The US government’s recent tariff policies have created considerable global economic unpredictability. Understandably, facing a turbulent economic outlook, many potential applicants feel overwhelmed by doubt and fear, questioning whether it is the right moment to pursue graduate education. In uncertain tariff environments, many businesses take a “wait-and-see” approach, or in other words, delay major investments and capital expenditures to reduce short-term risk. At the same time, an uncertain economy can create opportunities for those in a position to choose between holding steady in their current positions or furthering their career through graduate study. Here are a few risks and opportunities that potential applicants may wish to consider given the current economic climate.
Risks
1. Accumulating Significant Debt
Applicants planning to self-finance their education through loans should carefully evaluate their ability to repay debt and handle expenses upon graduation. Consider what it would look like if you landed your ideal job versus your plan-B versus your worst-case scenario. A worst-case scenario may be a job that pays less than expected or you encounter a significant delay in getting hired. Such a scenario might result in economic hardship and may warrant a delay in your plan until you can accumulate more savings or funding sources that will not require you to assume large amounts of debt.
2. Failure to Evaluate Opportunity Costs
People begin their graduate education journeys from different starting points. For example, Mike applied to graduate programs while working as an assistant manager at a prominent bank, while Eric was unemployed, without foreseeable job prospects. Mike clearly has the bigger opportunity cost, because he will not only shoulder the tuition and expenses, but also forgo lost salary and potential promotion or lateral transfer opportunities that his current job might lead to. Mike should carefully consider whether the graduate degree will put him in a better position, in terms of financial growth or career advancement opportunities. Moreover, he should examine whether his target job function/industry could be impacted by the current economic situation. Applicants should strongly weigh the opportunity costs of graduate school in all situations, but it is especially critical to thoroughly examine one’s current position and potential opportunities in today’s environment.
Opportunities
1. Adding Credentials
There is a strong case to be made that amid economic uncertainty, additional qualifications can distinguish you in a crowded job market where employers can afford to be more selective. For instance, perhaps your goal is to work as a data scientist in the United States.
You were a business major at university and took relevant electives, including Programming (Python), Machine Learning, Big Data Marketing, Statistical Learning, and Deep Learning. However, after browsing data scientist job postings, you realized that while you have solid experience in statistical modeling, developing and deploying neural network models, and working on complex group data projects, you lack required experience in taking ownership of complex data projects, hands-on cloud development, and the ability to work with pre-trained generative AI models. Without these skills, it will be hard to land your ideal job in data science. This is where a solid MS in Data Science or Information Systems Management program may provide the credentials that set you apart, by acquiring tools to analyze unstructured data, deep-dive into algorithms for supervised and unsupervised learning from data, explore statistical techniques for the automatic analysis of natural language data, and gain experience taking ownership of a data problem in a capstone project with a real client.
2. Counter-Cyclical Strategy and Timing Advantage
We must remember that economies experience ups and downs, and that the beginning and end of a trend are almost impossible to predict. Today’s difficult market isn’t a permanent state but part of a larger pattern that will eventually shift. It may seem counter-intuitive, but applying to graduate programs during economic fluctuations often makes more sense than during thriving job markets.
Since many graduate programs take 1-3 years to complete, by the time you graduate, the economy might be recovering, positioning you well for the upswing. For instance, during the turbulent Covid-19 period, many applicants deferred admissions, assuming their job prospects would be bleak upon graduation. However, graduate students who enrolled in that period were greeted with a post-Covid hiring boom in 2022.
3. Lower Opportunity Costs
Returning to the opportunity cost discussion, in an economic downturn, a person may access fewer attractive job openings or opportunities for advancement/lateral transfers in their current company. Investing in one’s education during such a period may offer lower opportunity costs compared to applying to graduate programs in prosperous economic times.
Conclusion
Graduate education is a major life decision that requires careful planning and consideration. However, like any major investment, it is best to look at it from a long-term perspective and not be overly influenced by short-term thinking sparked by fear and the 24-hour news cycle. When others are pulling back, investing in yourself can give you a competitive edge when the market improves. The key is ensuring your specific educational investment aligns with your long-term goals and offers genuine value in your field.