Is graduate school worth it? Breaking down the real ROI

When was the last time you applied a skill that you picked up in a totally different context?

Maybe your bachelor’s degree in chemistry makes you a master improviser in the kitchen. Or perhaps your poli-sci education taught you negotiation and stakeholder management skills that help you build strong customer relationships at work.

Learning is never wasted, and the applications down the road may be far different from what you expect. But, when it comes to the time, energy and financial investment required for graduate school, is it possible to have too much education?
 

If you have a particular destination in mind for your career, choosing the wrong graduate program (or any graduate program where it isn’t needed) can set you back significantly when it comes to your time, job prospects and skills development.

So, how do you know if and when graduate school is worth it? And how can you be sure that it’s a good investment in your future? Let’s break down the real return on investment (ROI) for master’s and doctoral degrees — and some things to watch out for when it comes to furthering your education.

Earning a graduate degree isn’t easy. Fortunately, the hard work comes with just as many rewards. Here are some of the top advantages you can gain through graduate studies, from financial security to personal well-being to career resilience.

With a master’s or doctoral degree, you can expect to make significantly more money than you would with an undergraduate degree alone. According to the most recent labour market outcomes data from Statistics Canada, the median income for undergraduate degree holders two years after graduation is $58,700. With a graduate degree, that number goes up by more than 30% to $76,400 with a master’s and $79,600 with a doctorate. That’s a substantial leap in income based on education alone.

Five years out of school, the gap narrows slightly, but master’s graduates still make around 24% more than people with undergraduate degrees — the median income is $87,700 with a master’s versus $70,800 with an undergraduate degree. Doctoral graduates make the most at $94,300, earning 33% higher than undergraduate and 7.5% higher than master’s degree holders.

Of course, earning potential varies widely depending on a person’s role and industry. Top earners come from key fields of study, including business, public administration, personal services, military, security, mathematics, computer sciences, education, architecture, engineering and health.

Beyond increasing your salary, an advanced degree can make you a more competitive job candidate, both at the entry level and when going for a promotion. In some fields, a graduate degree may even be required for the particular position you’re interested in. This varies by occupation and is worth looking into when planning your next career move.

If you have your eye on a leadership role, getting a graduate degree first is an ideal way to deepen your professional skills, show a commitment to your field and demonstrate leadership potential. 

If you’re nearing the end of an undergraduate degree and have more career questions than answers, you’re not alone. A four-year bachelor’s program can leave you feeling like you’ve only scratched the surface of an interest or potential career path. It’s not surprising that 34% of recent graduates from undergraduate programs are full-time students pursuing additional education.

Graduate studies is a rare opportunity to dive deeper into a topic that excites you. Whether you do that immediately after your undergrad or in the middle of your career, an advanced degree can help you discover your passion and, with it, a sense of meaning and purpose.

While it may be tough to measure the return on investment for intangible things like self-discovery and exploration, the choice to go to grad school could mean the difference between a career you can tolerate and one that brings you a lifetime of fulfillment.

Even if you’re pursuing a graduate degree for personal interests more than professional ones, the practice of learning also contributes to your personal growth, improving confidence, communication, teamwork, leadership, personal integrity and other skills and qualities that help you succeed in life.

Maybe your job pays the bills, but it doesn’t give you the opportunity to really “nerd out” about the questions that keep you up at night. That thirst for knowledge is a major motivator for staying in or going back to school after an undergraduate degree.

Surrounded by curious people who share your interests, inspiring professors who are experts in their fields, and an environment that’s all about asking questions, you’ll have the guidance, tools and support to challenge yourself academically and creatively. Those key ingredients make graduate school the perfect place to expand your mind — and a worthy investment in your own intellectual satisfaction.

If research is your thing, you’ll have the chance to pursue opportunities you aren’t likely to find in the workplace. Whether it’s a research assistantship with an expert in the field or your own master’s thesis, these projects will allow you to investigate niche areas and topics.

Growing your professional network can have immeasurable benefits for your career, connecting you to new opportunities, ideas and professional development. Not only does a strong network increase your visibility among employers and the likelihood that you’ll be referred for a job, it also gives you access to a hidden job market and insider information around opportunities that may not be posted publicly. But it’s not easy when you’re just starting out to connect to the right people in the right roles and at the right organizations.

