Most students never consider a financial return on investment calculation when considering their selected field of study or the college they will attend.
43% of Masters programs leave students financially worse off – and 1/3d of federal education grant and loan programs lead to degrees with a negative return on investment.
Key Points
- This report estimates return on investment (ROI) — how much college increases lifetime earnings, minus the costs of college — for 53,000 different degree and certificate programs.
- Bachelor’s degree programs have a median ROI of $160,000, but the payoff varies by field of study. Engineering, computer science, nursing, and economics degrees have the highest ROI.
- Associate degree and certificate programs have variable ROI, depending on the field of study. Two-year degrees in liberal arts have no ROI, while certificates in the technical trades have a higher payoff than the typical bachelor’s degree.
- Nearly half of master’s degree programs leave students financially worse off. However, professional degrees in law, medicine, and dentistry are extremely lucrative.
- Around a third of federal Pell Grant and student loan funding pays for programs that do not provide students with a return on investment.
Lifetime ROI is determined by field of study, costs of the program, which is related to where the degree is returned, and program reputation (which affects the salaries of graduates).
Most Bachelor degree programs have a positive ROI, but some like English, Arts, and Education break even or may be negative.
Many Masters degrees also have zero to negative ROI. This could be because many are earned later in life. If you study for an MBA at age 30 or 35 you have fewer earning years remaining to recoup the investment (which includes tuition, fee, etc, but in many cases can incur lost wages if studying full time).
The most critical factors in ROI are the field of study and the college attended.
Related: More than half of college graduates are working in jobs that don’t require degrees – CBS News
The nation now has $1.5 trillion in college debt and a significant portion of that is for degrees having a negative return on investment – in other words, pushing everyone to college may be making our economy worse, not better.
I have not, in the past, been anti-college but I now question our mindless devotion to everyone should get a 4-year degree. My late Dad was a full professor, my Mom had been both a high school teacher and a college instructor, my oldest brother, now retired, was a college instructor. My next brother has a PhD in microbiology and worked, mostly, in industry.
Advanced education was important as a filter during the explosive population boom of the brief baby boom era when there were numerous applicants for every job and unemployment ran 7+% for almost 25 years. Today, unemployment is low and the incoming cohort is smaller, with fewer numbers of new workers competing for the same jobs.
