In the recession, does advanced education really pay off?

Snapshots of life at home.
April 10 2009 2:27 PM

Help, My Degree Is Underwater

In the recession, does advanced education really pay off?

(Continued from Page 1)

Suddenly, it seems to me that there is a real possibility that I, like tens of thousands of others, am holding onto a degree that is actually underwater. Look at student loans, the opportunity cost of taking two (business) or four (law) or eight (medicine) years off of your working life, add in a horde of other people with the same qualifications as you who are competing for a handful of available jobs and it's easy to see just how much the job market in these professions looks like a bubble that is about to burst. [Actually, law school is three years.]

Economists would dispute this. "When things recover, it's going to be the highly skilled who are still in greatest demand (as has been true for the last three decades)," says David Autor of the Massachusetts Institute of Technology. "So, for someone considering engineering, medicine, computer science, economics, law, biology, etc., I would say 'go.' " Autor says the only question mark is whether Gordon's degree, the MBA, will retain its previous value given the financial crash. For everyone else, "The recession makes education look like a better deal than ever because the opportunity cost of investing in your human capital has not been this low in quite some time."

Gordon might counter, yeah, but it sure feels rotten now, and who really knows when and how this downturn will end? It's the grim short term and the uncertain longer term that is grinding graduates down, I think, even if in statistical terms, they should be fine.

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I also heard from law school graduates with $200,000 in debt who wonder what they were thinking as firms downsize and implode. "It is a nightmare," writes Benjamin, who got laid off a few weeks ago without a day's notice. He has moved back in with his parents—until he leaves to go teach English in Korea. "The pay is decent and the expenses are covered. I highly recommend other college graduates who are in my position look into this. But, my God, I have to leave the United States of America. What in the world happened?" (Autor would tell him to relax: "As for the law degree being underwater: Lawyers may get their shoes wet during the recession, but high school grads can't even see the surface they are so far down.")

Then there are the master's degrees. I've wondered whether some master's programs are a bit of a scam, moneywise, since students often have to pay for them. Tamara, who has a master's in physician assistant studies, picked her degree when she saw it ranked high in a CNN poll of jobs for the future. She is working, but given her $200,000 debt, she says, "It is hard for me to say at this point whether I made the right decision to go to graduate school. Although I only made $29,000 while working in a research lab, we lived debt-free, owned a nice home, and I had plenty of free time to spend with my family. … I hope one day to look back on my decision to pursue graduate education with pride, but now the feeling that overwhelms me is regret."

In the same boat: A guy with a master's in international relations is working at a supermarket and just went on Medicaid. And what about the people whose degrees and passions lie along paths that are eroding beneath them? As in, oh, the dear journalism students. Sam writes that when he started journalism school at the University of Missouri in 2004, "I was OK with the low pay expectations and was fully willing to start at the bottom of the food chain." He promptly got a job at the local paper "and just as promptly, was laid off." He's working at Applebee's. "My question, I suppose, is this: For a person who had dreamed of covering sports for a newspaper (and developed few web-based skills to supplement his writing skills), what is the best option? Go back to school in a different area (which I can't afford), keep pushing my resume to those who aren't hiring anyway, or give up my dream for something more plausible?"

As some of my e-mailers recognize, their dilemmas are those of the relatively fortunate. They are young. They have advanced degrees. As Sam wrote, "It should be noted that I'm a very lucky, healthy, happy 23-year-old male who, aside from having little money and having caught a bad break on his choice of careers, has nothing to complain about." For a dose of perspective, I'll include an e-mail from Dani, who is 28, lives in Chicago, and couldn't go to college right out of high school. She works in a warehouse office and will finally graduate in May with a two-year associate degree for which she scrimped and borrowed and is "fighting tooth and nail for." She can't see how she can afford to go on in school, and she points out that "for those of us not privileged enough to have [a college degree] being seen as not as valuable as someone who is 'smarter' than us because they have a degree puts us behind in the job market even further. We are already worried about our futures, and the thought that this economy or even one bad thing happening [could] disrupt our paycheck-to-paycheck lives, is more than terrifying." It is bad to have a degree that you fear is underwater. But it's still worse to have no degree at all.

*****

Next question: Have you uprooted yourself or your family because of the recession—downsized to a smaller place, moved in with your folks, gone to a different city? I'm interested in stories about the recession and the American habit of picking up and going someplace new when the going gets tough. Send them to me at doublex.slate@gmail.com. E-mail may be quoted in Slate unless the writer stipulates otherwise. If you want to be quoted anonymously, please let me know.

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