Going to graduate school gives you access to a built-in professional network. The peers and instructors you meet in your program, department and faculty could be your future colleagues, bosses and mentors. As part of this community, you can stay connected to career opportunities — but, even more than that, you can tap into support and mentorship that helps you navigate work-related challenges, make career decisions and explore your professional interests.

Rapid changes in technology, geopolitics, the economy and the environment are driving major transformations in the labour market. The World Economic Forum estimates that two-fifths (39%) of workers’ existing skill sets will be transformed or become outdated by 2030. This skill instability will require massive upskilling and reskilling across the global workforce. According to the WEF’s Future of Jobs Report, if the world’s workforce was made up of 100 people, 59 would need training by 2030. Of these, employers foresee that 29 could be upskilled in their current roles and 19 could be upskilled and redeployed elsewhere within their organization. However, 11 would be unlikely to receive the reskilling or upskilling needed, leaving their employment prospects increasingly at risk. 

Increasingly, job stability will depend on lifelong learning — and that’s where a graduate degree comes in. By helping you stay on top of the changes happening in your industry and field of study, graduate school not only builds your skills, but also ensures you have the right ones.

An advanced degree demonstrates leadership, knowledge and mastery in your discipline, making you an asset to any employer and a competitive candidate for new roles. Even if you need to change jobs or organizations, a futureproof skillset supports your long-term job stability and employability, making it easier to land on your feet if there’s disruption to your job, workplace or industry. 

We’ve broken down the many advantages of a graduate-level education, but there are a few costs to watch out for too. Here are some of the most significant ones to keep in mind when calculating your potential return on investment.

Tuition is the biggest material cost to consider when making a decision about graduate school. Tuition for domestic master’s students is approximately $3,000 per term for a research-based program and ranges from $3,000 to $11,000 per term for a course-based or professional program. For international master’s students, research-based programs cost around $8,000 per term, while course-based and professional programs range from $10,000 to $23,000 per term. 

Certain degrees and fields of study have significantly higher tuition than others, so you’ll want to do your research to make sure your intended program is within budget. Fortunately, most full-time research-based graduate programs offer funding, whether through scholarships, teaching or research assistantships, or a combination. 

Alternatively, you may be able to earn an income while you study. Many part-time course-based and professional programs are designed for working professionals, while other full-time programs have a work-integrated learning option, so you can earn money and get experience in the field while you study.

Another major cost to consider is your living expenses, particularly if you need to relocate to a new city to attend the program. If moving isn’t feasible for financial or other life reasons, you may be able to take advantage of remote, online study options.
Lastly, if you plan to take a leave from or quit your job, consider how you’ll manage any lost wages. If savings alone won’t cover your costs, explore student lending options and think about how any debts you acquire during graduate studies may affect your financial future.

A lot of learning that happens in the field can’t be replicated in the classroom. If you’re jumping from one degree to the next, you could be missing out on hands-on experience that allows you to challenge your skills, test concepts and apply textbook learning to real-life contexts.

In some cases, employers may prefer on-the-job learning and experience to advanced academic qualifications. But you don’t always have to choose one over the other. Many graduate degrees have co-op, internship or work placement opportunities that incorporate real-world experience into the learning process.

Consider whether you would benefit from gaining work experience before you pursue a graduate degree or as part of your program. Choosing this route could give you more opportunities to explore your desired career path and find the right fit.

Investing in a graduate degree inevitably means passing up the potential benefits of pursuing a different focus — at least for now. The time commitment for a full-time course-based or research-based master’s program can be anywhere from 30–50 hours per week for full-time studies and 10–25 hours for part-time. Full-time professional programs can demand up to 60 hours per week during peak periods. Given those time requirements, dedicating enough bandwidth to your studies may force other things, such as work, travel, volunteering or other life experiences, to take a backseat for now.
 

From a financial standpoint, the time spent not doing paid work represents lost earnings. And prioritizing graduate school may also mean missing the occasional friend hangout, leaning on your partner to pick up a greater share of the domestic responsibilities, declining interesting job opportunities because the time isn’t right, or foregoing big investments until your finances are in a better place.
 

Ultimately, the decision is about both your immediate and long-term goals. What matters most to you right now? And what gets you closer to your vision for the future? One thing is for sure: the time will pass anyway. What do you want to gain from it?