The Unemployed Flocking to Grad School – A Bad Idea that Won’t Die

December 22, 2009 by  
Filed under Money and Behavior

It seems that the young and unemployed are working their way toward becoming slightly older while earning dubious grad school credentials.

According to this Forbes article, graduate business and law programs are all the rage with unemployed Gen-x’ers. Such a dubious plan would backfire with me as a potential employer: “You did what once you couldn’t find a job?  Borrowed your way toward a degree with negative ROI?” I think I want to hire someone with more sense than that.

This is my favorite quote from the article:

The rush to law school comes despite the fact that some big law firms have so little need for new associates that they have been paying new graduates they’ve made job offers to a stipend to go off and do volunteer work.

My prediction is that a lot of these morons will eventually become ambulance chasers, politicians or both (think John Edwards).

Then there are the dumb-ass journalism students:

Even more striking, journalism schools, despite the industry’s relatively low pay and its current financial woes, are also attracting students in numbers that the schools themselves cannot fathom. Publishing bled 90,000 jobs this year and 142 newspapers have closed.

Could it be that these aspiring journalists haven’t read the news that their future “profession” is dying? Shouldn’t that be a question on the grad school application?

I’m sensing a continued inflation and eventual bursting of the student loan bubble. How about you?

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18 Responses to “The Unemployed Flocking to Grad School – A Bad Idea that Won’t Die”
  1. Cat says:

    I applied to grad school this year, but not because of unemployment. I’m going to be seeking a master’s in risk management and insurance (my current field) while working full time. I’m going to a school that waives out of state tuition, offers distance education, and in the top 10 for this field. I’ve already got some consumer debt, so I just consolidated that so I can save up and pay cash as I go (and hopefully qualify for some scholarship money here and there). I really love the field, and the need for risk managers is only growing as new financial regulations come along.

    My first plan was law school- but after realizing that it’s nearly impossible to work through law school and seeing 3 recently minted lawyers I went to college with get laid off, I did the same analysis you did and abandoned that track for my current plan.

    If I could tell high school graduates anything, it would be find something you like to do that you can make money at, then decide how you want to get educated. There are so many options- trade school, apprenticing, internships- that college-law school- ambulance chasing needs to stop being the educational path of choice for every halfway intelligent upper-middle class kid. I would love it if everyone’s senior year of high school included rotating 5 hour a week internships in business, health care, government, manufacturing, building… you know, fields a good number of people actually end up in.

    I kind of went off on my “our education system is broken” speech, forgive me! I really enjoy your blog and thought you might like the POV of someone wading back into the trenches of grad school.

  2. kitty says:

    It all depends on what they are doing now. If someone’s degree is in history or political science than I don’t know if going to a law school is such a bad idea. Sure they are borrowing, but with their current degree they have 0 chance of finding a job or repaying their undergrad loans. Of course, borrowing to get a degree in these fields was stupid to begin with. But I know next to nothing about jobs in law or jobs with an MBA, so I really cannot comment. It all depends whether their additional “investment” would pay off or not, and I lack the knowledge even for an opinion.

    Now, if we talk about fields I know something about like engineering/CS or some other field where the assitantships are easy to get, than it’s a different story. Going to grad school on an assistantship when the economy is bad is actually a very smart idea. This way they get both temporary employement and a free degree that will expand their job opportunities. Beats paying for courses to keep their skills current.

    • MasterPo says:

      Can you tell us more about this “assistanship” thing that pays for your degree and part-time work? Sounds too good to be true.

      • kitty says:

        I am surprised you’ve never heard of graduate assistantships. Didn’t your school have TAs? This is how I got my MS/CS – being a TA. Most large universities both public and private offer those.

