Today, surveys find about half of college grads work in jobs not requiring a college degree, and almost half of Masters degrees have a negative Return on Investment.
Is College Worth It? The ROI of Higher Education in Today’s Economy (msn.com)
- The median ROI on a bachelor’s degree for candidates graduating in time is $306,000. However, some degrees generate greater ROI by millions of dollars, while others don’t deliver much value.
- Considering the probability of dropping out of college, the ROI for a bachelor’s degree dips to $129,000. Besides, more than 25% of graduate programs deliver negative ROI.
- Among engineering programs, about 80% deliver an ROI of more than $500,000. However, for psychology programs, this share is just 1%.
- Elite institutions such as Penn and Caltech deliver the highest ROI throughout their lifetime. However, some Ivy League degrees have delivered negative ROI. This implies that attending an esteemed college doesn’t define success.
However, tuition and costs have risen faster than inflation, at most universities.
Students have had to take on debts to attend elite programs – especially at private colleges which enroll about 1/3d of students. Although most students do not take on the excessive debts that the media focuses on – and misrepresents as typical:
1% of college students in the US graduate with more than $100,000 in debt, while 10% graduate with a debt burden of over $40,000.
Many degrees have poor salary compensation due to limited market demand.
Many students start college but never finish – and their costs – and lack of earnings while going to school – are not reflected in most of these surveys.
College makes sense – for earning degrees with a good ROI – and for fields where specific training is essential.
First year salaries in 2022, by some degrees:
- Engineering: $73.922
- Computer Science: $75,900
- Social Sciences: $61,173
- Math & Natural Sciences: $66,760
- Agriculture & Natural Resources: $57,807
- Business: $60,695
- Humanities: $50,681
- Communications: $55,455
Those are typical first year starting salaries – many of these fields have far higher potential salaries, with experience, but that was not captured in that survey.
Separately, there is a push for taxpayers to pay off the education loans that a minority of students took on, often for high paid graduate degrees.
This is unfair to students who worked hard to pay their own way and made decisions to work and save and attend less well-known public schools, while others chose to borrow and spend to attend elite schools and do study abroad programs – and then reap the financial rewards of that path.
Basically, they want blue collar workers to pay off the college debts of the elite – the majority of the $ value of debts is for graduate degrees in high paid occupations like law, medicine and business.
Additionally, some go further and advocate that all college education should be “free” (paid for by taxpayers). That opens up a bit of complexity – does this mean some students could attend their local public college for free, while others could attend elite public universities for free? Or even attend elite private universities? How would this allocation be made – and why would some students get the benefit of attending Stanford ($91k/year in 2024) while others would have to settle for a state college ($15/year).
Or would the government set price controls on universities (sort of like what Medicare does for health costs) and pay everyone mostly the same amount? That would turn many university budgets into chaos due to the enormous difference in salaries between public college pay and elite university pay, and their cost structures.
How would this work? When you look into the details, it becomes a mess.
