Results 1 to 12 of 12

Thread: on the Economics of Master's Degrees ...

  1. #1
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default on the Economics of Master's Degrees ...

    from

    (snip)Wake Up And Smell The Espresso (Education)

    Here we go again...

    Laura Sayer, unsure of what she wanted to do after graduating from college in 2006, figured a master’s degree was “a safe bet.”

    With $5,000 in undergraduate loans from her time at the University of Cincinnati, Sayer was set back $50,000 more after completing the Interdisciplinary Master’s Program in Humanities and Social Thought at New York University. The 27-year-old now makes about $45,000 a year as an administrative assistant for a nonprofit group, a job that didn’t require her advanced degree.

    More people are losing the same gamble as a 33 percent jump in U.S. graduate school enrollment in the past decade, coupled with an 80 percent surge in tuition and required fees, runs headlong into a weaker job market. Universities are fueling the trend by offering more one- and two-year programs in areas from environmental science to sports management that rarely come with financial aid other than the option for loans.

    And how does that happen in a free market for loans?

    It doesn't.

    Why not? Because nobody in their right mind would loan you $50,000 for two years of school to complete a Masters if there was not a decent return on the investment,
    which means that your income expectations would be boosted by more the fully-laden interest-inclusive cost over the next ten years (the typical repayment period) from where you are without it.

    Yet Laura was able to source the money. Why?

    Because the financial industry bribed, cajoled and scammed its way into turning that debt into something that Laura could not discharge in bankruptcy. As such there was no risk for the lender in making the loan and they didn't give a damn that there was no reasonable expectation that Laura would find a job that paid at least $10,000 a year more with her Masters than she had before it -- a job that in addition would actually require the Masters to obtain.

    Remember, the lender always has superior information because they have the benefit of all the loans they made before and how they performed. They also have spent a lot of time and money modeling loan performance and they thus controlled all the variables that went into those models. As such they are, on an "actuarial" (across the entire universe of these loans) basis far more knowledgeable than Laura is about whether she will be able to pay and they know what factors control for that success -- and which do not.

    Laura has none of this information. She knows only one thing -- how hard she is wiling to personally work, and she has some idea of her personal aptitude. That's all. She's at a severe disadvantage in this evaluation.

    This is why bankruptcy was written into the Constitution and why it's so important. The threat of the borrower declaring bankruptcy and avoiding the debt taken on is the only market check and balance that works to restrain predatory and abusive behavior by lenders. With it no lender intentionally makes a foolish loan because while the borrower has their credit rating ruined the lender loses their actual investment.

    This intentional distortion, which the lenders and government pressed for and profit from, must be addressed. There is no student and no family that should ever consent to a non-dischargable student loan under any circumstances and no adult worth the title "parent" should be willing to provide or file any document related to qualification for same, including but not limited to a FASFA. Among other things it is none of the damn government's business what income and assets a parent has in relationship to their now-adult offspring, as their obligation to provide for said offspring ended at the age of 18 years.

    We will never solve the problem of out-of-control educational costs until parents and students stand en-masse and simply refuse to cooperate with this rank corporate-sponsored and government-assisted financial rape. Neither the universities or the lenders are your friends -- they're predators, you're their "meat", and part and parcel of their predation is capitalizing on our youth's inexperience and a drilled-in "trust in authority" (false and malicious) claim that has been foisted off on them during their previous years in school.

    It's that simple."(snip)

  2. #2
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default Re: on the Economics of Master's Degrees ...

    I would add this perspective from the Bloomberg article that spawned the above commentary at


    (snip)"Trapped for Decades

    Gerrald Ellis, 28, took about $160,000 in federal loans to attend Fordham Law School, and then spent a year searching for a job. He eventually found work at a four-lawyer firm in White Plains, New York, doing consumer protection work.

    Because his student debt is so high compared to his salary, Ellis said he expects to qualify for a plan that would let him pay 15 percent of his salary for 25 years, and whatever debt is left after that is forgiven.

