Master’s degrees cost around the world
Tuition cost, graduate degrees, in the US
Not all universities in the US cost $50,000. The most famous do.
The public ones cost around $12,000 if you are a resident. The national average tuition cost for a master’s degree in the US is $19,000, according to the Department of Education.
Ivy League’s tuition cost. Is it worth it?
Yale’s website shows the annual cost is $78,000. The Economist calculated the value of getting an education across 1,275 universities in the US. Yale was ranked 1,270th (worst 5th in the nation).
The tool The Economist uses considers whether students are hard-working, intelligent, as well as other factors (rich and well-connected?). Based on their background, Yale graduates were supposed to make $10,000 more than they make. That’s worth -335,720 over a career. The tool calculates “the gap between how much money its students earn, and how much they might have made had they studied elsewhere”. Available (free) here.
Master’s degree cost around the world
Cost per year, 2 years programs. Source: universities (click on link)
Honk Kong $18,000
A master’s degree is worth $200,00
How much is a master’s worth?As a CFO, my job is to value things. That’s what I have done for masters. On the first article, “How much more will I make with a master’s degree?” I showed that the median salary in the US for someone with a university degree is $5,000 per month. Therefore, the largest expense is the opportunity cost of not working for 2 years. To that, we add the cost of tuition (this article). Then we compare that to how much more money we will make by having a master’s degree (first article).
Here is an example using the median values for the US:
Opportunity cost of now working: -130,000
Tuition cost: -38,000
Higher earnings: 450,000
Value of a master’s degree: ~200,000
When we analyze each case, all 3 variables are different, but the sum is consistently close to $200,000. For example, the opportunity cost is nil for someone who is out of a job. The tuition cost may be reduced by half for someone studying at a public university. The additional earnings may also be lower. On the other hand, the opportunity cost would be $200,000 for someone making $100,000 a year, the tuition cost $100,000 for someone attending an Ivy League, and the additional earnings well above $500,000 for someone working at a Fortune 100 company.
Higher tuition doesn’t translate into higher earnings. The opportunity cost of not working has a significant financial impact, reduced to zero for anyone who is unemployed.
This material from this article is part of a lecture accessible on YouTube.
Education, including a master’s degree, increases our earnings potential. There are other benefits of getting a master’s degree, such as a boost to global mobility and networking.
About the author
Mr Benaroya receives no compensation or endorsements for this. He does it to support education.
George Benaroya is a Global Financial Executive who managed operations at Procter & Gamble, Tetra Pak, Nivea and currently a Private Equity firm. His executive positions include Vice President Finance, Global Controller & CFO.
Mr. Benaroya lived in 9 countries and visited 193.