The Average Net Worths of People With and Without a Master’s Degree
Written by
John Csiszar
Edited by
Levi Leidy
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
A master’s degree is a sign that you possess specialized, expert knowledge in a particular field. It signifies to employers that you’ve worked hard to become an authority in your field. This, in turn, typically translates to a higher salary. But is the one or two years (and boatload of tuition) that it takes to earn a master’s degree worth it, in strictly financial terms?
Read on to learn just how much an expert with a master’s degree typically earns in comparison to those without as much education.
Net Worth Comparison
Your net worth is the amount of money you’d have left if you liquidated everything you own and paid off all your debts. In accounting-speak, it’s your total assets minus your total liabilities. A higher net worth brings all sorts of benefits, from being able to weather financial emergencies better to getting lower interest rates on loans. It can also reduce your stress and offer greater financial opportunities for the future.
For these reasons alone, pursuing a master’s degree might be worth it. On average, those with a master’s degree have a much higher net worth than those with a bachelor’s degree or high school diploma only.
When analyzing the net worths of Americans by educational level, many studies lump those with master’s degrees into the category of “graduate degrees” or “more than college.” Some studies don’t separate out levels of college education at all. This can make it hard to sort accurately for the net worths of those with and without master’s degrees.
For example, one study by OfDollarsAndData.com uses 2019 data to show median net worths for the categories: no high school, high school, some college and college degree. Obviously, those with a college degree could have an associate, bachelor’s, master’s or even doctorate degree. For reference, those with a college degree had a median net worth of $309,000 while those with only some college had a median net worth of $89,000.
It’s a bit easier to look at data for those with and without master’s degrees by examining annual income.
Annual Income Comparison
On an annual basis, most master’s degree holders earn more than their bachelor’s degree counterparts, and considerably more than those with lower levels of education. The latest data from the U.S. Census Bureau shows the average annual earnings for Americans based on level of education:
- Master’s degree: $136,500
- Bachelor’s degree: $117,600
- High school diploma: $55,810
- Less than high school diploma: $37,330
These averages have likely increased since the latest Census Bureau report, as that data is from 2023. However, the ratios are probably the same. These figures show that those with a master’s degree earn roughly 2.5x the income of those with only a high school diploma.
Lifetime Earnings Comparison
According to a study by the Georgetown University Center on Education and the Workforce (CEW), the average holder of a master’s degree will earn $3.2 million over the course of their lifetime, versus $2.8 million for those with a bachelor’s degree and just $1.3 million for those with only a high school education.
Of course, this amount can vary considerably based on a number of factors, from the type of degree obtained to the selected profession. As a report by the Foundation for Research on Equal Opportunity (FREOPP) points out, a master’s degree in computer software and media applications could be worth hundreds of thousands of dollars more over a lifetime — perhaps even more than $1 million — than a master’s in humanities, for example.
How You Can Leverage the Higher Earnings of a Master’s Degree
The best way to leverage a master’s degree financially is to choose a career that pays a high level of lifetime earnings. According to the FREOPP report, some graduate degrees actually generate a negative return on investment (ROI), including the popular Master of Business Administration (MBA). Overall, the report states that an incredible 40% of master’s degrees fail to produce a positive return in terms of the increase in lifetime earnings after subtracting the cost of graduate school.
FREOPP recommends students to be very choosy about the fields they enter if they’re intending for their master’s degrees to pay off financially. The group finds that the most lucrative advanced degrees are in fields like law, medicine and computer science, while those in the arts and humanities don’t generally pay off financially.
More From GOBankingRates
