College is an investment, an incredibly expensive one, and like all investments students and parents expect to get something for their money. The general promise is that attending college, the mere act itself, guarantees a high paying job and success in life. There is some truth to that; college graduates do significantly outearn their peers without degrees on average, but averages can be deceiving.
The New York Times recently published a piece on the college majors with high payoffs; click bait in part, but also an interesting examination of a significant amount of data. In this article, we’re going to look at that same data and the New York Times’s conclusions with a more critical eye, to try and formulate the best advice for students and parents trying to decide on the right college education to invest in.
What Does the New York Times Say?
The New York Times is itself analyzing and reporting on data from the HEA Group, an organization which does statistical research into higher education. The point of their research was to compare the average earning from majors at colleges with benchmarks set out by the Department of Education. These benchmarks are meant to ensure a reasonable rate of return; that is that graduates from programs earn a reasonable amount.
The HEA Group’s findings are quite positive; almost all college programs (~98%) meet the set benchmarks; almost all majors at almost all colleges outearn their high school graduate peers. Approximately 14% of programs perform exceptionally well, outearning their high school peers by at least $50,000 annually.
This data is all in a very large excel file; what the New York Times did is make it much more easily searchable, so that you can check out the average salary for a particular major at a particular college. This is a useful tool, though there are some limitations in the data.
The largest is the limit of sample size. The data only comes from students who graduated in 2017-18 and 2018-19; this is a snapshot, not a long-term trend chart. The data also only comes from students who received financial aid form the federal government; thus the wealthiest students and international students aren’t represented in these datasets at all. In spite of this, the data is quite useful, as is the New York Times’ tool for exploring it more granularly.
What Does the Data Say About College Majors?
Some of the data is completely unsurprising. If you simply sort the universities by which schools have the top earners, institutions like Caltech, UCLA, Duke, MIT, and Harvard top the list. Indeed, all of the top ranked universities in the US do quite well in terms of the average salary of graduates.
The top earning majors list is also full of the usual suspects. Computer science, mathematics, and electrical engineering hold the top spots. Math may surprise some people, but recent trends in hiring show that firms on Wall Street prefer math majors over business or economics majors. The more quantitative the field of finance becomes, the more valuable a deep understanding of math is.
Some fields are harder to parse; any major with fewer than 15 graduates from a school is not included in order to preserve student anonymity, so less-subscribed fields like languages and area studies are harder to gauge. Other fields, like biology, may lead to high paying fields for doctors eventually, but that won’t be shown in this data because those one-day doctors are still in medical school, not yet earning.
The New York Times has also helpfully provided a full list of the majors and institutions with the highest overall average salaries. These are:
- Mathematics, Duke University: $297,029
- Computer Science, Carnegie Mellon University, $268,121
- Electrical, Electronics and Communications Engineering, Carnegie Mellon University, $250,168
- Computer and Information Science, University of Pennsylvania, $241,380
- Statistics, Harvard University, $230,867
- Computer Engineering, UCLA, $228,705
- Computer Science, MIT, $225,141
- Computer Science, Cornell University, $223,309
- Computer Science, Princeton University, $217,973
- Computer Science, Pomona College, $217,051
Again, this is merely a snapshot, but the pattern in the data is hard to miss. Going to college generally does offer students good earning, but some majors and schools do far better than good, while a few schools and majors underperform expectations. The most surprising of these are music; even top ranked music schools often have remarkably poor earnings. Several of these are even at risk of running afoul of the new Department of Education rules.
What This Data Means for College Applicants
We do want to caution against using this data to decide what you want to major in. This is employment data from only two years of graduates, and reflects a very particular market trend; computer science majors graduating in 2018-19 were entering right into the start of the AI boom, and an incredible windfall for many Silicon Valley companies.
It is impossible to predict what the financial or jobs market will look like four years from now when you are graduating college, or if you’ll be entering into a boom or bust cycle for any particular field. There are some overall trends which are more useful to consider however, and which we do think students should look at.
The first is the relative value of different colleges. Top colleges are more costly (though often not by much), and offer generally higher salaries across the board; the highest earners from top ranked colleges outearn their peers, and even in less popular or well-paid majors students who attend higher ranked colleges still have higher average salaries.
The next tier of colleges for earning tend to be the top performing state schools. They don’t always have the same prestige, but graduates from UT Austin, Michigan, UIUC, and Purdue all do quite well in terms of their earnings. They tend to be a bit more lopsided; certain programs at these schools do better than others, but they do a solid job preparing students for successful careers.
What this data doesn’t factor in, and what should be a major part of your own considerations, is the cost of attending these colleges. College is an incredibly expensive investment; this data shows that it often pays off quite nicely, but you still want to be cognizant of how much you’re investing and what you’re getting for that.
How to Make College Pay Off for You
So how should you apply all of this data to your own college applications? We recommend factoring it in most when building your college list, considering not just the price of schools, but how much attending a particular school is likely to benefit you. Here’s some key tips for doing so.
Always Consider Top Schools
Not every student is qualified for, or wants to attend, Harvard. That said, if you have the kind of application profile that makes you a legitimate contender for top universities, then you should consider applying to them. Colleges claim they aren’t job training centers, but top rated schools are consistently the best at this thing they claim not to do.
Top universities often also have the most generous need-based aid, so even middle class and upper middle class students can get a better deal on college tuition at these schools than at other institutions. This makes them even better as an investment, since you will be paying less and likely earning more.
Public Colleges Offer Good Returns for In-State Students
Public colleges may not top the list of top earning alumni, but many of them aren’t that far behind the top private universities in how much their students earn. More appealingly, many of them have far lower tuition costs for in-state students. While they tend to have less generous financial aid, the overall cost for many students is low, and acceptance rates are more forgiving than top private schools.
For out of state colleges, however, the tradeoff is often far worse. Out of state public colleges often charge nearly as much as private universities, acceptance rates for students are lower, and there is far less financial aid available. In certain cases, this can still be a good idea, but this should be evaluated on a case-by-case basis.
Lower Ranked Private Universities
There are many private universities which are lower ranked. These are still good schools, and you will get a good education from them, but they often have worse financial aid. The pay rates for alumni at these schools are somewhat lower on average than top schools, but not by much, and getting a degree from them will still lead to good career outcomes for most students.
Instead, what you need to be aware of for these schools is how much you’re paying. These schools often have high tuitions and far less financial aid available, as they do not have the large endowments many top universities enjoy. These can be fine schools to have on your list, but you should consider cost when deciding where to attend.
Choice of Major
Almost across the board, students who attend college outearn their peers who don’t. Your choice of major does matter, but we caution you against choosing a major based solely on this data. Many students don’t end up working in the field they major in, and many different major paths can lead to gainful and enjoyable employment. Your choice of major should reflect your profile, in order to maximize your chances of admission to these schools.
Final Thoughts
Students and parents are rightfully concerned about the rising costs of college tuition, and want to be sure that they pick a college to attend that will be a good investment, and set them up for the future. The article by the New York Times provides some helpful data, but that data only tells part of the story. We hope that this article has helped you understand some of the nuances of choosing a college, and how the right choice can help set you up for success in the future.
If you’re looking for advice building your college list, or finding the best schools to prepare you for the future, Ivy Scholars can help. Our mentors specialize in helping students find schools that will support them, and in guiding you through the overly complex application process. Schedule a free consultation today to learn more, we’re always happy to hear from you.
