5 reasons a master’s degree isn’t worth the trouble in 2025

At first glance, it appears demand for a master’s degree among U.S. college students is moderately stable, with 860,000 degree recipients in 2023-2024 and 864,000 recipients in the 2024-2025 academic year, according to Statista. Even the 2025-2026 period looks robust, with an estimated 886,000 master’s degrees expected to be handed out.

But the first half of 2025 has delivered a harsh vibe to the master’s degree market.

Take the jobless rate for newly minted Gen Z master’s degree holders right now. It’s up to 5.8%, significantly higher than the 3% level in the first half of 2024, according to the St. Louis Federal Reserve Bank.

Career experts say that while a master’s degree is certainly not without value, it’s no longer the draw it once was.

‘I’m not saying a master’s is worthless, I’m saying it’s no longer a default,’ said Grace Lee, managing director at Command Education, a college admissions advisory firm in Vancouver, British Columbia. “The old model of 'go to school, get a degree, move up in the world' is breaking down fast.”

At the very least, an advanced degree should be carefully considered and discussed with family, peers, mentors, and professors.

“Given the cost of higher education, getting a master's degree just to add to your LinkedIn profile and resume seems frivolous,” said Kevin Ladd, chief operating officer at Scholarships.com in Chicago, Illinois.

Ladd says that if you have a goal that requires a master's degree, figure out the best path and determine how to accomplish it. “However, the days of getting such a degree just for bragging rights are, or should be, over,” he noted. “Unless, that is, you just have a ton of money burning a hole in your pocket, or your employer or a wealthy relative is paying.”

There are myriad reasons why a master’s degree could be a deal-breaker these days, and when they’re combined, the negatives really add up. These five factors need to be evaluated before going forward with graduate school plans.

The soaring cost of a master’s degree

An MBA from a high-profile institution like Harvard Business School can cost $231,276 for a two-year program. Even a mid-level state college advanced degree can cost up to $75,000.

“The cost-to-outcome ratio with a master’s degree is often poor,” said Jenna Fernandes, head of admissions at Venture University, a venture capital investor accelerator launched in 2018. “Students can easily graduate with six-figure debt and minimal return on investment.

New caps on federal student loans

Even if you wanted to finance a master’s degree, Uncle Sam is making it more challenging to get the job done, at least at the publicly funded level.

Included in the recently enacted Big, Beautiful Bill budget legislation are strict caps on federal student loans starting on July, 2026. In total, federal graduate student loans will be limited to $100,000, while professional collegiate borrowers will see loans capped at $200,000. Meanwhile, the BBB calls for a hard cap of $257,000 on all federal student loans.

Additionally, the Graduate PLUS loan program is being significantly reduced.

The current PLUS program enables student loan borrowers to leverage publicly funded student loans up to the total cost of their graduate school program. Starting next year, loans will be capped at $20,500 annually, with a lifetime cap of $100,000.  That figure is down from $138,500 in 2025.

Master’s recipients may no longer be the apple of a CEO’s eye

With AI opening eyes in the C-suite and corporate boardrooms, companies are devaluing the need for at least entry-level positions in once-graduate-friendly sectors like law, investment banking, and corporate finance.

Dario Amodei, CEO of the AI safety and research company Anthropic, recently predicted that AI would curb 50% of all entry-level white-collar positions by 2030, which would likely increase the US unemployment rate by up to 20%. He also said the shift would lead to a “white-collar bloodbath.”

The AI factor, alone, could deliver a massive blow to that entry-level experience so many previous master’s graduates leveraged to get on a “green light” career path.

“AI and automation are eliminating or transforming the very roles these degrees were designed to feed,” Fernandes said. “Even more telling, the power of alumni networks and brand prestige, which was once a key advantage of grad school, is being replaced by access to industry-specific ecosystems and direct mentorship opportunities.”

There's a decline in using a master’s degree as a ‘fallback’ plan

While tempting, given the realities of advanced AI and fewer job opportunities, the sun may be setting on undergraduate students using graduate school as a socially acceptable way to stall.

“Too many college graduates don’t know what comes next, so they throw $80,000 at the problem and hope clarity magically appears in year two,” Lee said. “That’s not a strategy anymore. It’s fear disguised as ambition.”

Other career specialists agree, adding that a conversation between a young Gen-X $TWTR college graduate and an older peer who’s already learned from the “bide your time” Master’s experience.

“I’d advise against going to grad school to avoid a tough job market,” said Caitlin Luetger-Schlewitt, lecturer in leadership and career readiness at North Central College in Naperville, Illinois. “Millennials learned the hard way that having a master’s degree but little professional experience is not likely to increase your early career job prospects or starting salary.”

Colleges are slow to adapt to changing corporate times

Flush with government-backed federal loans and high tuition rates that far outpace the rate of inflation, employment experts say colleges and universities have grown too complacent in the last decade, and that companies and students have started moving on without them.

“Many master’s program curricula are outdated and not reflective of the rapidly evolving needs of today’s industries, especially in innovation, venture, and entrepreneurship,” Fernandes said.

Plus, hiring managers aren’t waiting around for degrees, either. “Employers care about what you can do and not what’s printed on your transcript,” Lee said. “With the rise of bootcamps, micro credentials, and self-directed learning, you can build real-world skills and credibility without ever stepping back into a classroom.”

There's a path forward to a master's degree experience — but it's not easy

There’s one generational misconception that a master’s degree is equivalent to work experience, when it’s not. Now, in 2025, as other negatives rise to the surface, that equivalency issue adds another major brick in the wall between students and master’s programs.

“The theoretical work you do in a classroom is not the same as developing skills on the job,”  Luetger-Schlewitt said. “An MBA and other master’s degrees may not automatically qualify you to leap over entry-level roles, and there are some skills or experiences you might only develop on the job.”

Luetger-Schlewitt said she recently spoke to a business student interning at a large corporation who was surprised to learn about Request for Proposals (RFP) on the job, while having never heard of them throughout their business degree. “It’s beneficial for a graduate student, especially an MBA student, to have a few years of industry experience before pursuing grad school,” she noted. “This helps bring a deeper level of understanding.”

Ideally, any decision to attend grad school should be based on need, cost, and lifestyle considerations. “It also should account for potential ROI on a short and long-term scale,”  Luetger-Schlewitt noted.

Her best advice to an undergrad considering grad school is to think about the following decision makers:

• Is a master’s degree necessary to gain entry into your field? If the answer is yes, then consider attending graduate school. If the answer is no, then continue reflecting.
• What is your purpose for pursuing a master’s degree? Is it passion for the subject, or are you afraid of entering adulthood after college?
• How will you pay for it? Will you incur debt? Can you afford to take out private loans, given the recent changes to Grad Plus loans? “Also, will you earn enough money in your post-grad school career to pay back your loans and live comfortably?” Luetger-Schlewitt said.
• Are you going to hard school full-time? If so, does your program offer full funding to master’s level students?
• Can you afford not to work for a few years while you pursue grad school? Alternatively, can you manage the demands of working full-time and attending grad school part-time?
• Do you have the grades to get into the program you desire? What if you don’t? How likely are you to get into a useful or “good” program?
• Name the endgame. What is the best outcome, the worst outcome, and the most likely outcome from earning a master’s degree?

Above all, don’t treat a Master’s as a parachute or a plan B. “Treat it as a multiplier; something that adds momentum to a direction you’ve already begun to own,” Lee said. “That’s when it’s worth it.”