A major preoccupation of college students today, whether they are pursuing a bachelor's degree or aiming for medical school or any academic program in between, comes down to this question:
What kind of income can I make after I get my degree?
This is a critical question, but overall statistics can be very misleading. For example, the US Bureau of Labor Statistics estimates that individuals who graduate with a bachelor's degree earn 68% more than Americans with a high school diploma.
Remarkable salary ranges, however, exist even among individuals performing the same discipline. Here is an example:
Undergraduate business majors who graduate from the University of Virginia enjoy an estimated return on investment over their careers that exceeds $3 million. In contrast, 13% of individuals with undergraduate business degrees end up with a negative ROI.
The value of a college degree over a working life will vary greatly, not only from school to school, but also within disciplines.
This phenomenon is helpfully illustrated by a new resource you and your clients can use that estimates the lifetime ROI of more than 40,000 college degree, sub-degree credentials at schools across the country and over 10,000 programs for master's and doctoral programs, as well as medicine. , dental and law schools.
of Equal Opportunity Research Foundation, a nonprofit think tank, produced the ROI figures using new data from the US Department of Education's College Scorecard as well as the US Census' American Community Survey. You can learn more about methodology here.
Report Highlights
Here are some of the key findings:
- The average ROI for graduates with a bachelor's degree is $160,000.
- Bachelor's degrees in engineering, computer science, nursing, and economics tend to produce ROIs of $500,000 or more. In contrast, fields such as education, psychology and English have much less or no ROI.
- The ROI for certificates in technical trades such as automotive maintenance and repair, precision metalwork, and HVAC technology has an average ROI of $313,000, which is significantly higher than the typical bachelor's degree.
- Associate degrees and certificate programs in the liberal arts have no ROI.
The report offers a cautionary tale for individuals who feel they need to earn a master's degree to increase their wages and career options. According to the Bureau of Labor Statistics, workers with a master's degree earn 16% more than those with only a bachelor's degree.
However, the report concluded that nearly half of master's programs leave graduates financially worse off. The report explains that this is due to the high cost of degrees and often modest salary increases.
Using the ROI tool
IN FREOPP.org website, you can search for the ROI of individual programs offered by private and state colleges and universities using the following filters:
- Academic direction
- Name of the specific institution
- Type of institution
- State
- Degree type
Here is link to search for associate and undergraduate certificate and degree programs.
Here is link to search for graduate and professional degrees.
Playing with the database can generate surprising results and reveal institutions that families might normally overlook.
This happened, for example, when I searched for ROI figures for public universities that offer master's degrees in accounting. Top schools probably wouldn't be on many people's bingo card. The institution with the best ROI ($500,544) was Northeastern State University in Oklahoma, followed by Old Dominion University in Virginia ($489,054) and Binghamton University in New York ($460,889).
When looking for private schools in the same category, New York University was the winner with an ROI of $629,604, but among the private institutions in the ROI top 10 were Ithaca College in New York, University of Miami in Florida, University of St. Thomas in Florida and the University of Scranton in Pennsylvania.
Just as important as identifying schools that produce graduates with enviable earning potential is identifying institutions that fail their graduates.
A search for the schools with the best and worst ROIs for undergraduate degrees in psychology illustrates this. Psychology, which is one of the most popular majors, has one of the lowest ROIs among undergraduate majors. However, there are some schools, including elite East Coast institutions that perform spectacularly.
Trinity College, a liberal arts college in Connecticut, takes top honors with an ROI of $1,474,678. Other schools in the top 10 include Duke University, Colgate University, Hamilton College, Yale University and the University of Notre Dame.
In the contract, ROI finalists for undergraduate psychology degrees include other expensive coastal institutions, including The New School (negative ROI $643,722), Scripps College (negative ROI $379,880), and Bates College (negative ROI $257,831) .
Last line:
The ROI of an academic program overall and at individual institutions does not mean that an individual cannot do better or worse financially. However, I would argue that it is important to look at ROI figures before committing to a degree program and putting down a deposit at any college or university.
Lynn O'Shaughnessy, a nationally recognized expert, offers an online course – Savvy College Planning – exclusively for financial advisors. Click here to get Lynn's guide, Finding the Most Generous Colleges.