My anecdotal experience is that CS grad school is probably worth it. I have a MS myself and when I wrapped it (at the end of the Internet bubble in 2001), it w

My anecdotal experience is that CS grad school is probably worth it. I have a MS myself and when I wrapped it (at the end of the Internet bubble in 2001), it was still worth 15-20% in starting salary at big corps. Some of my cohort continued onto the PhD - they <mostly> found employment in universities and research institutions over the last three or four years. However, the Taulbee survey (http://www.cra.org/statistics/ http://www.cra.org/statistics/) seems to indicate that we are seeing a large increase in the number of PhDs over the last decade (1800 a year? thats a bunch to get sucked into Microsoft and Google on a yearly basis). Several of my cohort had to take postdocs or lectureship jobs (at $3K per class or something else ridiculous) to stay in academia, so it might be a bit of a CS PhD bubble as well. Falling undergrad enrollments over the last few years might have bottomed out as last year there was an uptick in BS enrollments. The Taulbee data indicates that a large portion of CS PhD types (~60%) wind up in industry positions of one type of another. I would probably encourage talented hackers with the interest to try grad school, but to not feel compelled to go at all if they can pick up challenging work at a startup or even bigger company. Be damn careful about winding up an "IT professional" though. If you don't control that process, you'll wind up a jack of all trades in a job market that tends to reward specialization and scarcity of knowledge rather than general "get it done" skills. Of course, if you start your own company, you can ignore all the above advice.