I've talked a lot about matching the cost of college with the expected benefit to make sure you're making a good financial investment. Now Yahoo chips in with the same line of thinking in listing five degrees that have great returns on investment. Their list:
1. Master of Business Administration (MBA) - In ROI terms, Business Week's top-ranked MBA program offers an estimated $96,500 post-MBA salary increase and pays for itself in a little over a year and a half. Most MBA students boost their ROI even further by keeping their day job.
2. Bachelor's Degree in Engineering - Engineers top the U.S. Bureau of Labor Statistics' (BLS) list of bachelor degrees with the highest earning power.
3. Associate's or Bachelor's Degree in Nursing- From an ROI standpoint, one of the most promising developments is loan forgiveness programs. The U.S. Department of Health and Human Services offers a Nursing Education Loan Repayment Program (NELRP), which covers 60 percent of educational costs in return for two years employment at a "critical shortage" facility. Meanwhile, the median nursing salary of $62,480, as reported by the BLS, makes it easy to erase the two-year associate's or four-year bachelor's degree tuition from your balance sheet.
4. Bachelor's Degree in Accounting - Accountants experienced a median salary of $63,180 in 2007. CPAs earn considerable more; a 2007 survey found an average salary of $91,608, which represents a 9 percent increase over '06. While the rest of the economy faces pay cuts and layoffs, accountants can expect "an overall salary increase of 3.4 percent in 2009," reports Robert Half International.
5. Associate's Degree in Computer Science - Computer support specialists earned $45,300 in 2007; a step higher up the career ladder, network and computer systems administrators brought home $67,850.
They also give an overall endorsement of college degrees as follows:
Whether or not you choose these high-performing degree paths, your decision to get a college degree will pay deep dividends for years to come. According to the U.S. Department of Education's Education Resources Information Center (ERIC), college degrees of all stripes offer double-digit increases in earning power. An associate's degree delivers a 25 percent increase in expected lifetime earnings. And a bachelor's degree offers a stunning 88 percent salary advantage over a high school diploma. With the bottom line at the forefront of everyone's priorities, these dramatic returns are bound to speak louder than ever.
My thoughts:
1. I agree that getting a college degree is almost always a smart financial move.
2. My MBA was certainly a great investment. Nice to see they are still delivering value a couple decades later.
3. The key to making the most off of any degree is keeping college costs as low as possible while maximizing expected salary levels after graduation. Fortunately, there are many ideas you can use to save on college expenses.
4. Even if you enter a very high-paying field, it's still usually a good idea to minimize the amount of money you need to borrow to finance your education. Sure, maybe you'll make $100k a year, but if you have $100k in debt as well, it's going to take a long time to pay it off.
I have a friend who has two Masters, both from overseas; along with a bachelors from a prestgies Ivy School. She makes the same amount that I do; doing the same job. Difference? My one Masters and B.S. cost me a lot less then what her 85K in school debt will cost her. Sometimes, it's just not worth it, depending on what field you enter. The Government pays the same to all it's foot soldiers in the end. :)
Posted by: Andrew G. | February 10, 2009 at 01:41 PM
I went for civil engineering because I knew I could get a job making good money and I didn't have the math skills for some of the harder engineering degrees :) Civil is regarded as the lowest paid engineering field and it may be, but I still am making $100k a year with 10 years experience. New grads in LA are getting around $60k to start, it's a pretty good deal.
Posted by: Miss M @ M is for Money | February 10, 2009 at 02:06 PM
Engineering's been good for me; went with Chemical since it was highest paying degree in the late 90s. What I found out later (pleasant surprise) was that the degree mattered more than the school since I was working alongside Harvard and Princeton grads getting the same ratings or higher, while I went to a state school. So, my ROI's been great. A few other findings after a decade in industry:
a) Best to branch out of your initial discipline for both job security and salary. I subsequently did an MBA and got out of biotech manufacturing and into more strategic business roles. If I fell on hard times, I could always return to manufacturing, but if I had been in manufacturing the whole time, and outsourcing took over, there was nothing to fall back on.
b) If salary is really important to you, a very very easy way of drastically increasing your salary every few years is to simply jump jobs for salary increase opportunities. I haven't done so, but have seen many of my peers making 20-40% bumps multiple times in their careers to the point they're probably making close to double what I do. I've chosen to stay put for my own reasons.
Other good degrees in my mind include Pharmacy - some start at 6 figures right out of school...and remember that a degree doesn't always pay off (we all know that guy with the $120K in college debt due to a Harvard History major that's working at Starbucks now). Military's a good option right out of high school. Decent signon bonuses and great incoming considering most of your expenses are paid for. Training there can set you up for a great career later. I just read that enrollment is increasing big time with the ecomony in a shambles.
Posted by: Everyday Finance | February 10, 2009 at 05:56 PM
$96k post-MBA salary bump? According to ... BusinessWeek?! LMAO!
The rest of their data looks more realistic (e.g. $40k extra for Harvard grads).
In most cases, an MBA is a big investment, which you'll want to earn back soon, which limits your career options post-graduation. I graduated from college 2y ago, but my MBA enthusiasm has cooled, as I realize it makes only financial sense if you choose a typical MBA career. For now, I'm not sure I want that.
Posted by: F | February 10, 2009 at 06:08 PM
Add-on to my previous post:
like the previous poster I studied engineering (electronics) and ventured into a strategic role in Banking. However I'm feeling more and more attracted to start-ups (instead of the corporate bureaucracy). Not exactly the careers that will care about an MBA, let alone pay it back.
Posted by: F | February 10, 2009 at 06:18 PM
Computer Science has been good to me, but I have Master's. I wonder why they suggested only an Associate's degree - why stop there? Surely in current economic climate they'd have to compete with those who have at least a BS and are likely to lose. Besides, with graduate assistantships in CS easily available in most universities, a BS with good grades can allow one to get an MS for free.
Posted by: kitty | February 10, 2009 at 10:50 PM
This country needs to focus less on fancy colleges and more on trade schools, particularly at the High School level. Not everybody is going to go to an Ivy school, and most shouldn't. However we need to be more open to the idea of teaching our kids skills they'll actually use in life. I'd much rather know how to do my plumbing than some freakin discrete mathmatics. My toilet runs every now and then, but I can't a time I needed to engage in a conversation about the Ergodic theorem.
Posted by: thomas | February 11, 2009 at 02:10 AM
I'm going for an MBA. I -should- get it debt free, so it would be a horrible mistake not to get it. For now, I'm majoring in business and economics.
Posted by: Shaun Connell | February 11, 2009 at 04:22 PM
Engineering provided a long, happy, and rewarding career for me, but it isn't for everyone.
Unless you are a methodical, meticulous, logical, persistent and nitpicking type of person you aren't going to either be good at it, or what's even more important, you won't like it.
Electrical engineering requires the greatest Math skills.
Civil engineering often has great benefits because you can work for a government agency offering nice pensions and job security.
You will also eventually need an MS degree if you want promotions and job security, for a managerial career the MBA is a good second degree to have.
If you want to do research then a PhD is almost essential these days.
I have Bachelor degrees in mechanical and aeronautical engineering and a Masters in Engineering Mechanics but the vast majority of the analysis that I was involved in was solving problems that are linear. If you are more interested in nonlinear problems the mathematical requirements are a lot higher.
As an aside, I can't imagine two engineers getting married, for a peaceful life it's better to have one from the arts and the other from the sciences to provide balance.
Posted by: Old Limey | June 24, 2010 at 02:14 PM