Grad School. Does it make sense for you anyone??
It has been for years a go-to option for the young and ambitious, with dreams of bigger paychecks, important titles, and pride at high school reunions.
If we sit back and actually take in the entire grad school process, the true absurdity of a ‘graduate degree’ comes to light. Here I explore a few of those quirks in a much too long writing.
*Why do we go to grad school?
*The cost of grad school, its effects on students, and the reasons behind the ever escalating tuition rates.
*The failure of universities on the most fundamental level.
*and, finally, why grad school is dead, and what our generation values.
I also wanted to elaborate on alot of the points, however, in that case, this would turn into a full book. The main points shine through.
First: Why do we go to graduate school?
Many, myself included, have long envisioned going to graduate school, and the recent economic conditions made the decision to make the jump just that much easier.
Across the board the reasons are fairly uniform:
You can’t find a job
You don’t want a job
Your friends are doing it/parents did it
You realize you didn’t really get anything out of undergraduate studies (..and u think grad school will be different)
You believe it will lead to a better future (higher salary, better job, more attractive spouse, etc)
You have to do something, and don’t really have any plan. But grad school is a plan, so it fills that void.
Overall, it’s kinda the default choice for those who aren’t really doing anything else, but need to pretend that they are doing something for a while to make themselves and their supporters feel good.
So all in all, grad school may not be the optimal choice for you personally, but you do it because you really don’t have many other options, or the other options are not that attractive.
Why do we do this?
Well, if we listen to anything Dan Ariely, a behavioral economist at MIT, says, it is because we are bad at making decisions based upon what we want, and we are easily influenced by extraneous issues.
In research presented in his book, Predictably Irrational, Airely found that if you are confused but you have a default choice, you are going to take it.
An example Airely uses is the rate of organ donation among people from various countries. It shows a wide variance of donation rates across otherwise similar countries. Germany at less than 10%, and Austria at almost 100%. Well, it turns out that it has alot to do with the form that the countries distribute regarding organ donation. In countries, like Austria, where you have to opt out of donation, there is nearly 100% donation rates. In the countries where you have to opt in, there is usually under 10% donation rate.
Ariely argues that the tendency to chose the default option is not because people do not care about the issue. On the contrary it is because people care so much about the issue, their health, ethics, etc, that it is a difficult decision and given a default option, people opt for whatever gets them out of the decision making process the quickest.
To relate, something I myself was guilty of was thoughts such as “Well, if I get into ____ school then I will just go, no looking back.”
Grad school is a tough choice, and is something not enough people properly and clearly think through.
From vital organs with the next point:
Grad School Costs an Arm and a Leg
Graduate Education as a default option is not free. Far from it, depending on where you chose to attend.
Contrary to popular media, often the debt incurred from attending grad school closes far more doors than the degree itself can ever open.
The majority of students do not have the financial means necessary to cover costs of tuition, living, etc during graduate studies and resort to loans-from the US government and beyond.
The thinking is that graduate education is a ‘good investment’ and that these people will be able to pay off the substantial debt with their new ‘good jobs’.
According to an article in the Wall Street Journal the U.S. Education Department released a report showing that federal student-loan disbursements—the total amount borrowed by students and received by schools—in the 2008-09 academic year grew about 25% over the previous year, to $75.1 billion.
The exponential increase of student loans and lending over the past 20 years is creating a bubble which casts shadows over the recent real estate meltdown.
How does this play into why graduate education is so expensive?
How much is a house worth?
Well, in simple terms a house is worth what a buyer can pay for the house. Since very few people have the reserve cash to pay for the house (much like grad school costs) they choose to borrow the difference. So, in the end, how much a buyer can pay for a house is directly related to how much a buyer can borrow. When times are relaxed, and lending is ever increasing, the price of homes skyrockets, creating bubbles, as seen starting in 2006.
The same thing happens at universities, except it is not the price of homes which skyrockets, it is the price of tuition. According to the Bureau of Labor Statistics, since 1979, tuition increases have grown at a higher rate every single year, and almost twice as much at times. Colleges continue raising prices, even in recessionary times, because the government will continue lending more and more money to the students.
However all this extra credit isn’t benefiting students. In the end it only leads to inflating the price of our education and closing our career casket with a lid of oppressing debt in an environment of stagnant wage growth and poorer economic prospects.
If you are like me, you think about debt, and concerned about it, however do not ever really think about how it will affect your life. Are my days of traveling aimlessly done forever? Will I even be able to afford to live without roommates?
A growing body of research suggests that tough loan payments are affecting major life decisions by recent graduates, forcing them to put off traditional milestones—from buying a first home to even marriage and having children.
In a 2006 survey of 1,508 graduates under age 35, 39% of college graduates say it will take them more than 10 years to pay off their household’s education-related debt. The survey says that this has caused a delay in certain key “rites of passage” associated with adulthood. Forty-four percent of respondents said they delayed buying a house because of their student loans, while 28% delayed having children.
The government, by lending more and more money, is not helping students, it is merely sustaining an asset bubble. In the long run, as any economist could see, those who want the asset (college education) will have to pay much higher prices because the government is providing too much credit to finance the purchase.
By not allowing the price to fall, the government is continuing to bury students in the debt. The government needs to step aside and allow the price of college to fall. If not the oppression of debt will be ever increasing, until, as I think will happen anyways, people will wake up and refuse to pay for this ‘asset’ of higher education.
Well, back to pricing. Side rant aborted.
What about a graduate degree? Sure the price is super high, and I am incurring all this debt, but it is worth it right?
Well, unlike a house, a college degree is much harder to place a value upon. Perhaps the value would be correlated to the incremental increase in earning power over the working lifetime of the recipient.
In other words, the value of the degree is the the increase to your salary each year after obtaining it. This of course, is viewing a graduate degree as an investment good as opposed to a consumer good. America tends to view higher education as a consumer good. This is a problem, higher education needs to be viewed an an investment, not a consumption good. This is why our society is not concerned with a luxury automobile which costs $500,000. Society expresses no concern over this because to purchase such automobile is a voluntary action by a rational consumer who can weigh the costs versus the benefits.
However, society does get concerned when it comes to higher education. Parents who cant get their children into better schools are concerned and want to know why. Congress holds meetings about higher education costs. Higher education consumers apparently are not believed to be making higher education choices based on the full-information, rational choice model. Nor do they trust that individuals can make rational investment choices about their futures.
Second side rant aborted.
Back to the value issue. Does the incremental increase to earning power make up for, and provide a return on, the tuition and time investment of graduate school?
Simple answer: there is no simple answer. This answer is highly depended on both the individual, their degree, their school, and other circumstances. However, for the majority of degrees out there, the answer is a resounding ‘no’. Further details and numbers on specifics will be included in a follow up post.
One thing is certain though, graduate education does not certainty lead to a higher salary. Employers are realizing the grad school game, and how it rarely relates to higher productivity for them, the end user of you, the graduate.
Which brings me to my next point
Why grad school fails
“The major public policy problems surrounding higher education are at the intersection of quality and finance; focusing on money without a parallel attention to purpose and outcomes perpetuates data chases to no particular effect.” -
Jane Wellman, in her paper for the Commission on the Future of Higher Education
If the point of graduate school is to become successful in your particular field, one would assume that they are very good at giving the students the skills needed to excel.
This is not the case.
It comes down to a basic problem, which is a virus found at all levels of education:
Knowledge(Information) vs Skills.
Graduate schools (and undergraduate) can teach facts, dates, information, well. However, they fail at teaching skills, and skills are what translate into success.
At alot of Universities, the faculty go into academia, not because they like teaching, but because they like their academic subject.
Students can learn and retain information for specific tasks, assignments, however to cultivate skills is a process which cannot be mass assimilated. In my opinion, it is impossible to broadcasts skills to an audience in a lecture hall. Skill comes from practice, and practice is found outside the classroom walls.
Students can amass knowledge, refine retention techniques for information, however, cannot absorb skills through class.
Great knowledge is not the same as great skill. Decent knowledge doesn’t guarantee even decent skills. Holding a degree in English does not mean the person can write. Holding a degree in Philosophy does not mean a person can think. This is a common misconception and one which perpetuates the problems in our university systems. The assertion that a graduate degree in something means that person is a ‘master’ of said skill is incorrect. It is merely an antiquated belief held up by universities, and those currently holding said degrees to allow them to feel better about themselves.
Even top-tier MBA degrees often say more about the desire to have an important credential than about any greater capacity to be a good leader or manager.
Treating education as the best proxy for human capital is like using patents as your proxy for measuring innovation — its underlying logic shouldn’t obscure the fact that you’ll underweigh market leaders like WalMart, Google, Tata and Toyota. Dare I point out that Microsoft’s Bill Gates, Dell’s Michael Dell, Apple’s Steve Jobs, Oracle’s Larry Ellison and Facebook’s Mark Zuckerberg are all college drop-outs?
The death of the graduate degree
Just because something has been around in the past, and is woven into our fabric, does that make it best for current day practices? Well, if we look to our past we find many examples (slavery, segregation, …) of practices once common place which outgrew their times.
Today’s generation is not as accepting of social norms and commonplace as our yesteryears. I am certainly not the only one who feels that the scheme that is graduate education is one that is flawed, and will cease to exist, at least in its current form, for much longer.
Skills are the commodity, education lines on resumes are not. As this generation realizes this, and takes more action to develop our personal skills, society as a whole will recognize the inefficiencies in graduate and undergraduate education, and demand an overhaul or abolition of the current system.
Resumes don’t highlight educational achievements anymore. That’s old school, and as outlines above, not a good indication of very much but a desire to have graduate education. Resumes will start emphasizing skill sets. No more lists of achievements and brownie points, they will be portfolios of performance. There will be links to blogs, published articles, YouTube videos of speaking engagements, and webinars. The stapeled two page rsume will be a showcase of skills to allow the employer to interact and come in contact with their candidate’s work. The resume is rapidly mutating away from a documentary string of alphanumeric text into a multimedia platform that projects precisely the brand image and substance a job candidate seeks to convey.
Graduate Schools are rarely the correct choice for a person. More often, it is the default choice, which we back into for various reasons and excuses for why our current life and lifestyle are not how we want them. “Oh if I only had my (fill in overpriced degree here)”.
In addition, the dramatic increase in tuition expenses due to the large quantity of credit available leads to a debt load which interferes with a person’s life for years after graduation. These effects are not nominal, ranging from delaying marriage, to moving back in with parents.
The lack of certainty in the worth of degree makes it a highly risky bet, and one which does not guarantee future success. In our day and age, skills are the highest valued asset on a resume, and this is a point which is resonating throughout the industries.
RIP Graduate Degree
Whewww, long, disorganized, and beautiful. There you have it. My thoughts on graduate school. I actually have much more that I want to post on my opinions on specific degree paths (JD, MBA, MS, PHd, etc) however, this is already much too long, and those will have to come in a follow-up post.
So let’s hear it. Defend your degree. Tell me I am wrong.