"I would like us to look with our teachers and see whether or not those dollars could be spent in a more productive way," HISD Superintendent Terry Grier said.
The district estimates that the extra payout for teachers with a master's or a doctorate is costing taxpayers about $7.8 million this school year.
The money might be better spent to pay teachers more for taking on leadership roles or to bolster the district's bonus plan tied to student test scores, Grier said.
Texas lawmakers in the 1980s stopped mandating higher salaries for teachers with advanced degrees. Many districts continue the practice.
The number of teachers with master's degrees statewide has grown over the last four years, though the percentage has dropped slightly to just under 21 percent, the Houston Chronicle reported Wednesday.
Aldine ISD Superintendent Wanda Bamberg says paying more for a master's degree is worth it.
"The real reason for doing it is the benefit in the classroom, and I'm going to stand by that," said Bamberg, who earned a master's in secondary education from the University of Alabama and a doctorate in educational leadership from Sam Houston State University.