Advanced Degrees: A Risky Investment?

The Postsecondary Education and Economic Research Center said in a report released on April 4, 2026 that several advanced degrees—especially in fields often described as “AI-proof,” including psychology and education—can deliver negative cost-adjusted returns once tuition and fees are included. The report’s central finding is that some graduates may end up financially worse off over their lifetimes after pursuing certain graduate credentials.

 

The analysis estimates the change in lifetime income after accounting for educational expenses. Psychology graduate degrees were reported to have a -8% cost-adjusted return, while clinical psychology degrees showed a -5% cost-adjusted return. The report also found negative returns for social work and for curriculum and instruction degrees. By contrast, computer science graduate degrees were estimated to produce a 6% cost-adjusted return.

 

Researchers Joseph G. Altonji and Zhengren Zhu produced the estimates using administrative data from the Texas Education Research Center. The repoSources said this dataset enabled causal estimates for 121 specific advanced degrees by comparing outcomes to alternative earnings paths, including what individuals might have earned had they not entered graduate study. The approach is intended to separate the effect of the degree itself from other factors that can influence earnings.

 

The findings arrive as graduate education has become more common in the United States. Data from the U.S. Census Bureau shows the share of Americans with a graduate degree rose from 31% in 1993 to 42% in 2022. The report’s results add detail to that broader trend by suggesting that the financial value of graduate study can vary sharply by field, even among programs that are sometimes viewed as resilient to technological change.

 

At the same time, the labor market is being reshaped by demand for AI-related capabilities. The World Economic Forum has reported that AI skills carry a 23% wage premium, compared with an 8% premium for holding a bachelor’s degree alone. Separately, research from Anthropic in March 2026 said AI can perform the majority of tasks in many white-collar fields, a claim that has contributed to renewed scrutiny of how education translates into earnings.

 

Even with detailed administrative records, the report’s estimates are presented as cost-adjusted returns rather than guarantees for any individual graduate. Outcomes can differ across institutions, career paths, and personal circumstances, and the report’s comparisons rely on modeled alternatives for what earnings would have been without graduate enrollment.

 

Still, the results provide a data-driven benchmark for policymakers, universities, and prospective students weighing the costs of advanced study against expected lifetime income.