        There are two main kinds of assistantships: research assistantships and teaching assistantships. Research assistants work for a professor doing research in their field. A professor has to have money i.e. grant from either government or a corporation to do research, and the professor than hires graduate students to assist him/her. If you are lucky, you’d be able to do research in the same field as your thesis – than you are getting paid for the work you’d do anyway. But it may happen that your thesis advisor doesn’t have any money, than you find work on a slightly different research project. In my university, at least in software, CS graduate assistantships were difficult to get when I was there, and the professors that had grant money preferred PhD candidates. I know though of some students who told they’d stay for PhD to get a research assistantship than changed their mind. But a professor has to agree for you to work for him.

        Teaching assistantships are easier to get. They are given based on your grades rather than need. You apply for an assistantship at the same time you apply for grad school, then you are notified if you got it. In my university, there were additional requirements for assistantship i.e. you didn’t need Advanced GRE in your field for admission, but you did need it if you were applying for an assistantship. But they needed a lot of TAs, so virtually everyone I know who wanted a job, got it, regardless of what they got on advanced CS GRE.

        You are also required to be a full time student and maintain a certan GPE.

        In large universities professors are much more interested in research than teaching, so TAs’ job is to 1) teach discussion sessions/labs for courses that have them; substitute for the professor you work for during this semester if he/she is out of town 2) consult students 3) grade exams/homeworks, though our university had undergraduate “graders” to help with those. If a professor is sufficiently lazy, TAs would also have to come up with exam questions/problems. I worked for one such professor – he just gave lectures, while TAs did most of real teaching. In one case, the instructions professor gave for the course project were so inadequate, that I had to create them based on my notes from the time I took the course. I told him “when I took the course, we were given these detailed instructions”, and he answered – “well, feel free to give them”.

        Graduate assistants are considered “members of academic or graduate stuff” and get tuition/fees waiver. It doesn’t matter how expensive the tuition is, it’s waived. Normal assistantship (I think it’s called 50% assistantship) is about 20 hours of work in theory. In practice, at least for teaching assistantships, you work as needed – you may be asked to attend lectures to know what the professor covered in each course; you have office hours – about 6 per week when I was a TA – when you are supposed to stay in your office and answer questions of any student that might come in. If the course has labs/discussion, than you may have extra couple of hours teaching. Plus some time grading/preparation (if you teach) – when you need it. Sometimes you may be assigned a course you’ve never taken yourself. Then you are supposed to learn everything ahead of time. For me it came out to under 10 hours on some weeks – when no students came for office hours and I could do my own course work – and as much as 30 hours during busy times as when there were too many students during office hours, I stayed extra time. Sometimes I graded into the night. Plus living on campus, I was often stopped by students with questions all over the town…

        In terms of salary, you have 9 months contract with the university. I don’t know how much it is now, but it is more than enough to live on on campus and even save some money. I had about half of my assistantship money left after paying for my private room in “graduate residence hall”, food service with the university and books. I didn’t have a car, so these were all of my needs. But it is more than most part time jobs one can get. Oh, and teaching assistantships paid for one month vacation in December when we weren’t teaching. Research assistants were usually asked to stay and work by their professors – but it depended on the professor and the project.

        There were also at my university a number of “assistantship” positions in other departments for grad students in specific fields e.g. grad CS students could find jobs as programmers. Some of them paid a little more than usual teaching/research assistantship, but they were more difficult to get.

        • kitty says:

          Just to add if it’s not clear – the grad assistant’s salary is fixed, it is a specific amount per month regardless of how many hours you work. You get paid for school breaks even if TAs aren’t working at the time. RAs, as I mentioned, may still need to work – at their professor’s discression. Some undergrad students that were hired as “graders” worked by hour. One of our responsibilities as TAs was to sign graders’ time sheets.

          The exact rules may vary by school, in some schools it may be by-semester. But the general idea is the same.

          Also, out of curiosity I just googled for average teaching assistant salary today. I found 12-18K on one website and 15-30K on another. It doesn’t sound like much, but keep in mind that it’s for part time work, for 9 month rather than a year, and that you get tuition/fee waiver.

  3. MasterPo says:

    Higher education (or training) is NEVER a bad idea!!

