 What's happening guys? So this is a comment that I get all the time on my videos. I'll say something along the lines of getting an undergraduate degree in psychology generally is not going to be a good idea because you're gonna have a hard time finding a job and the few jobs that are out there are not going to pay very well. And I've gotten hundreds of comments saying something along the lines of okay so a psychology degree in undergrad probably isn't gonna be a very good investment but once you get a master's level degree or a doctoral level degree you'll be good to go. And so it doesn't really matter what degree you get an undergrad, just go for whatever you're passionate about because if you can't find a job with a bachelor's level degree then you can just get a master's or a doctorate. Some people even say something along the lines of well I'm planning on going to medical school or law school, so it doesn't matter what degree I get an undergrad. And this might seem pretty reasonable when you first hear it. I mean psychology for instance is more important than ever with all the stuff going on in the world right now. And in the case of medical school you're actually slightly more likely to get in with a liberal arts degree or an art degree than something like math or science because of quotas. However, I completely disagree with this line of thinking and I'm gonna get into that in a moment, let me explain. And I can almost guarantee you that by the end of this video you're probably going to agree with me with a few very specific exceptions which I will go over. So make sure to stick around, sit back, relax, smash the like button and let's jump right into it. So the first thing I wanna talk about is something that a lot of people probably know about and that is that the student debt crisis is absolutely out of control. The total federal student debt right now is around 1.7 million dollars. No, it's 1.7 billion. Nope, not that either. It's 1.7 trillion dollars at the time that I'm recording this video. And that's increasing by the day. Now I'm not gonna go over how this absolute cluster F catastrophe happened. I've talked about that in other videos and I'll talk about it more in the future. So make sure to subscribe if you haven't already. And most people know that this is really bad but it's actually a lot worse than you think. This number is more than the total amount of credit card debt in the United States which is also another situation that's totally out of control. It's also more than the total amount of auto debt which is around 1.2 trillion. Now out of all of the student debt owed over half of that debt is owed from people who have graduate school degrees like masters and doctorates. In fact, graduate school might be the biggest offender when it comes to creating the student debt crisis. This is because a lot of people end up choosing the wrong degree in undergrad because of the false promise that they're going to be able to get a really good job as long as they get a master's or a doctorate. So it's kind of like a bait and switch. First, they get you in saying, you know, oh, get a college degree, you know, you have to have a college degree to be successful. Go with your passion, choose whatever degree you're passionate about. You like dancing for fun? Why not major in that? You like taking photos? Why not major in photography? What's next, majoring in playing video games? Then when you can't get a job with your four year degree, the school busts out the, oh yeah, we've got a better solution for you. You should go back to school and get a much more expensive degree and then you'll be able to get that job that you always wanted. Now, sometimes this makes sense and it's true, but a lot of the time getting a higher level degree actually won't help you that much at all. And the reason for this is because if you're in one of those majors where you can't get a job with a bachelor's level degree, chances are a lot of other people are thinking the exact same thing as you and they're going into these master level programs as well. Then the master's level degree gets saturated and then the same thing happens with the doctorate. This is a system that basically funnels undergraduates into getting higher level degrees that cost a lot more. Those familiar with business might call this a sales funnel or they might refer to it as an upsell and it's an extremely effective tactic. They tell them to go to school, get your art history degree, get your gender studies degree and then when they can't find a job with a four year degree, they tell them to go back to school and get your masters and then when they can't find a job with a master's, they tell them to go back to school and get their doctorate. The problem is a lot of the time they still can't get a job or if they do get a job, it still doesn't pay all that well because the truth is it's all about supply and demand and there simply isn't that much demand for those types of degrees. And the types of loans that they force you to take out for graduate school are downright predatory and that brings me to point number two, which is the type of debt that you take out is much, much worse than the undergraduate variety. Now in undergraduate, the loans that you take out depending on where you went to school and what types of loans you got are gonna be somewhere around 5% interest, sometimes lower than that. And on top of that, the student loans that you take out don't start accruing interest until after you've graduated and that's not too bad considering the stock market raises at about 7% every single