Education

Some of the most popular graduate degrees don’t pay off, study finds

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by Andrew Dorn - 04/04/26 10:36 AM ET

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by Andrew Dorn - 04/04/26 10:36 AM ET

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(NewsNation) — Some of the most popular graduate degrees don’t seem to offer much, if any, financial return once costs are factored in — or at least that’s the takeaway from a report published this week by the Postsecondary Education & Economics Research Center at American University.

Economists Joseph Altonji and Zhengren Zhu, using administrative data from Texas, found that graduate programs boost students’ earnings by about 17 percent on average, though returns vary widely by field.

Most popular graduate programs with highest returns

Across 18 of the most popular graduate programs, pharmacy (PharmD), medicine (MD) and law (JD) delivered the highest returns, increasing students’ earnings by 114 percent, 110 percent and 59 percent, respectively.

By comparison, returns were significantly lower for programs like business administration (16 percent), social work (7 percent) and clinical psychology (4 percent).

But those gains don’t tell the full story. Once factors like tuition costs and foregone earnings are taken into account, the financial payoff from many graduate degrees shrinks and, in some cases, turns negative.

“Outside some highly compensated professional fields, including law and medicine, graduate school is a risky proposition,” Preston Cooper, a senior fellow at the American Enterprise Institute, wrote in a blog post on the findings.

A master’s degree in psychology, for example, is associated with about a $16,000 increase in annual earnings, but after adjusting for direct and indirect costs, the lifetime return falls to minus 8 percent.

The estimate accounts for what students earn before and during graduate school, helping isolate the impact of the degree itself.

Even master’s programs in engineering, which tend to have high post-graduate earnings, yield modest returns once cost adjustments are factored in: electrical engineering (4 percent), mechanical engineering (4 percent) and computer engineering (2 percent).

Other fields of study still produced high lifetime returns, even after adjusting for costs: MD (173 percent), PharmD (68 percent), JD (41 percent) and MPA (26 percent).

Data key to finding financial value of graduate programs

The wide variation makes it critical for students to have reliable data on the financial value of different graduate programs, the researchers said.

The findings come as Americans have grown more skeptical of the value of a college education, with millions struggling with student loan debt.

The Education Department recently launched a tool to show prospective students the earnings of college graduates when applying for federal student aid.

Graduate degree returns vary across 18 of the most popular programs (Source)

DegreePre-Grad EarningsPost-Grad EarningsCost Adjusted ReturnsMD$48,650$181,691173%JD$55,521$132,52041%PharmD$49,892$132,46068%Electrical Engineering$83,092$130,9534%Mechanical Engineering$73,429$119,5514%Computer Engineering$82,261$113,5542%MBA$72,248$112,45813%Civil Engineering$61,483$111,78419%Computer Science$69,419$110,1066%Nursing$70,215$108,37012%MPA$52,519$79,24626%Biology$41,155$74,38214%Architecture$47,691$72,3544%Education Admin$48,712$68,6828%Psychology$43,537$61,445-8%Curriculum & Instruction$47,899$59,083-2%Clinical Psychology$45,577$57,894-5%Social Work$41,166$55,590-2%

Source: Altonji and Zhu (2025) includes master’s degrees and professional doctoral degrees but excludes PhDs. Analysis of administrative data from the Texas Education Research Center.

*Earnings reflect average annual earnings

**Cost-adjusted returns reflect the estimated change in lifetime income after accounting for the cost of attendance

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