[bearmf]

Opportunity cost is tricky. For a hypothetical masters graduate who is already working you have to factor increased spending (which definitely increases with income), probably much higher rent and other "advantages" of adult life. He might not even live more comfortably than a PhD student if he is in a place like NYC/SF and probably will not save much money.

[hedgie]

so the counterargument is that the opportunity cost doesn't exist because the hypothetical MS grad earning more is bad at managing money?

[bearmf]

It does exist but it is smaller than 350k in the post.

He might be not bad at managing money but almost everyone who starts earning more starts spending more. This is not bad money management, this is human nature.

Another effect is cost-of-living changes when moving from college town to real life. If a graduate earns 100k, it is probably not in a low-cost area. Taxes on this income are also higher than on a PhD income.