Racheeta, You will have to apply for the schools starting in the fall of 08 if you intend to go to graduate school. This means you will start your application in the fall of 07. There are costs and benefits of both the degrees. Here is my take on this... PHD is more research oriented and if that interests you, its better to go for it. At the end, you will have to do what you like. A boring job is not what you want even though you get decent amount in earnings. I do not think you will have to worry about jobs if you do your PHD from a decent school. Masters is more industry-oriented and they focus on what you need to know rather than the ins and outs of any stuff you do in a class. So, definitely most businesses want you to have masters. You can also get masters on your way to PHD but then its not as effective as you could be as a separate degree. Another important consideration is the finances. Few schools offer aid for masters while most have decent investment in PHD. So, if you are confused about whether you want to do PHD or not, just go for work for one year after your undergraduate degree. Then apply for masters...you have a chance that your industry will sponsor for your education. Masters is mostly for people who want to work outside research area.