    “I’m trapped for at least two decades,” said Ellis, who lives in Harlem with a classmate who also borrowed more than $100,000. “The debt has an impact on everything, where I decide to live, what job I take. I can’t even imagine having kids with this kind of debt burden. Multiply that by a whole generation.”

    Change in Law

    After a change in federal law in 2006, graduate students became eligible to borrow federally backed loans that covered the full cost to complete their degrees, while undergraduates are limited to $27,000 over four years, according to Kantrowitz.

    The number of students enrolled in graduate schools, excluding law and medicine, totaled 1.7 million last year, a 33 percent jump from 2000, according to data from the Council of Graduate Schools, which represents more than 500 universities.

    Federal and private student loans outstanding for graduate and undergraduate education is approaching $1 trillion, and surpassed U.S. credit-card debt in June 2010 for the first time, said Kantrowitz, who analyzed federal loan data and modeled private student-loan volumes. Defaults are at their highest since fiscal 1997, according to the Education Department.

    Of the $93 billion in total federal and private education loan debt in 2007-2008, the most recent federal data available, about 30 percent was for graduate and professional debt, Kantrowitz said."(snip)


    hmmm ... 15% of earnings toward student loan repayment ... plus 30% of earnings toward federal payroll and income taxes ... plus 7% of earnings toward state income taxes ... for a job that pays about $100k a year. Earning $50k a year with zero student loan repayments ... plus 10% federal taxes ... plus 3% state income taxes ... would probably have provided an equal standard of living ( as well as 2 or three extra years of paychecks versus grad / law school ) !

    The larger point of course is that student loans now outweigh credit card debt ... that a high percentage of student loans are going to wind up being 'technically delinquent' for the next 25 years ( the 15% of income limit on annual student loan repayments with eventual write-off of the shortfall ), and that US taxpayers are 'on the hook' for virtually every student loan dollar !

    ~
    Last edited by Melonie; 12-12-2011 at 01:46 AM.

  3. #3
    Banned
    Joined
    Jul 2005
    Posts
    11,037
    Thanks
    1,891
    Thanked 5,124 Times in 3,086 Posts

    Default Re: on the Economics of Master's Degrees ...

    I have a masters and it was not worth it. I ended up with jobs that only required a bachelors generally. Plus, the two years spent in grad school I could have been working fulltime instead of part time and sub teaching.

  4. #4
    The Jackal
    Guest

    Default Re: on the Economics of Master's Degrees ...

    I wish I had master's degree. I am being denied promotion due to lack of it.

  5. #5
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default Re: on the Economics of Master's Degrees ...

    ^^^ admittedly a very different 'dynamic' is in play with Master's Degrees in India versus America.

  6. #6
    Featured Member KarinaGiselle's Avatar
    Joined
    May 2011
    Location
    Mexico City, Mexico
    Posts
    1,000
    Thanks
    567
    Thanked 1,305 Times in 492 Posts

    Default Re: on the Economics of Master's Degrees ...

    Don't you think it depends on what area of education it is, as well as the university you go to? With all respect but, a Masters in Engineering from a university like MIT, Harvard or Stanford would skyrocket your career just because of the prestige you'd get by graduating from there, as well as the education you'd gain.

    You can't compare a masters in computer sciences (or molecular biology or anything like that) to a master in art or humanities or arts (no offense to those who study them). The formers are usually much harder to acquire simply because of the difficulty the programs have, and it's not easy to be admitted into such programs. Also, in fields like REAL science (Chemistry, Physics, Mathematics, Computer Science, Biology, etc. Again, no offense) and Engineering, it's usually mandatory to have graduate education (Masters, Ph. D's) to be taken seriously by the scientific community and industry. Also, having graduate education in these fields allows the persons to earn a higher income and acquire experience.
    Camming PC specs database and suggested builds ||Post your internet speedtest results .||Wanna stay safe while camming? Find out how ||||||

  7. #7
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default Re: on the Economics of Master's Degrees ...

