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An economic downturn usually sparks renewed interest in re-education.
Historically, graduate school enrollment increased during recessions, and workers “up-skilled” over time or moved to other industries for better career prospects and salaries. increase.
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“When the economy is down, there’s more interest in graduate school,” says Eric Greenberg, president of the Greenberg Educational Group, a New York-based consulting firm. “The umbrella of education is like a hedge.”
But this economic cycle is unlike any other.
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As furlough announcements pour in and recession fears take hold, fears are growing that the job market is finally cooling. But the U.S. labor market remains strong, with the unemployment rate hitting a record low of 3.5%, according to government data.
Still, some experts say a recession may be looming, raising the question of whether it makes more sense to go back to school than weather a possible job loss.
But there are many factors to consider, such as cost and greater debt burden, that can undermine the economic return on investing in graduate education, Greenberg said. “There are nuances in play.”
Here are some of these key considerations:
This is not your average economic cycle
History is often the best guide, but in this case the usual patterns may not apply.
In 2020, graduate school enrollments across the country initially dropped, but recovered rapidly in 2021 and dropped again in the fall of 2022. A 1% drop this year reversed his 2.7% increase the year before, according to a report by the National Student Clearinghouse Research. Center based on university data.
Enrollment rates could rise again in 2023, in part because this time the recession won’t last as long as it did during the pandemic, said Doug Shapiro, executive director of the National Student Clearinghouse Research Center. explains.
He said there is usually a lag of up to a year between the slowdown in the economy and workers returning to school for retraining.
“Without hopes of a quick recovery, it could lead to the familiar uptick in registrations,” Shapiro said.
Improved access to advanced degrees
Students walk in front of the Stanford Graduate School of Business in Stanford, California.
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With more programs available remotely, advanced degrees are also more manageable than they were pre-pandemic.
For example, tech workers affected by the recent wave of layoffs can enrich their resumes by adding graduate qualifications and certificates available online, Shapiro said.
To further expand access, some schools such as Northwestern University’s Kellogg School of Management, MIT’s Sloan School of Management, Dartmouth’s Tuck School of Management, Duke University’s Fuqua School of Management, and UC Berkeley’s Haas School of Management , waives exam requirements and fees, and extends exam periods. Application deadline for recently laid-off employees.
“There is currently an influx of highly talented individuals in the labor market, and while you may have considered business school one day, the path has taken an unexpected and drastic turn. Financial aid, and said in a statement.
potential return on investment
Going back to school usually costs money. According to the U.S. Bureau of Labor Statistics, workers with master’s, professional, or doctoral degrees earn the highest overall earnings and have the lowest unemployment rates.
But in addition to the economic payoff, there are also higher costs. In less than 20 years, median debt for master’s degree borrowers has nearly doubled the cost of a graduate degree, especially in the form of student debt, according to the Center for Educational Data and Policy at the Urban His Institute. surged.
“The fundraising aspect greatly influences decision-making,” said Allen Coe, CEO of Cardinal Education, a California-based tutoring, exam preparation, and college admissions company. says.
The 2022-23 federal student loan interest rate rose again to 4.99% from 3.73% last year and 2.75% in 2020-21. For graduate students, interest rates jumped to 6.54% from 5.28% last year, and loans paid out after July 1 could be even higher.
At the same time, inflation has skyrocketed the cost of living, making rent and daily expenses even more out of reach for student budgets.
As a result, some master’s programs also have particularly high debt-to-income ratios, such as social work, counseling, music, and fine arts, according to Urban Institute’s research.
Increased availability of tuition benefits
A growing number of companies may be willing to take part of the tab to ease the burden of providing education.
According to the Society for Human Resource Management’s recent employee benefits survey, education benefits have played a big role in workers’ competition as we emerge from the pandemic. As a result, more companies are offering opportunities to develop new skills.
Nearly half of employers, or 48%, said they offer undergraduate or graduate tuition assistance as a benefit, according to the survey.
Of course, employers paying for an employee’s degree is nothing new. For decades, companies have emphasized graduate studies and MBAs for white-collar workers.
However, many companies now extend this benefit to hourly and part-time employees and promote it more aggressively than before.
A Bright Horizons survey found that less than half of employees said they had achieved their educational goals in the past few years, even with a strong desire to return to school.
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