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Have you ever gotten rejected for a job due to being too costly?

I interviewed for a job that I am definitely qualified for. It was between me and another candidate. The guy they hired is ten years younger, without a graduate degree (I have one). A friend who works at the company said they likely did this to save money -- I'd command more due to my degree. Ugh. Should I lie about my education on my resume, at this point?

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