    Yes, degrees from an 'Ivy League' school ... both by reputation and by 'connections' ... typically provide the new graduate with far better career opportunities in certain fields. However, there is also a very significant 'cost premium' involved i.e. Ivy League tuition costs. Thus one still needs to run the 'cost / benefit' analysis !!!

  8. #8
    Featured Member KarinaGiselle's Avatar
    Joined
    May 2011
    Location
    Mexico City, Mexico
    Posts
    1,000
    Thanks
    567
    Thanked 1,305 Times in 492 Posts

    Default Re: on the Economics of Master's Degrees ...

    It's not necessary to go to an "Ivy leage" grade university to get a useful masters degree which you can apply to your professional career and become succesful. There are many other universities out there, including the public and state ones, that have excellent programs. And you missed my point: I believe it depends on which field you are into, to justify spending time and money in higher education.
    Camming PC specs database and suggested builds ||Post your internet speedtest results .||Wanna stay safe while camming? Find out how ||||||

  9. #9
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default Re: on the Economics of Master's Degrees ...

    ^^^ and perhaps you missed my point ... that, in the USA at least, a master's degree can now serve as an 'obstacle' to landing a decent 'straight' job in one's chosen field !!! This is based on the would-be employer's perception that a person who has a master's degree that applies for a job opening that only requires a bachelor's degree will not be 'happy' in that position, will continue to look for better job opportunites, will create future replacement and training costs for the employer after the employee holding an 'unneeded' master's degree quits to take a 'better' job in the future, etc.

    Same basic would-be employer perception applies to Americans holding bachelor's degrees applying for 'straight' jobs in their field ... but jobs that only require an associate's degree !!!

  10. #10
    Featured Member KarinaGiselle's Avatar
    Joined
    May 2011
    Location
    Mexico City, Mexico
    Posts
    1,000
    Thanks
    567
    Thanked 1,305 Times in 492 Posts

    Default Re: on the Economics of Master's Degrees ...

    I guess you're right. But, at least for getting a good position in companies like Intel, Oracle and others, it's VERY convenient to have a masters degree/Ph.D in engineering or science, which can actually help you land a job. I guess it also depends of the industry we talk about, Melonie. I mean, I don't think it's fair to compare an administrative area to something like humanities or engineering, because each are different and have different requirements to work and to have credibility, also depends of the kind of job you do. Norton, for example, hires Ph.D's only for project leading positions, as well as for R&D. Sure, they hire SOME people with BS, but those jobs are for "more simple tasks" and they always prefer people with higher levels of education.

    /shrugs
    Last edited by KarinaGiselle; 12-14-2011 at 04:48 PM.
    Camming PC specs database and suggested builds ||Post your internet speedtest results .||Wanna stay safe while camming? Find out how ||||||

  11. The Following User Says Thank You to KarinaGiselle For This Useful Post:


  12. #11
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default Re: on the Economics of Master's Degrees ...

    ^^^ granted, but their favorite 'source' for new employees with Master's and PhD's is to hire H1B visa workers originating from China, India etc. at 1/2 the 'going rate' that a US graduate would 'demand' !

  13. #12
    The Jackal
    Guest

    Default Re: on the Economics of Master's Degrees ...

    What is the going rate for American PhDs?

Similar Threads

  1. Jobs without college degrees?
    By teaze in forum Life Support
    Replies: 42
    Last Post: 02-28-2011, 11:50 AM
  2. it was 40 degrees C today I'm melting
    By jaizaine in forum The Lounge
    Replies: 13
    Last Post: 01-01-2010, 02:18 AM
  3. 6 Degrees of Kevin Bacon!
    By Hello_Kitty27 in forum The Lounge
    Replies: 7
    Last Post: 08-03-2008, 02:22 PM
  4. 83 degrees in Phoenix
    By twisterinAZ in forum The Lounge
    Replies: 37
    Last Post: 02-08-2007, 03:48 PM
  5. Online Degrees
    By bambiblue in forum The Lounge
    Replies: 10
    Last Post: 02-20-2004, 09:19 PM

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •