A new study shows that 40% of master’s degrees aren’t a good investment. That's because the cost of getting the degree doesn’t outweigh the lifetime earnings boost that comes with it. Wondering which degrees made the cut? Here’s a round-up of the most (and least) profitable graduate degrees.

Thinking about going to graduate school? Hold up a sec.

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A recent study by the Foundation for Research on Equal Opportunity (FREOPP) reveals an alarming truth — 40% of master’s degrees fail to produce a positive return. In other words, the cost of getting the degree doesn’t outweigh the higher salary you earn down the road.

So before you waste time (and money) on a precious degree, check out this round-up of the most and least profitable graduate degrees.

But First, What Makes a Graduate Degree “Profitable”?

According to the study, a profitable degree is one where the cost of getting the degree is less than the difference in lifetime earnings between those with the degree versus those with only a bachelor’s.

In other words, you make more money with the degree than you would without it.

And if you think about it, a profitable degree is the entire point of going to graduate school. If you’re going to sink thousands of dollars into your education (and forgo income you could’ve been earning in the labor market), it’s going to be in the name of higher lifetime earnings.

But what happens when you get that degree and the pay bump never comes? Enter: graduate degrees with negative returns on investment (ROIs).

Least Profitable Master’s Degrees

The sad truth is, 40% of graduate degrees aren’t worth the cost of attending. This is because these degrees have a negative return on investment, where the salary bump never outweighs the cost of attending.

So which degrees fall into this dreaded category? The FREOPP study analyzed over 14,000 graduate degrees and found these areas of study to be the least profitable:

  • Arts, humanities, and theology.
  • MBA and other business degrees.
  • Psychology and social sciences.
  • Health (excluding nursing).
  • PhD programs in education.
  • PhDs in non-STEM fields.

The MBA part may be shocking, so let me explain. The study found that MBAs consistently rank among the top degrees that aren’t worth the money. This is because an MBA isn’t responsible for most of a person’s high earnings. In most cases, an MBA attracts people who are already earning a high salary or could be with just their bachelor’s.

Read more: 21 Steps To Landing a Higher Paying Job

Most Profitable Master’s Degrees

As you may imagine, the most profitable graduate degrees tend to be in STEM, doctoral, and professional tracks. More specifically, 86% of advanced degrees, such as medicine and law, have a positive ROI — much higher than the 40% average.

But the study also notes that some of these fields — such as law — have seen slow or stagnated growth. So while they may have a high ROI, that doesn’t mean the market demand is there.

Here’s a closer look at the most profitable master’s degrees in today’s job market:

  • Computer science, mathematics, and engineering.
  • Nursing.
  • Biology and life sciences.
  • Professional degrees in law and medicine.
  • Social work.

Breakdown of the Most and Least Profitable Degrees

This table breaks down the expected value of a master’s degree. It distributes the ROI by field of study, so you can see your likelihood of earning a positive or negative return.

As you can see, computer science, mathematics, engineering, and nursing are almost guaranteed to have a positive ROI. While fields like art, humanities, and theology are almost guaranteed to have a negative one.

Master’s degree type% of degrees with a negative ROI% of degrees with a positive ROI
Computer science, mathematics, and engineering3%97%
Social work12%88%
Biology and life sciences22%78%
Psychology and social sciences42%58%
Health (excluding nursing)44%56%
MBA and other business62%38%
Art, humanities, and theology85%15%

Source: Foundation for Research on Equal Opportunity

Read more: Don’t Have the ‘Right’ Degree for Your Dream Job (and Dream Salary)? How To Convince Employers You Do

Is Going to Graduate School Worth It Financially?

It depends on the degree you’re pursuing, your field of study, and other factors like the economy. But in general, the answer is: maybe not.

Despite what you may have been told, a graduate degree is not always a ticket to a bigger paycheck. In 40% of cases, it’s simply not worth the cost.

There are plenty of reasons to get a graduate degree. But if your only motivation is to make more money, you might want to reconsider.

So, Why Do So Many People Continue To Pursue Graduate Degrees?

There are a few possible explanations. First, people may not be aware of the data. If you’re like me, you’ve been taught all your life that more education = more money. If you accept this as truth, you may not ever question it.

Second, you may be pursuing a degree for reasons other than money. Maybe you’re passionate about theology or humanitarian efforts. In this case, it’s okay to pursue your passions even if it doesn’t lead to more money.

And third, maybe you’re hoping that the job market will improve by the time you graduate. Life is unpredictable, and you never know what skills may be in demand in the next five to 10 years.

How Profitable Is a Graduate Degree Compared to a Bachelor’s Degree?

It’s estimated that the median master’s degree increases your lifetime earnings by $83,000. This takes into account tuition, fees, and opportunity costs. So if your career lasts 40 years, that breaks down to an extra $2,075 a year.

For reference, the median bachelor’s degree has an ROI of $306,000. This means it’s much more worthwhile to get a four-year degree than it is to continue onto graduate school.

The FREOPP study notes this is for three main reasons:

  1. Many graduate school programs are expensive.
  2. You have fewer financial aid options for graduate school.
  3. When calculating ROI, you have to factor in the income you’d give up to attend graduate school. This is income you could start earning immediately if you hopped into the workforce with just a bachelor’s.

Alternatives to Graduate School

There are other ways to increase your earnings without shelling out thousands of dollars for a degree. So if you’re thinking graduate school isn’t for you, here are a few alternatives to consider:

  • Get a job in a high-paying industry — preferably one that doesn’t require a degree.
  • Negotiate your salary.
  • Learn new skills.
  • Start your own business.

Read more: 42 High-Earning Careers, No College Degree Required

Bottom Line on Master’s Degrees

Pursuing a graduate degree is a big decision. And it’s not always a good investment. Make sure you weigh the pros and cons carefully before you commit. And if you decide not to go to grad school, that’s OK too. There are plenty of other ways to achieve your career goals.

Featured image: ITTIGallery/Shutterstock.com

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About the author

Cassidy Horton
Total Articles: 51
Cassidy Horton is a finance writer who specializes in banking and insurance. She earned her MBA and bachelor’s degree in public relations from Georgia Southern University — and has since published hundreds of finance articles online for Forbes Advisor, The Balance, Money, Finder.com, and more. When she's not helping Millennials and Gen Zers gain control of their finances, you can find Cassidy hiking around the Pacific Northwest, cuddling her two cats, and eating way too much fried chicken. Connect with her on cassidyhorton.com or LinkedIn to see what she’s up to next.