Matching College Costs and Salaries

Payscale lists the median starting and mid-career salaries for a variety of different college-related attributes including:

• Colleges

• Degrees

• School location

I like the fact that more and more of this sort of information is being published. Why? Because it starts to get at the value of a specific degree at a specific college. As this information becomes more widespread and detailed, parents and students can then match it against expected costs and decide which college is the best "deal." For instance, which is a better deal:

College A

• Costs $100,000 to attend over four years
• Requires the student to borrow $50,000 to pay all the costs
• Delivers an average career salary of $75,000 per year.

College B

• Costs $150,000 to attend over four years
• Requires the student to borrow $100,000 to pay all the costs
• Delivers an average career salary of $85,000 per year.

College C

• Costs $50,000 to attend over four years
• Requires the student to borrow $0 to pay all the costs
• Delivers an average career salary of $50,000 per year.

It's not easily clear which is the best deal (and actually the answer may differ depending on the goals of the student), but at least with this basic information a student/parent can run the numbers and determine which one offers the best option given the student's unique needs. It allows everyone concerned to work towards matching college costs with expected incomes, a key part to making a successful college choice from a financial standpoint.

And while the examples above all could likely be a "good" deal, here's an example of when a college isn't a really great option:

College D

• Costs $150,000 to attend over four years
• Requires the student to borrow $100,000 to pay all the costs
• Delivers an average career salary of $30,000 per year.

Don't think this happens? It sure does!

Comments

[[email protected] Pilgrim]

Right. This is the issue...and the only issue. College is just an investment with a cost and a return. You know who is trying to cloud this picture? Right again....the super expensive liberal arts schools that turn out grads who (mostly) earn that $30k you are talking about.

Sometimes a cigar is a cigar and when it comes to college costs, it's really simple. Thanks for keeping this issue clear.

[tm]

The other thing I wonder about is if colleges that are in high cost of living areas report higher salaries because that is what is necessary to live, assuming grads get jobs in the city where school is. Of course going to a school in a small town presumably would require you to get a job other than in that small town but perhaps not in a big metropolis. I'm thinking of a school in Boston vs a school like Bucknell which is in the middle of rural PA.

[ethel]

@Neal: "the super expensive liberal arts schools that turn out grads who (mostly) earn that $30k you are talking about"

I'd love to see the statistic that show that "most" graduates of "super expensive liberal arts colleges" earn $30K, Neal. But I have a feeling you are asserting what you want to believe is true, but is in fact not true.

The above Example D does not come from a "super expensive" liberal arts college, and the woman in this example failed 2/3 of her classes. For her to spend *any* money on college would have been too much. She also neglected to turn in her FAFSA four years in a row so didn't take advantage of low interest rate loans. She is *far* from a typical case, and the numbers back that up. It is quite simply a media myth that there are lots of people making $30K/yr after coming out of a "super expensive" liberal arts college. The vast majority of their graduates go on to professional programs, including med school, law school, and business school, and do quite well. That might be attributable to the networking and cache that they buy, rather than their smarts. But it is simply not true that "most" of Middlebury's graduates make $30/yr into their 30s.

These are simply hypothetical and/or extreme cases. Let's move away from anecdotes or "what ifs" and talk about the statistics and comprehensive data. That is what matters in an economic analysis.

[FMF]

Saw this piece this morning:

http://www.usnews.com/articles/business/paying-for-college/2009/08/12/is-student-debt-really-a-problem.html

[Jordan]

I think major has more to do with it than which school you attend. If you're going to get a professional degree, all the more reason to attend a more affordable undergraduate program. Obviously you want to go to a good enough school so you can get into the prestigious graduate schools (where average salary really matters), but almost all states have a more affordable option.

[Jim]

I agree with Jordan that the major is the most important factor. Which will generally pay more: electrical engineering at northern arizona university or social science at swarthmore? I think the safer bet is on the engineering degree.

The Payscale data should be taken with a grain of salt. The salary figures for colleges use only people with bachelor degrees which will skew it oddly. Plus there are going to be geographical influences on the salaries too. Schools in rural areas will tend to have grads with lower pay versus schools in expensive urban areas. Thats a reflection of the region cost of living rather than the quality of the university.

[Welath Pilgrim]

Ethel,

I have to agree with you. Serves me right for writing a comment at 2 am.....

However, I do agree w/Jordan. Earning power has much more to do with major than the school itself - at least that is my experience. But if anyone has other stats, I'd be very interested.

Ethel, have you seen any stats on this issue?

[James]

Option D is me... except it's 35k not 30k. I'm hoping to have it paid off within the next 5-10 years, but it's a real pain in the @$$. Oh well, I'm still going to school to finish off my PhD. Right now I have my masters, taking a year off and then I'll start for my PhD. I'm a lab supervisor 1 at a school since no of my other job applications accepted me. Not much of a demand for a good physics MS degree I suppose.