The Degree Can Pay More and Still Leave You Behind

Money, Time &
Choice

                  DECISION BRIEF 01

                    AUGUST 18, 2026

              EDUCATION / CAREER / OPPORTUNITY COST
            

A higher salary does not automatically make graduate school a good investment, because tuition is only part of what you give up.

Graduate school has an unusual advantage in financial decision-making: it arrives pre-labeled as an investment.

Because education creates opportunity, a six-figure program often gets asked “How will I pay for it?” before “Will it pay me back?”

Graduate school was one of my biggest goals. I wanted the degree, the experience, and, if I am being fair, some of the prestige too. But I cared more about leaving traditional full-time work early. Taking on debt and giving up earnings would have made me better positioned for a career I was trying to make optional. I was considering spending a lot of money to move my own finish line farther away.

Now consider someone earning $100,000 in Tampa who leaves for NYU Stern. Stern’s Class of 2025 reported an average base salary of $168,970 — nearly a $69,000 raise. Even then, the MBA path takes roughly 12 years from enrollment to catch the stay-employed path.

+$69K

approximate increase in starting base salary in the Stern example.

12 YEARS

approximate time from enrollment before the MBA path catches the stay-employed path.

The MBA graduate is running faster. They just started the race several hundred thousand dollars behind.

                  WHAT HAPPENS BEFORE THE RAISE ARRIVES
                

$280K

net cash required for the MBA path

$375K

gap when the post-MBA job begins

The worker who stays employed keeps earning, gets the same 3% annual raises, and invests the surplus at an assumed 7%. The $69K raise is gross, so only part of it closes the gap each year.

Before enrolling, ask three questions.

01

Does the full financial case work?

Count tuition and living costs, but also the salary, benefits, raises, work experience, and investment growth you give up while you are gone. The paycheck you give up never sends an invoice. It should.

02

What exact career change are you buying?

Economists Joseph Altonji and Zhengren Zhu studied 121 graduate degrees and found returns varied widely by field, undergraduate background, and program. A required credential and an MBA meant to “open doors” are different purchases. At six figures, “more opportunities” is a brochure. Name the job, likely pay, and why the degree materially improves your odds.

03

Is prestige actually part of the product?

The same study found higher school-specific returns among higher-ranked MBA and JD programs. Sometimes the name buys recruiting access, alumni, a network, and credibility. If School B costs $80,000 more than the best credible alternative, make that extra $80,000 explain itself. If it cannot, you may be purchasing an extremely beautiful sweatshirt.

                          GO WHEN
                        

The degree is required for the career you want, creates a credible path to materially higher earnings, or buys access a cheaper alternative is unlikely to reproduce — and the full payback still works.

                          RETHINK WHEN
                        

The benefit is mostly vague optionality, the same destination is realistically available for less, or the financial case only works if your career proceeds with the precision of a LinkedIn success story.

Price can change the answer dramatically. In the same Stern example, cutting tuition roughly in half moves break-even forward by more than three years.

If nobody could see the school name on your résumé, what would the degree itself still be worth to you?

Johnston Osagie Jr.

Money, Time & Choice

Sources: NYU Stern, 2026–27 MBA Cost of Attendance and Class of 2025 Employment Report; Clear Admit, Dec. 8, 2025; MIT Living Wage Calculator (Tampa); Joseph Altonji & Zhengren Zhu, NBER Working Paper 33530 (2025). Assumptions: $100K starting salary, 3% annual raises, 7% investment return, and a three-month post-MBA job search.

                  JOHNSTON OSAGIE JR.
                

                  MONEYTIMEANDCHOICE.COM
                

Money, Time & Choice

The Degree Can Pay More and Still Leave You Behind

You Keep Getting Great Reviews. Someone Else Keeps Getting Promoted.

You Make a Lot More Money Than You Think

You Can Retire on $250,000. Here’s the Math.