    I categorically reject the “ROI” approach to valuing an education!!

    The value of an education simply can not be valued like a cashflow. Sure, you have to have a plan was to what you’re going to do with it. I’ve known way too many people who get a degree in some stupid field like Nordic Forklore or Applied Art History(?!) then cry they can’t find a job. Well, duh!

    But for the rest of us who do get degrees in REAL subjects, and then a Masters or higher in the same or related field, the value is beyond mere dollars. The opportunities that having a degree, especially an advanced degree, open (even in this economy) is beyond measure. You may have to look harder now for them but they are there.

    No degree or certification or training is going to be your golden ticket to EZ Street. But if you don’t have it that will be your one-way ticket to a wonderful $9/hr Wendy’s job! (I’ll take the supersize.)

  4. MasterPo says:

    ps- I will also add that I acknowledge the value of a degree, even a Masters, isn’t what it used to be by the process of dillution (i.e. far more people today have a degree than years ago).

    But that also makes it now a more and more defacto requirement.

    IOW, while having a Masters may not be as valuable as it once was, NOT having a Masters WILL hurt you!

  5. You’re wrong to make the general statement it’s a bad move for someone who is unemployed to go back to grad school. For some people becoming unemployed may have been the kick in the pants they needed to further their education. To be successful in today’s job market you’re going to have to always be in some kind of training on a regular basis to make sure skills are current and relevant. I paid for a graduate degree mostly out of pocket (my previous employer paid for a few work related classes) and it helped me get a job paying $30k more a year. I think most graduate degrees in engineering, technology, science, healthcare, or business would be a good move for anyone trying to advance their careers.

    I agree with you that law school and journalism school aren’t the wisest of choices. The smart thing to do is find something you’re interested in that’s actually in demand and go for it.

  6. cjbr549 says:

    Whether it is a good or bad idea depends on what and how you are going to do it. Masterpo, BULL. I fully agree with TML on the application of ROI to higher education. Getting a Masters just to have more letters on your card is dumb, dumb, and dumb. There is one thing to factor in here that was not by TML, though. That is the “Freshness” of your undergrad degree. I don’t hear this talked about much, but in a competitive job market, the speed at which you get a job out of college is critical. As soon as the next batch of graduates hit the job market, your chances of getting a job just dropped. After a year or two you might as well have not even gone to school to begin with, because you will be seen by employers as tainted (So why couldn’t he get a job to begin with?). This was my experience. I graduated with an undergrad degree in engineering just as my sector of the job market went in the toilet, with two huge industry consolidations that laid off two entire corporate engineering staffs. I did crap jobs for about two and a half years, then decided to go back and get my Masters in the same field as my BS. Through a teaching fellowship (as explained by kitty earlier) and going to the same state school as I went for my BS I was able to go with NO additional student loans. I was also able to forebear my student loans I had from my BS. I started at about 12% higher salary where I eventually went to work due to the advanced degree. I think if your Bachelors is in a field that would normally pay fairly well, going back for a Masters (and not running up more student loan debt) is a good strategy. I will give you a “Fresh” degree; hopefully at about the time the economy is picking up and it will forebear your loans until you are (hopefully) in a better situation to pay for them. But if the field that your BS was in has an average starting pay in the 20k to 30k range, you should really think about just joining the military. At least there you can get a commission with any degree and the pay is not too shabby. Course, you get shot at and people try to blow you up, but hey, you don’t get that kind of excitement in a civilian job (well, except the post office:).

  7. MasterPo says:

    OK, let’s do ROI.

    Look at any study you want.

    Historically speaking, taken as a group, people with more education make more $$$ over their life times than those with less or none. Period.

    Throughout history going back even thousands of years those with formal education (by the standard of their day) always were the more affluent and leaders of the society. It’s only now in the early 21st century (and only in America!) we are telling young people to spend their golden youthful years of achievement, not to work and make something of themselves, but to “give back” to others instead. Now that’s BULLL.

