There is more to choosing a college than mascots and majors. Your school choice today can impact your earnings tomorrow. Read on to learn about the most important factors that should influence your choice and how to find the information you need to make the best decision for your future.
(Photo credit: 401(K)2013/flickr)
Holding Schools Accountable
In a recent speech to an audience at SUNY Buffalo, President Obama discussed a new government rating system for colleges that will judge schools on both affordability and performance. In addition to holding schools accountable for their costs and their returns, he plans to tie federal financial aid into this new rating system.
The skyrocketing costs of education, in conjunction with the ballooning student debt, have forced the president’s hand. As he stated, “Higher education cannot be a luxury, it’s an economic imperative. Every American family should be able to get it.”
By acting now to implement a new rating system, schools should no longer be able to prey upon the wallets of unsuspecting American citizens. Instead, this new rating system will help the administration understand which schools are best supporting their students and preparing them for a successful career. As we have seen in our own research on the return on investment in a college degree, a large number of schools cost more in tuition and foregone wages than they provide in post-graduate earnings. These are examples of schools that are more likely to lose federal support to some degree.
So what measures are currently being considered for this new rating system? They are average tuition, average student loan debt, graduation rates, and the average earnings of graduates.
Post-Graduation Earning Potential
Lucky for those wanting to hold schools accountable, we have a handle on that last one right now in our recently released College Salary Report, which provide the median starting pay and median mid-career pay for the alumni of more than 1000 schools. The range of potential earnings is quite broad. Harvey Mudd College dominates the mid-career earnings at $143,000, which is more than $100,000 above the bottom school on the list, Shaw University with median mid-career earnings of $41,900.
What accounts for this difference? One important fact is that the majority of Harvey Mudd alumni major in lucrative engineering and computer science fields – in demand fields that offer high pay, whereas the majority of Shaw University graduates major in less lucrative fields like social work, criminal justice and business. (Yes, business is not generally a top earning major; #60 on our list of 129 majors).
Therefore, new for 2013, we rank a subset of schools by major, including biological sciences, English, social sciences, and art and design. These rankings hone in on whether your education choices (both the school and program) are a win for your wallet. In other words, if you are going to school for engineering, are potential earnings higher at UC Berkeley or MIT?
However, overall earnings by school are still important for holding schools accountable as tuition is not currently pegged to program of study. Therefore, whether you are an engineering major or an elementary education major, you need to pay the same tuition.
The Bottom Line
Even before Obama’s proclamation of a new ratings system, his administration has worked to bring us the College Score Card, which reports typical costs, graduation rates, loan default rates and median borrowing. The employment section is still waiting for data, but you don’t have to. The data we make available both in the College Salary Report and also on our research center, which utilizes a subset of our data, puts this information at your fingertips.
Although schools should be held accountable for how they treat their students in terms of aid, graduation and future earnings, future college students would be remiss if they didn’t take a moment to understand the information that is already available. When making educational choices, one should research all aspects of a school and what it might mean for their future.
Tell Us What You Think
Should tuition be tied to future potential earnings? Leave a comment or join the discussion on Twitter.