By Mike Collins
For the last 40 years the mantra has been “if you want to get ahead, just go to college”. It is partially based on the widely published assumption that those who do get a college degree will make 84 percent more than high school graduates in their careers. But the economy has changed radically in the last 40 years, and universities have not kept up with the times.
A recent New York Times article reported how student debt will exceed credit card debt and is projected to be more than $1 trillion in 2011. Student debt was $200 billion in 2000 and has grown more than $800 billion in 10 years. This leaves many students either unable to pay off their debt (defaults) or struggling with it for most of their adult lives.
This has become a serious problem.
The second problem: If you go to college which major will give you the best chance of getting a job with a wage to support a family? It probably doesn’t matter when the student remains single, but as soon as they get married and have children; they will need higher wages and benefits. Another question to ask: When you choose a major how much money should you borrow to graduate in the major?
I have written about problems of student debt and majors many times but up until recently there was no data to connect wages to majors and to student loans until a Census study from 2009 came out with data that connected wages and majors. It was the first time the Census asked people about their undergraduate majors enabling researchers to tie in salary data.
The study is “What’s it Worth? The Economic Value of College Majors”, and analyzes 171 college majors combined into 15 fields. It describes each field in terms of a median wage, which is misleading because the data is from an age group from 18 to 64 years old. Median wages could represent wages from someone who has worked 30 years out of college.
This article focuses on young people who are in college or about to graduate and find a job. So, I will use the lower wages on the scale that the study identifies as the 25th percentile as representation of entry level wages.
In this study the majors that pay the lowest starting wages below $33,000 per year are psychology and social work, arts, education, humanities and liberal arts, communication, journalism, industrial arts, and consumer services. According to the survey, these majors are 38 percent of all majors in the study.
The three highest starting salaries for majors are engineering, computer science and mathematics, and health care. The starting wages begin at $45,000 and represent 20 percent of the bachelor’s degrees awarded. The rest of the majors (42 percent) have starting wages from $33,000 to $45,000 per year.
One of the authors of the study, Anthony Carnevalle states the obvious, “We don’t have a system in the U.S. where we align what you take with career prospects. Nobody ever tells you when you go to college what happened to the other people who took it before you.”
When students talk to their advisors about financial problems, the answer is usually to just get a student loan. This decision is about staying in school and has little to do with the starting wages of the major. If the student is in a major that has low starting wages, he or she may have to spend many years paying off the loan and struggling financially to make ends meet when they get married and start a family.