We've discussed the value of a college degree from various angles and perspectives over the past few years (even to the point of asking if any college degree was better than no college degree). I'm a big believer in getting a college degree (for most people and if done the right way). My MBA in particular has been a goldmine and if I had NOT gotten it, there's no way I would have earned nearly as much as I have throughout my career. So when I recently ran into several different pieces on college degrees, the value of a degree and the like, I knew I had to throw them into the discussion by giving you all the highlights.
We'll start with a CNN Money piece on what a BA degree is worth. The highlights:
The average starting salary offered to 2010 graduates with a bachelor's degree is $48,288, according to a survey conducted by the National Association of Colleges and Employers. That's down 0.7% from $48,633 last year.
A graduate with a bachelor's degree in petroleum engineering, for example, can expect to earn a starting salary of $77,278, on average. That's the highest of all majors in the survey and was followed by chemical engineering, mining and minerals engineering, computer science and computer engineering.
Meanwhile, liberal arts majors can expect to be offered a starting salary in the range of $35,508, down 3% versus last year. Psychology majors were the hardest hit, with initial salaries plunging 6.7% to an average of $32,260, while offers to English majors dropped 1.8% to $35,946.
Overall starting salaries for business majors, once among the most lucrative degrees, were essentially unchanged from last year at $46,672.
Earning $48k puts you above half the income earners in the US (if my numbers are right -- see the link to the left for details). Can that be true? I'm inclined to believe that the average earner brings home $40-$45k, but $48k as a STARTING salary seems high to me. Does it to anyone else?
The next piece is from Smart Spending and asks if law school is worth it. Their summary:
Guess what a first-year lawyer right out of law school makes at a major law firm? For major firms outside of New York City, the starting salary is $145,000, plus a bonus that can add $20,000 to the total package. For major firms in NYC, starting salary can hit $160,000 or more, with bonuses as high as $40,000. Welcome to the world of big law. But here's the kicker: The high salaries may not be worth the cost of law school.
So why is it potentially not worth it? Because the cost of law school is so high. The author argues that the graduate can leave with $150k in loans (not counting what he borrowed for an undergrad degree) and this can make the law degree not worth it.
Yes, that's true. If done the wrong way, almost any degree can be shown to be "not worth it." But there are tried and true ways that you can make the most out of a college degree that combine getting the best salary possible from a degree/school that cost you the least amount possible. IMO, this is the way to go about getting any degree, including a law degree.
In an almost separate point (not part of the law school discussion), the video in the center of the Smart Spending piece notes the following:
According to the College Board, it takes 14 years before a college grad's income minus their debt beats out the earning power of a high school diploma.
I get several things out of this:
- It takes a good amount of time before getting a college degree is better than not getting one (BTW, I'm sure this includes the fact that the high school grad earned four years of salary while the college grad was going to college).
- That said, on average, a college degree does beat out a high school degree. And though it takes 14 years to break even, the college grad then has 25 years or so of better earnings ahead of them after that point. Not a bad deal.
- If you take my advice and make the most of your college degree, you can maximize your income while decreasing (or eliminating) your debt and thus make your degree pay off in under 14 years (well under 14 years if you do it right.)
1. Penn State
2. Texas A&M
3. University of Illinois at Urbana-Champaign
4. Purdue University
5. Arizona State University
6. University of Michigan, Ann Arbor
7. Georgia Institute of Technology
8. University of Maryland, College Park
9. University of Florida
10. Carnegie Mellon University
Notice anything about these schools? None of them is Ivy League/prestigious (unless you want to count Carnegie Mellon). They are "good" schools but not "the best." And yet companies like to hire from these, huh? Sounds like these schools offer a good blend of affordability and performance (they get you a job.) Then again, these ratings aren't based on job-at-graduation percentages or starting incomes. Perhaps only 50% of grads from these schools get hired and the reason recruiters like them is because they can pay the grads peanuts (I'm not saying these are true, just bringing up some potential arguments.)
But we don't have to guess at the motivation, the piece tells us:
State universities have become the favorite of companies recruiting new hires because their big student populations and focus on teaching practical skills gives the companies more bang for their recruiting buck.
Under pressure to cut costs and streamline their hiring efforts, recruiting managers find it's more efficient to focus on fewer large schools and forge deeper relationships with them, according to a Wall Street Journal survey of top corporate recruiters whose companies last year hired 43,000 new graduates. Big state schools Pennsylvania State University, Texas A&M University and University of Illinois at Urbana-Champaign were the top three picks among recruiters surveyed.
Ok, so it gets down to the fact that can save money in recruiting costs. As such, I'm not sure how much this is telling us about how good of a deal these schools are or aren't. It probably isn't telling us a whole lot.
What's your two cents on these articles? Do you have anything to add?