    Even in this economy there are employers who will only higher Bachelor degreed people for some jobs, Masters degreed for others, and PhD’d for yet others. Look at the upper ranks of any mid-size or major company. ALL their senior managers and higher have an MBA at least. We can argue the real value in terms of hands-on knowledge gained from the Masters degree for the position. But the fact remains if they didn’t have a Masters they weren’t going to get those positions. Period. Right there you have got your ROI.

  8. Rick Beagle says:

    Again, MasterPo is absolutely correct. Every study on the matter shows that furthering your education will pay for itself over the course of your career. What continues to baffle me is the presumption by graduates that they have somehow “earned” a job by their sheer possession of a degree. There are a lot of graduates that “graduate” to barely above minimum wage completely unaware that their degrees need to be backed up with hard work, and a good work ethic.
    Rick Beagle

  9. cjbr549 says:

    The only thing that was pointed out by you both, Masterpo and Rick, is that higher education leads to higher pay. Statistically. That does not mean that every individual that gets an advanced degree makes more money, just that in aggregate higher education equals higher pay. But ROI takes into account the INVESTMENT as well as the return. That means that you have to invest money (tuition and fees, books) and time (time not spent perusing a career that does not require a degree). This calculation would be very different for an 18 year old high school graduate and a 40 year old master machinist. It would also be very different for someone contemplating a degree in English vs. a degree in Engineering. Also, will they be going to an in state public school or a private school? Don’t get me wrong, I am all for higher education, I think it helps our country as a whole. But for a given individual not taking into account ROI can leave you spending more time and money on a degree that will not pay for itself in the long run, vs. not going to college and learning a skill through OJT. As stated in my previous comment, I think that if done intelligently that getting an advanced degree during the recession will pay off for many, by making them more competitive than they would otherwise be a year or two from now.

  10. Eve says:

    I think this totally depends on your field/profession. For my case, if I were to be laid off tomorrow, yes I would go back to school full time to get a pHd. I’m in the science field, which higher education is so important in landing a good job in the industry. Most science programs will pay you a stipend to work as an assistant while you attend full time. So, I won’t be adding any more student loans, making money to survive, and I’m getting the necessary education I need to advance in my career path.

  11. Adam says:

    I believe are education system is experiencing three market failures, and thus should not be allowed to operate under free market principles.
    1.) Individuals desire to attend more prestigous colleges, prestigous colleges are created by prestigou faculty. Prestigous faculty are created by researching and publishing works. Students end up paying astronomical tuition rates where only a fraction of that money is being spent on teaching. i.e Professors only teach a few hours a week and dont teach much. Competition causes all universities to follow this process and tuition goes up and students get screwed.
    2.) Education is worthless unless it increases workers productivity. a.) In college many students pick up bad habits, drinking, partying, late nights etc.. decreasing productivity. b.) Most things you learn in college will never be useful in a working environmeent and education is thus a way to show that you are capable of learning.
    3.) when few went to college, showing that you could learn is valuable, but when everybody goes to school and shows the same thing, a college degree shows it true colors. Furthermore, this generation operating under the false premise of returns to education, and lack of jobs for recent college graduates, choose to go to graduate school. Entrance into all graduate schools are artificially inflated by a poor job market, why sit at home when you can get in education. Well because like my law school tuition has increased 20+% in three years while the return has plummetted 20%. Obviously a market failure has occurred where the price of one thing increases while it’s value decreases. Our economy will hit another bubble (like housing) because our youth have mortgaged their future on something that will not appreciate, but in fact depreciate in value, like say houses

  12. Adam says:

    As for the arguement that statistics show that those who have a degree earn more, well consider this, people who come from more connected families can afford to go to school for longer and through their family’s status can achieve higher paying jobs. Example Detroit MI. not alot of people from that city going to college (no offense) and definitely going to be on the lower end of earnings. Allowing people (especially lower and middle class) to go immensely in debt for essentially a list of books to read and a piece of paper is recipe for disaster.

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