Some higher degrees are giving negative returns, study

Pursuing an advanced degree is often touted as a ticket to a higher salary, but a new report from the American University’s Postsecondary Education & Economics Research Center suggests a more complicated reality.

The study analyzed the income of 800,000 Texas students before and after grad school.

The research shows that, on average, a graduate degree boosts lifetime earnings by 17%. However, once tuition costs and forgone income during school are factored in, several popular fields actually yield zero or negative returns.

Programs in psychology (-8%), clinical psychology (-5%), and social work (-2%) effectively decrease a student’s lifetime wealth compared to staying in the workforce with only a bachelor’s degree.

In contrast, medical doctorates remain the gold standard for investment, offering a 173% net earnings boost. Other degrees that offer a similar boost to adjusted returns are pharmacy (68%), law (41%), and master’s of public administration (26%).

Economists emphasize that students should consider several factors when choosing a graduate degree. They often mistake higher post-grad salaries for program value, failing to consider what they would have earned without the degree.

Factors such as institutional ranking, the ability to work while studying, and prior undergraduate earnings also influence the final math.