Should You Pursue a Master's Degree During a Recession?

If the forecasts are accurate, we are heading toward a post-coronavirus recession on a scale similar to the 2008 financial crisis.

That will undoubtedly make it harder for graduates to find jobs after university, leading some to wonder whether they should stay in school to “ride out” the worst of the downturn. But is postgraduate study really the answer during a recession? Or should you take your chances on the job market instead? Here, we look at the pros and cons of each option.

Will a Master’s Degree Give Your Career a Big Boost?

One of the most important things to consider is whether postgraduate study makes sense for your future career goals. If you want to work in a field where a master’s degree or a higher qualification is essential for progression, such as psychology, law, or medicine, then going straight on to a master’s after university is a sensible choice, especially during a recession.

In highly competitive fields such as business and technology, a master’s degree may also make you more marketable and help your application stand out.

However, there is a risk that you could become overqualified, because companies with smaller budgets during a recession may not be able to pay what you believe you are worth, which will reduce the ROI of your postgraduate study.

Postgraduate programs, especially in business-related subjects, often have extensive alumni networks and networking opportunities, which can make your job search easier. Careers services can also keep you up to date with the latest hiring trends. In addition to networking events, your professors may be industry leaders with strong connections to relevant people and companies.

If your chosen career path does not require further academic study, or if you are unlikely to get a higher salary and/or a more senior role as a result, you may find that short-term or part-time personal or professional development courses are a better way to build your skills.

Do you have any relevant work experience? If your undergraduate degree did not include a placement or internship, it may be a good idea to gain some real-world experience before pursuing a master’s, depending on your field of study. If you go into postgraduate study without work experience, employers may see you as overqualified for entry-level roles but underqualified for mid-level positions.

You also have to remember that by the time you finish your master’s degree, the recession may already be over. If you are already working, you could consider part-time postgraduate study so that you can keep earning while you learn. Of course, this will significantly extend the time it takes to graduate.

You may want to pursue a master’s degree to move into a new field. If so, make sure the industry you want to enter is growing, and research hiring trends.

Can You Afford Postgraduate Study, and Can You Get In?

Obviously, cost will be a key factor for most people deciding whether to pursue a master’s degree. You may need additional student loans and end up taking on more debt, although you may also find that your employer will pay for your postgraduate study or offer funding. You can also check whether you qualify for generous grants or scholarships.

See whether your undergraduate institution offers discounts to alumni who return there for postgraduate study. Sometimes you can get as much as 25% off. However, going to graduate school could actually make your financial situation worse during a recession, because your student debt will increase.

Before enrolling in a master’s program, it is a good idea to calculate your ROI. Obviously, you cannot predict your post-graduation salary exactly, but you can research the median annual salary for the kind of role you hope to get. The math for calculating ROI is simple: projected earnings minus the cost of the postgraduate program equals ROI.

You also have to remember that a one-year full-time master’s program will cost you a year of potential earnings. This is known as opportunity cost: the short-term financial cost of removing yourself from the workforce.

Competition for postgraduate places will be fiercer during a recession, because many people choose to “wait out” the downturn in education. You need to make sure your grades are strong enough to get into a good program. In the UK, that usually means an undergraduate result of a 2:1 or above, or at least a 3.0 GPA in the US. You may also have to take the GRE (Graduate Record Examination), especially if you want to study for a business degree.