year adjusted for inflation and these honestly aren't very bad interest rates. To put these rates into perspective, if you invested your money into the total stock market, the average return that you would get is about 7% adjusted for inflation over the last 100 years. However, when you go to graduate school and you take out what are known as grad plus loans or parent plus loans, the interest rate last year on these loans was 7.6%. And on top of that, there is a 4.2% servicing fee that they take out as soon as the loans are dispersed. And if that wasn't enough, the money that you take out starts gaining interest right away while you're still in school. This is why let's say you're becoming a doctor, for instance, you take out money in your first year of medical school, you're gonna have four years of medical school and then another three to seven years of residency. And so by the time you start making really good doctor money, it's very possible that the money you took out will actually end up doubling over the course of you paying off the loan. And then you're gonna end up as a clickbait title for a Dave Ramsey video. Now, we've talked a lot about how the average student takes out nearly $40,000 in student loan debt in order to get their bachelor degree. The average amount taken out for a master's level degree is around $66,000. The average for a PhD was 108,000 and the average for a professional doctoral level degree like medical doctor, for instance, is gonna be around 186,000. And honestly, I'm only scratching the surface here on how bad grad plus loans are. In order to explain it all, I'd have to make it into an entire video just on its own. But basically there are a lot of protections that you get with undergraduate degrees that you don't get with grad plus loans. And of course, this isn't to mention the fact that because of the fact that this whole loan thing has been privatized, you see schools commonly charging over $50,000 a year because it's basically like a blank check. The government will pay for whatever these schools write for. Number three on the list is that it takes a very long time. Now, most people say that bachelor degrees take around four years and that's approximately correct. And then master's degrees are gonna take around two years. And again, that's about right. And then they think that a doctoral level degree is only gonna take another two years or so and that's actually way, way off. The average time that it takes to complete a PhD, for instance, is 8.2 years. And that's on top of the time that it takes to do your bachelor's degree. So really it's over 12 years overall. This is why the average person who graduates with their PhD is going to be 33 years old. And like I said before, they're gonna be $108,000 in debt. And on top of that, many professional level degrees like medical doctor, for instance, require residencies and fellowships if you wanna get into those high paying jobs. Medical school, for instance, the average age of a medical school graduate is around 30 years old. And then they're gonna do a residency that takes anywhere from three to seven years. And they might even do an additional fellowship on top of that that can take a few more. So you finally start making the big bucks in your late 30s and you might be like a half a million or even more in debt by then. And by the time you've paid it all down, you're probably in your early to mid 40s. So this means that if you're really aggressive about paying off your loans and you pay them off as fast as you possibly can, you'll probably get to a net worth of zero in your early 40s. Now, don't get me wrong, it's gonna be smooth sailing from there on because of the fact that you're making such good money. But to me, it's just not worth it to go that deep in debt and spend the best years of my life working crazy hours, working 80 hours a week, studying for super hard tests. And I went over this in a video that I made about getting a medical degree, how I think it's a little bit overrated for the average person. I want to have the freedom and the flexibility to enjoy the best years of my life. If I wanna travel the world, I wanna be able to do that. If I wanna start a business, I wanna be able to do that while I'm still young and healthy enough to enjoy it. And I know a lot of my viewers feel the same way. Number four reason on this list is because many people actually don't end up finishing graduate school. Only 57% of PhD students, for instance, end up graduating within 10 years. And this gets even worse when you get really down into the details and you look into the different fields of study. The completion percentage is going to be even worse for the types of fields that you'd likely have to get a master's or a doctoral level degree in order to get a job in. So for instance, in humanities, the completion percentage is less than 50%. So the ones that need to get a graduate degree the most are the ones that are least likely to be able to get one. Now this is for a number of different factors and I can probably make an entire video just on this subject alone. But basically you have to write what's known as a dissertation and then you have to defend that dissertation which is original work in front of a panel of experts. These people are going to grill you hard and if you pass that grilling, then they'll allow you to have a doctorate. Now one of the people that's going to grill you is going to be your advisor. And if you get a good advisor, this is gonna be great, they'll help you out a lot. But if you don't get a good advisor, they can actually hurt you. I