It is incredible that people respond to the recession by flocking to graduate school. In a world where people are undertaking massive deleveraging to prepare for tough times ahead, reducing your immediate earnings while taking on tons of debt for graduate school seems exactly the wrong thing to do.
But grad school applications surge in a recession. Many professionals decide that they’d rather wait out the recession ensconced in a school somewhere than take a job they see as beneath them for wages they would have scoffed at during the boom. Our system seems designed to encourage this. Even with our credit markets in turmoil, there are still plenty of student loans to be had and the tax system rewards spending money on education.
If you are a recently laid off financial professional, or one that has seen your compensation drop precipitously, the grad school option is very tempting.
Don’t make this mistake, says Penelope Trunk. Grad school is a terrible investment, and its even worse during a downturn.
- Most business schools aren’t worth the money and even the best schools should only really be considered for networking opportunities.
- The same applies largely to law schools, and most lawyers surveyed will tell you to avoid law school.
- Medical schools are built to feed people into a broken health care system that increasingly won’t compensate graduates for the years they are expected to spend in school and training.
- PhD programs are a scam with no paying exit.
Most importantly, graduate school costs too much and the years spent in school would be better spent learning a trade or starting a business. Almost any job is better than graduate school.
In a world where people did not change careers, grad school made sense. Today, grad school is antiquated. You invest three to six extra years in school in order to get your dream career. But the problem is that not only are the old dream careers deteriorating, but even if you have a dream career, it won’t last. You’ll want to change because you can. Because that’s normal for today’s workplace. People who are in their twenties today will change careers about four times in their life. Which means that grad school is a steep investment for such a short period of time. The grad school model needs to change to adapt to the new workplace. Until then. Stay away.
So what should you do? Your best option is to take a job doing something, anything. If you want to build skills for the recovery but can’t find a job where you expect to do that, take the job anyway and prepare for something like the CFA exam. Credentials showing actual skills are far better than old-fashioned graduate degrees. As time goes on, this trend is likely to continue.