral degree programs.
While other resources, such as the Bureau of Labor Statistics (BLS) Occupational Handbook, provide data on the average earnings outcomes by occupation, these outcomes can—and do—vary widely within fields. Without full debt and earnings data, it is challenging for prospective students to make fully informed choices. For example, aggregate BLS data would indicate that opting for a master’s degree in business is a good choice. When a prospective student then turns to the College Scorecard to narrow down their MBA program options, they would see that the median post-graduate earnings for those programs range from more than $300,000 to less than $50,000. But the absence of complete information about debt and earnings across all MBA programs makes it difficult for students considering an MBA to know which program is the best investment, given their particular needs and interests.
Prospective graduate students should not be left on their own to navigate this ocean of information. The stakes are too high: our analysis of programs with available earnings and debt data in the College Scorecard reveals that 41 percent of master’s degree programs and 67 percent of professional degree programs would fail a debt-to-earnings test, indicating that their graduates are not earning enough to repay their student loans. These poor outcomes occur at all types of institutions, including public flagships and Ivy League schools, and across all academic disciplines.
At a time when skepticism about the value of higher education is on the rise, institutions would do well to embrace increased transparency. It is an opportunity for them to make an evidence-based case for the considerable value that many programs provide. In the meantime, we must not lose sight of the fact that graduate degrees offer higher earnings overall and a path to career advancement, and they are increasingly in demand among employers, particularly in the highest-paying occupations. We need more people with graduate-level skills and education, not fewer. Many graduate programs do provide meaningful value, and presenting the numbers to back that up could help reestablish confidence in graduate education. But without complete data, students will be gambling on their futures without knowing the odds of success.