have a friend who graduated with a PhD in computer science, for instance, and she had a awful advisor who actually stole some of her original work, posted it on his website and pretended like it was his own. She was in a situation where if she didn't say anything about it, she might be the one who gets accused of plagiarism when she actually presents it. And if she did say something about it, she'd be going against her advisor who's trying to help her to get her doctorate. So it was a super sticky situation and it ended up turning out well, but it very easily could have gone the other way. So basically they have a ton of leverage over you and because of this, if you have the wrong people in positions above you, they're not going to treat you very well. A lot of professors will exploit you, make you work like 12 hours a day, seven days a week and make you do all the grunt work that they don't want to do themselves. And if you don't like that, there's a good chance that you'll either take longer to graduate or you might not get your doctorate at all. And oh, by the way, if you don't get the degree, you still have to pay back all of the student debt. The schools basically have zero accountability for making sure that their students are successful. And because of this, a lot of the time they'll encourage students to go into careers where they won't have the ability to pay back their student loan debt. And this brings up point number five, which is it's very similar to a pyramid scheme. One thing that I found out when I was doing research on different graduate level degrees, especially PhDs, is how similar it's structured to what's known as a pyramid scheme. Now a pyramid scheme is basically an unsustainable business where only those that are at the very top end up making money and everyone else basically gets screwed. And basically people start at the bottom of the pyramid scheme as bachelor degree holders who get a degree where they're not able to find a job and then they move up through the pyramid getting a master's and then maybe they're not able to find a job there or maybe they are, if they are, that's great. But if they're not, then they move up further to getting a doctorate and they might even try to go for becoming a professor. So you've basically got teachers teaching people how to teach, teachers how to teach, teachers how to teach and on and on and on. So the majority of them probably won't even make it through to getting a doctorate and those that do might find that getting a job isn't as easy as they thought it was gonna be. And out of those that get a job, very few of them are going to become professors and out of those that become professors, very few of them are going to get what's known as tenure, which is something that professors go for that makes their job a lot better. A lot of them will go back on the job market and start looking for careers and they'll find out that they're actually over qualified for a lot of the same careers they could have gotten with a master's level degree or a bachelor's. Meanwhile, those who do end up making it to the top of the pyramid and universities can, in some cases, make a ton of money. Presidents, for instance, even ones at public universities, not even private colleges, oftentimes will make over a million dollars a year. Now, if you think of some kind of crazy conspiracy theorists here, check out the subreddit r slash grad school. So I'll read a few of the comments from this subreddit. One of the funniest, most depressing parts about this sub is how many of us have independently come to the conclusion that academia is a pyramid scheme slash scam. The PhD postdoc professor system is most definitely a pyramid scheme. Be really careful with this and make sure that you don't get scammed. Number six on this list is something I wanted to point out, which is you don't actually make that much more than the same exact degree except at a bachelor level. Now, I know what you're gonna say, master's level degrees and doctoral level degrees probably make way more than their bachelor counterparts, right? No, not really. Master level degrees make about 23% more than bachelors even though they cost over 50% more and PhDs are even worse. They only make about 26% more than their bachelor counterparts even though they take an extra eight years and it costs $108,000 on average. That means PhDs only earn about 3% more than those who get a master's. So from a personal finance perspective, this is a horrible investment. So there's a lot of reasons that nobody talks about this stuff. I mean, college counselors pretty much never warn you about this stuff because it's in their best interest, the interest of the college, for you to go back to school and give them even more money because at the end of the day, it's sad to say but university just like everything else is a business. Now let's say you have your heart set on a doctoral level degree. Maybe you wanna be a researcher and that's the only way that you can get there. You're probably gonna ignore everything that I say in this video and that's awesome. Maybe being a physician has always been your dream since you were a child and you just wanna be a doctor. You can't see yourself becoming anything else and in that case, again, ignore my advice. It's totally fine for you to go that route. Thank you so much for watching this video. I made it just for you. Go ahead, smash the like button, hit the subscribe button, ring the notification bell and comment down below any thoughts, comments, criticisms, et cetera that you have on the video. ["The Star-Spangled Banner"]