Do You Really Need That Extra Degree?

When Dana graduated college, she had a business marketing degree in her back pocket, but was unsure of the career she actually wanted. Three years into the workforce, her intuition proved correct. After volunteering with a nonprofit's public relations department, she realized communications was her calling.

To make the career jump, she thought her biggest hurdle would be the lack of a communications degree. But as she applied to a number of master's programs in PR and interviewed with schools, she discovered she really didn't need that extra degree-unless she was planning on becoming a professor of communications.

As the typical back-to-school march in September ensues, when approximately 800,000 students take steps towards a master's degree, higher-education programs are facing a new challenge due to a shift in the power dynamic between employers and prospects. During the recession, and even before, professional programs lauded their degrees as one of the only ways for people to stand out and get ahead of other job candidates. After all, anyone with an aspiration to become a CEO couldn't do it without a Wharton MBA, right?

But today's labor market shows a completely different picture. Due to a talent crunch that hasn't been seen in more than a decade, employers are desperate to lure good talent, going so far as to consider candidates who don't have the ideal educational background-a notion that was simply unthinkable before. Now, employers are willing to pay from their own pockets to train employees for roles they need. Indeed, the amount of expenditures businesses put toward training employees grew 33% in 2017, reaching nearly $91 billion.

"Employers want you to show commitment to the field you're in," says New York City based career coach Lynn Berger. But now that doesn't always require you to "get the full degree," she adds.

Recently, for example, toy maker Hasbro Inc. and pest control company Terminix lowered the bar for some of their open positions, dropping some education requirements or changing requirements to say degrees were preferred but not mandatory.

To be sure, the age-old question of earning an extra degree has always been a factor for professionals. But the change in the labor market had shifted a harsh spotlight on the cost of higher-education programs, and if plum opportunities are really going to follow before (or even after) the loan payments for the Harvard master's kick in. Indeed, MBA programs have seen the number of applications they receive fall for three straight years, and the number of new law school graduates has dropped for four consecutive years.

Amanda Oliver knows the pain of getting a degree she didn't need. In 2009, at the height of the recession, she graduated with a law degree only to see the job she lined up vanish because of budget cuts. That left her with hundreds of thousands of dollars in loans to pay back and no legal career path.

"Unless your dream is to work in the legal field and you can't imagine doing any other career, I don't know if it's worth the stress or amount of money," she says.

While she doesn't regret the law degree-it gave her plenty of workplace skills, such as mastering public speaking-she would've preferred to spend her money elsewhere. Oliver eventually joined a nonprofit and worked her way up to executive director, and now has taken online courses and certification programs to transition into becoming a career coach and resume writer.

"I definitely feel like people are overeducated," she says. Now, having edited thousands of resumes, she says she feels many people are overeducated. "Experience is more valuable," she adds.

For Dana, her decision came down to a simple need. She didn't want to become a professor, so she decided to forgo the master's. How did that work out? Today, she's a vice president of communications at a large bank-and is taking free courses offered by her company to boost her skill set.