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Low-Income College Students Earn Less After Graduation

PayScale’s College ROI Report ranks the return on investment for a college education at hundreds of four-year schools. The data makes it clear that choice of major and school have a big effect on earnings after graduation. Unfortunately, PayScale’s research also highlights another factor that affects post-grad earnings: household income when students enter college. In short, the less students have when they enter college, the less they’re likely to earn after graduation.
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At the College ROI Report, Sean Leslie writes:

Our survey showed the mid-career median pay for respondents whose household income was in the bottom 25 percent of the income distribution (again, self-reported) when they attended college is $72,700. The mid-career median pay increases to $80,100 for respondents whose household was in the middle 50 percent of the income distribution. And respondents whose household income was in the top 25 percent have the highest mid-career earning potential post-graduation, with a median pay of $99,600. This pattern holds true across job levels.

Why Does Household Income Affect Future Earnings?

It’s impossible to say, based on this data, exactly why students from lower-income households earn less when they embark on their post-graduation careers. But there are a few obvious possibilities.

“What [researchers] are finding is that low-income students don’t experience college the same way as their affluent peers,” says Aaron French, creator of “Education on Tap,” in a podcast  at The Washington Post. “The networking, the job access, they just can’t be college kids. No time for fraternities or sororities, no intramural lacrosse teams, and forget about the a cappella group. Kids from low-income backgrounds are just trying to hang on and hang in.”

Do You Know What You're Worth?

Time is money, and low-income students have less of both. They might miss out on unpaid internships, for example, because they’re forced to take paying jobs that yield fewer connections. And, as French says, less time for extracurriculars means less time to build the network that comes with playing sports or participating in Greek life.

Experts say that up to 85 percent of jobs are found through networking. Without time to build their network, lower-income students might miss out on higher-paying jobs after graduation.

For more information, check out PayScale’s College ROI Report.

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Tell Us What You Think

Do you see a connection between your household income when you entered college and your earnings after graduation? We want to hear from you. Tell us your story in the comments or join the conversation on Twitter.

Jen Hubley Luckwaldt
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